Elombah
Take a fresh look at your lifestyle.

Report Of The Senate Committee On Finance On The 2016 Budget FIRS

REPORT OF THE SENATE COMMITTEE ON FINANCE ON THE 2016 BUDGET OF THE FEDERAL INLAND REVENUE SERVICE FIRS

1.0 INTRODUCTION

The Senate at its Sitting on Thursday, 21st July, 2016 considered the request of Mr. President, Commander-in-Chief of the Armed Forces of the Federation on the 2016 Budget of the Federal Inland Revenue Service and referred same to the Committee on Finance for further legislative action.

The referral was formally transmitted to the Committee via a letter reference NASS/8S/R/O3/VOL.1/274 dated 25th July, 2016.

2.0 BACKGROUND

Mr. President, Distinguished Senators, the Federal Inland Revenue Service is one of the Federal Government Agencies established in 2007 by an Act of the National Assembly, The overall mandate of FIRS is to collect taxes for the Federation and enforce compliance with tax laws across the Federation.

The Federal Inland Revenue Service (FIRS) is funded by 4% Cost of Collection of all Non-Oil and Gas taxes collected by the Service which should be appropriated by the National Assembly as stipulated in section 15 (a) of the FIRS Act, 2007.

In compliance with the FIRS Act, the Service forwards its pr0posed budget to the Senate and House of Representatives Committees on Finance for consideration and approval.

2015 BUDGET PERFORMANCE

In 2015, the National Assembly Joint Committee on Finance approved 3 Revenue Projection of N436 Trillion (Four Trillion, Thirty-Six Billion Naira) comprising of N1.74 trillion (One Trillion, Seventy-Four Billion Naira) Oil Revenue and N262 Trillion (Two Trillion, Sixty-Two Billion Naira) Non-Oil Revenue, respectively. The projected 4% Cost of Collection of Non-Oil Revenue is N104,723,’880,000 Billion (One Hundred and Four Billion, Seven Hundred and Twenty-Three Million, Eight Hundred and Eighty

Thousand Naira). The total approved available funds for FIRS in 2015 Budget was N118,959,467,080 (One Hundred and Eighteen Billion, Nine Hundred and Fifty-Nine Million, four Hundred and Sixty-Seven Thousand and Eighty Naira), comprising of the 4% Cost of Collection and N14,23S,587,080 (Fourteen Billion, Two Hundred and Thirty-Five Million, Five Hundred and Eighty-Seven Thousand, and Eighty Naira) arrears of 2014 Cost of Collection for Education and Personal Income Tax (PIT). 

2016 PROPOSED BUDGET

The Federal Inland Revenue Service (FIRS) projected to collect tax revenues to the tune ofN4.082 trillion (FourTrillion and Eighty-Twobillion Naira) in 2016. This Comprises of N484]billion (Four Hundred and Eighty-Four Billion, Seven Million Naira) oil revenue and N3.597 trillion (Three Trillion, Five Hundred and Ninety-Seven Billion Naira) non-oil revenues. The projected 4% Cost of Collection on non-oil revenue is N143,904,640,000 Billion (One Hundred and Forty-three Billion, Nine HUndred and Four Million, Six Hundred and forty Thousand Naira). The total projected available fund for 2016 Budget is N146,165,108,293 (One Hundred and Forty-Six Billion, One Hundred and Sixty-Five million, One Hundred and Eight Thousand, Two hundred and Ninety Three Naira) comprising of 4% Cost of Collection and N2,260,468,293 (Two Billion, Two Hundred and Sixty million, Four Hundred and Sixty-Eight Thousand, Two hundred and Ninety-Three Naira) 20% of 2015 operating surplus.

The summary of HRS proposed 2016 total Expenditure is as follows:

1. Personnel N64,491,130,526

2. Overhead N46,363,000,000

3. Capital N32 868 300 000

Total Expenditure N143,722,430,526

6.0 OBSERVATIONS:

The Committee made the following observations:

1. That in compliance with Section 15 (a) of FIRS Act, 2007, the Service submitted its 2016 Budget Proposal to the Senate and House of Representatives Committees on Finance and appeared before the Joint Committee for budget defence;

2. That the projected non-oil revenue collection has increased from the 2015 collection thereby increasing  4% Cost of Collection to the Service to the service to N143, 904, 640, 000 Billion (One Hundred and Forty Three Billion, Nine Hundred and Four Million, Six Hundred and Forty Thousand Naira) from N104,723,880,000 Billion (One Hundred and Four Billion Seven Hundred and Twenty-three Million, Eight hundred andEighty Thousand Naira) in 2015;

3. That the total Personnel costs are for salaries, wages, allowances, performance bonuses, and social contributions. The 8,000 staff are proposed to be on the payroll during the 2016 financial year which accounts for the increase of 19% above actual staff strength of 6,748. The projection presumes a recruitment of new staff in 2016;

4. The Overhead Cost is a very vital in driving the achievement of FIRS core objectives of Tax revenue generation. The provisions in 2016 budget give more emphasis on availability of office materials, training, consulting and professional services and publicity; and

5. That the Capital cost estimates proposed includes ongoing projects, which are to be completed during the 2016 financial year, as well as new projects to be carried out. These projects includes: New Corporate Headquarters and other prototype offices, construction of new offices nationwide, ICT projects.

7.0 RECOMMENDATION:

The Committee recommend that a total Expenditure of N143, 722,430,526 (One Hundred and Forty-Three Billion, Seven Hundred and Twenty-Two Million, Four Hundred and Thirty Thousand, Five Hundred and Twenty-Six Naira) be approved for FIRS in 2016.‎

 

Comments are closed.