Cash strapped Buhari administration is considering the introduction of road tax that would target those operating in the informal sector of the economy.
Muhammad Nami, Executive Chairman of the Federal Inland Revenue Service (FIRS), disclosed this on Thursday in his office when receiving members of the Nigerian Union of Journalists (NUJ) led by Chris Isiguzo, the national president.
In a statement signed by Johannes Wojuola, media aide to the FIRS chairman, the informal sector has business activities that operate outside of government regulation and are largely unregistered. They include commercial bus drivers, artisans such as dressmakers, hairdressers, vulcanisers etc., mainly those in the low socio-economic strata, with low skills and poor education.
The proposed road infrastructure tax will provide the government with adequate funding for road construction, rehabilitation, and maintenance.
The statement added that the scheme would also provide the needed security for roads in the country.
“The only way to make the informal sector contribute to building a modern society is by making them pay when they use the roads,” Nami said.
“That is why we are proposing that government should consider introducing Road Infrastructure Tax in Nigeria.
“In many jurisdictions, road users pay for the use of road infrastructure as such it shouldn’t be seen as an additional burden on our citizens because it has the potential of making life better for all of us.”
Speaking further, Nami stated that the economy presently relies heavily on non-oil revenues to discharge its statutory responsibility of paying salaries and providing social amenities to the citizenry.
“Without the tax that you pay, governments at all levels would not be able to fulfil their mandate to the electorates. Tax money also helps to ensure the roads you travel are safe and always in good condition,” he added.
Nami also stated that despite sharp practices by some companies who were in the habit of evading taxes, by shifting their capital and profits to tax havens, as well as low revenue from Petroleum Profit Tax, due to the shortfall in crude oil production among other factors, the FIRS has been putting forward critical reforms that have been yielding positive impact on the Service’s operations.
“Adopting technology in tax administration is crucial in improving domestic revenue mobilisation in view of dwindling oil prices in order to avoid falling into a debt crisis. It is against this backdrop that the TaxPro-Max became the channel for filing Naira-denominated tax returns effectively from 7th June 2021,” Nami said.
“The TaxPro-Max enables seamless registration, filing of returns, payment of taxes and automatic credit of withholding tax as well as other credits to the Taxpayer’s accounts, among other features. The technology also provides a single-view to Taxpayers for all transactions with the Service.”
Despite ongoing pending legal tussle on value-added tax (VAT) collection, Nami added that FIRS had created ten VAT regional coordination offices across the country to drive revenue collection.
He said the FIRS collected N4.2 trillion between January and September 2021 as VAT following the “successful facilitation of ISO 27001:2013 Certification of the FIRS’ Exchange of Information Centre and the achievement of 114.66 percent of the VAT collection target in the first half of the year”.
While congratulating Isiguzo for his recent reelection as the national president, he urged NUJ members to be constructive and “should always confirm or verify sources and accuracy of information”.
Earlier, the NUJ national president said the visit of the union was part of his resolve to engage critical institutions as a stakeholder in charting a way forward for the country’s collective good.
Isiguzo described FIRS as a vital institution in the country, which “requires all the support when the country is security-challenged, adversely affected by Covid-19 and faced with FOREX crisis as well as political intrigues from different parts of the nation”.
