The Senate has approved N216,646,579,231bn as expenditure for the Federal Inland Revenue Service for the 2021 fiscal year.
This was just as the upper chamber gave its approval for the service to review upward, its revenue target from N5.076 tn proposed for the year 2020 to N7.61 tn in 2021.
The approval came, following the consideration of a report by the Senate Committee on Finance.
Chairman of the Committee, Senator Solomon Adeola in his presentation on Wednesday, said the FIRS proposed a total revenue collection of N7.61trn for 2021 as against N5.076 trn budgeted in 2020, a figure which represents about 49.90 per cent increase above the corresponding year’s budget.
According to the lawmaker, out of the proposed total collection of N7.61 trn, N5.645 trn is expected from non-oil components, while N1.964 trn is expected from oil components.
He added that, the cost of collection from 4 per cent net of 2 per cent NCS Value Added Tax was projected at N216.65 bn to fund Personnel, Overhead and Capital costs in 2021, as against the sum of N180.76 bn budgeted for in 2020.
Out of the proposed expenditure of N216.65 bn for the 2021 fiscal year, Adeola said the sum of N107.52 bn is for Personnel Cost; N47.22 bn for Overhead Cost; and N61.9 bn for Capital Cost, as against N97.36bn, N43.64 bn and N27.80 bn budgeted for the three expenditure heads in 2020, respectively.
Adeola noted that the Cost of Collection to the Service was pegged at four per cent of Nnon-oil revenue.
He, added that, “there will be marginal reduction in the taxable income of tax payers due to the effect of COVID-19 pandemic.”
He said, “The Service seeks to continuously improve its technology for automated tax collection across all sectors of the economy through e-filing, e-registration, e-payment etc to facilitate ease of doing business with tax payers.”
He emphasized that there would be no recruitment into the Federal Inland Revenue Service in the year 2021.
The lawmaker who underscored the need to intensify tax payers education and engagement with a view to improving compliance with tax laws, noted that the exemption of some categories of tax payers from payment of tax as enshrined in the 2019 and 2020 Finance Act would impact on revenue collection.