The senate on Wednesday approved an upward review of the revenue target for the Federal Inland Revenue Service (FIRS) from N5.076 trillion in 2020 to N7.61 trillion in 2021.
The upper chamber gave the approval following the presentation of a report by Solomon Adeola, chairman of the senate committee on finance.
Adeola said the 2021 revenue target represents a 49.9 percent increase compared to the previous year’s revenue target.
Out of N5.076 trillion, the service generated N4.9 trillion in 2020 despite the nationwide lockdown occasioned by the COVID-19 pandemic.
The lawmaker explained that out of the proposed total collection of N7.61 trillion in 2021, N5.645 trillion is expected from non-oil components, while N1.964 trillion is expected from oil components.
The senate also approved a total expenditure of N216.6 billion for the service for the 2021 fiscal year.
He said N107.52 billion out of the N216.6 billion would be spent on personnel cost, N47.22 billion on overhead cost and N61.9 billion on capital cost, as against N97.36 billion, N43.64 billion and N27.80 billion budgeted for the three expenditure heads in 2020, respectively.
Adeola also said the cost of collection was set at four percent of non-oil revenue.
“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 noted that the FIRS would not recruit new employees in 2021.
Adeola emphasised the need to intensify taxpayers’ education and engagement with a view to improving compliance with tax laws.
According to him, the exemption of some categories of taxpayers from payment of tax as enshrined in the 2019 and 2020 Finance Act would impact revenue collection.