• Abba Kyari, Chief of Staff to the President, requested the FIRS Chairman to explain significant variances in targets and actual collections. 
  • Business Insider SSA's analysis of the agency's 4-year revenue collections showed that it has experienced a revenue shortfall.

The Nigerian government has queried Chairman of the Federal Inland Revenue Service, Babatunde Fowler, over dwindling tax revenue since the inception of the current government in 2015.

In a letter circulating on social media, Abba Kyari, Chief of Staff to the President, requested the tax agency to account for significant variances in the budgeted collections and actual collections by the agency.

We observed significant variances between the budgeted collections and actual collections for the analysis explaining the reasons for the variances between budgeted and actual collections for each main tax item for each of the years 2015 to 2018.

“Furthermore, we observed that the actual collections for the period 2015 to 2017 were significantly worse than what was collected between 2012 and 2014. Accordingly, you are kindly to explain the reasons for the poor collections,” the letter reads.

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Tax collection shortfalls

Despite hitting its highest revenue collection in 2018, the FIRS has witnessed tax revenue shortfalls since the inception of President Muhammadu Buhari-led government.

Business Insider SSA's analysis of the agency's 4-year revenue collections under President Buhari showed that it has been experiencing a shortfall of N1 to N2 trillion every year.

In 2015, the agency set N6.75 trillion and made about N5.32 trillion.

FIRS tax collection records
FIRS tax collection records

The agency projected N8 trillion collections for 2019. 

Nigeria is facing a huge fiscal challenge to meet up with infrastructural decay and rising debt level. To reduce its debt burden, the IMF has also advised it to increase its revenue sources.