A presidential spokesperson on Sunday gave a possible reason why the immediate past chairman of the Federal Inland Revenue Service (FIRS), Tunde Fowler’s tenure was not renewed.
Garba Shehu said the revenue challenge the government is facing, which has led it to borrow to meet government’s challenges, may have spurred the Buhari government to effect changes in key revenue generating agencies, especially the FIRS.
Mr Shehu said this in an interview with journalists in Abuja as reported by The Cable on Monday.
Mr Fowler, who had served as the first Lagos State Internal Revenue Service chairman for eight years, irked President Buhari, who queried him over insufficient tax collection since 2015, a prelude to him relieving him of his job weeks later.
Mr Buhari also vowed to take action on underperforming revenue agencies.
“Our revenue-generating and reporting agencies will come under much greater scrutiny, going forward, as the new performance management framework will reward exceptional revenue performance, while severe consequences will attend failures to achieve agreed revenue targets,” Mr Buhari had said.
PREMIUM TIMES reported how Buhari on December 9 replaced Mr Fowler hours after the former FIRS boss’ tenure expired.
It later emerged that Mr Fowler actively lobbied for a second shot at the plum job.
Mr Shehu said the low revenue “had left the government no choice but to borrow to carry out essential projects.”
“So, if you ask me, from my own understanding, the problem we have in this country is the revenue issue,” he said.
“We have a revenue problem because we are unable to generate as much money as it is needed to do more capital infrastructure and also service debt. Because of the low revenue earnings, people look at the size of our debt repayment and they scream.
“The government is doing something about this and I’m happy you have seen the change that has happened in FIRS, give them a chance, let’s see how they would perform.
“Government is optimistic that things will look upward and the revenue will improve. And once there is an inflow that is sufficient to do a lot of these things, we may not even need to borrow.”
He also said the government was left with no other option but to borrow, a move he also defended.
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“It is not a scandal to borrow, the bad thing about borrowing is when you deployed it to your pocket. This has happened in the past in this country, President Buhari is borrowing to do railway, to do East-West expressway, to do second Niger bridge, to do Mambilla power, to do Abuja-Kano expressway, to do Ajaokuta-Abuja gas pipeline.
“These are projects that are beneficial to the economy, these are basic infrastructure projects – railway, power – without which this country cannot achieve development.”
Mr Fowler’s removal has generated controversies especially after President Buhari also removed the chairman of the Asset Management Corporation of Nigeria (AMCON), Muiz Banire.
Some political analysts have tagged the move a deliberate attempt to curb the influence of the South-west region politically.
Leakages in FIRS?
Since 2015, the FIRS under its former chairman, Mr Fowler, has not been able to meet collection targets, a different trend from the preceding years.
In 2015, FIRS set N4.7 trillion target but was only able to make N3.7 trillion in the actual collection.
In 2016, 2017 and 2018, the targets were N4.2 trillion, N4.8 trillion and N6.7 trillion but the actual collections were N3.3 trillion, N4 trillion and N5.3 trillion, respectively.
PREMIUM TIMES on Sunday published a 2017 audit report prepared the Auditor-General of the Federation (AuGF), indicating that the revenue agency failed to collect taxes worth about N41 billion in Lagos State.
In August, the presidency, in a letter signed by Mr Kyari, queried Mr Fowler over worsening tax collection since 2015.
“We have observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018,” read Mr Kyari’s letter stamp-dated August 8, 2019.
In his response to the presidency, Mr Fowler had said FIRS under him performed better regarding specific non-oil tax types, such as VAT and CIT.
He explained that the general lower collection since 2015 is as a result of the falling prices in the oil market.