The Chairman of the Federal Inland Revenue Service, Babatunde Fowler, has said that 70 per cent of the revenue shared by the Federal Accounts Allocation Committee for June 2016 was from non-oil receipts.
Fowler spoke when he paid a courtesy call on the Ogun State Governor, Ibikunle Amosun, on Monday.
Last week Thursday, the Minister of Finance, Kemi Adeosun, had after the FAAC meeting told newsmen that the Federal States and Local Government Areas would be sharing a revenue of N559.03 billion.
This meant the gross revenue generated by the federation increased by N301.32 billion, the highest in almost two years.
Adeosun attributed the increase in revenue to efficiency in collection by the revenue generating agencies, especially the Federal Inland Revenue Service.
Fowler, who was in Abeokuta, the Ogun State capital, for the 135th meeting of the Joint Tax Board, told Amosun: “Of the sum, 70 per cent came from non-oil sources, while only 30 per cent came from oil sources.
“It was the first time in 2016 that the Federal Government shared over N500 billion among the three tiers of government during the Federal Accounts and Allocation Committee meeting.
“We are proud of the development and we tell ourselves that this is the time to fund the budget of the Federal Government from non-oil sources.”
Fowler equally praised “the excellent performance” recorded by the Ogun State government in its Internal Revenue drive.
He revealed that the state came first in 2015 as it grew its internal revenue base by 50 per cent.
Amosun canvassed a review of the sharing formula of revenues accruing to the federation account through non-oil taxes, including Value Added Tax.
He said: “The non-oil revenue sharing formula currently in use is obsolete.
“As at the time it was done 20 years ago, Ogun State, for instance, was way back because of the number of industries we had then.
“Today, Ogun State is the industrial capital of Nigeria.
“The sharing formula should reflect this new reality.
“This is derivation in another form.
“It is a good thing that for the first time in the life of this administration, non-oil receipt accounted for over 70 percent of the fund shared at the last FAAC.
“It is a commendable and a welcome development because it signifies a major shift in focus from oil to non-oil revenue.
“But in the same token, I think it is very expedient to ask that we cast a second look at the formula we use in sharing the proceed from these non-oil revenue.
“If we make a lot of money from industries, we should also remember that these companies reside in a state and they put enormous pressure on the environment and the roads in those states.
“Those various state governments carry the can and pick the bill for cleaning the environment.
“It is therefore only good for the management of Revenue Mobilisation and Fiscal Allocation Commission to give more back to those states hosting these companies.”
The Ogun State governor also seized the opportunity to challenge the management of the Joint Tax Board, which includes the chairmen of the 36 states Internal Revenue Services, representatives of the RMFAC, the Nigerian Customs Service and the Immigration Service to “device creative strategies” for ensuring that more wealthy Nigerians are brought into the national tax bracket.
He said: “The rich and wealthy don’t pay taxes and even when they do, they underpay.
“They make a lot of money but don’t pay anything or don’t pay the requisite tax.
“We all go to other advanced nations and see that these wealthy people don’t escape the way they do here.
“So the challenge for the JTB is to correct this.
“You must think out of the box to achieve this.”
The Ogun State governor later attended the opening ceremony of the 135th Meeting of the Joint Tax Board where he enjoined the management to increase their non-oil revenue drive.
Speaking at the opening ceremony, Fowler explained that the meeting was to ensure uniformity of taxation and compare notes in tax administration across the various states of the federation.
He lamented that the 33 states of the federation currently rely on federal allocation to fund their budget, saying the goal of the meeting was also to bring other states to a level where they are able to generate at least 50 percent of their budget internally.
The JTB boss noted that only 10 per cent of taxable adults are currently being taxed in Nigeria.
Fowler however revealed that the JTB targets 10 million new taxpayers before the end of 2016.
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