18% Tax-To-GDP Achievable Says FIRS
By Patience Ikpeme
The Federal Inland Revenue Service (FIRS) is optimistic about achieving an 18% tax-to-GDP ratio by 2026, leveraging technology, streamlined processes, and enhanced capacity building to boost tax compliance.
This was stated by Dr. Zacch Adedeji, the Executive Chairman of FIRS, during a workshop with the theme ‘Enhancing Tax Compliance And Revenue Generation’ ,for Accountant-Generals and Finance Directors , on Thursday in Abuja
He emphasized the importance of collaboration among government agents to increase revenue without raising tax rates, focusing instead on closing loopholes and simplifying tax remittance processes.
Adedeji noted that “these advancements have not only enhanced tax compliance, but have also positioned us to meet our target of 18% tax to GDP ratio by 2026.”
He further explained that the government on their part has also reduced withholding tax rates to alleviate burdens on businesses while promoting compliance and expanding the tax base.
Nonetheless, this doesn’t automatically imply raising tax rates. Rather, our emphasis should be on preventing revenue loss and ensuring complete adherence to current tax regulations.
Additionally, the government has taken steps to streamline the tax payment process, notably through a centralized system where Accountant Generals manage payments for various government agencies.
This he stated, has played a crucial role in facilitating the prompt payment of taxes like VAT, WHT, and Stamp Duties. We have also lowered the WHT rates to prioritize taxing profits instead of revenue, which is intended to alleviate the financial strain on businesses and individuals.
The Accountant General of the Federation Mrs Oluwatoyin Madein lauded the FIRS for organising such a workshop at a time when Tax administrators and stakeholders can share experiences and exchange ideas and provide working solutions.
She laid emphasis on the contributions of state governments to national revenue, describing it as been very vital, and it is the clarity that will empower our stakeholders, particularly the state accountant generals two effective strategies and best practices in tax remittance and reporting.
Mrs Oluwatoyin Madein urged Tax administrators and stakeholders to continue to collaborate, innovate, and support each other as we strive to ensure the long-term fiscal sustainability of our nation.
