1. ADMINISTRATIVE CHANGES IN FEDERAL INLAND REVENUE SERVICE (FIRS)
TAX REFORM IN NIGERIA
ADMINISTRATIVE CHANGES IN FEDERAL INLAND REVENUE SERVICE (FIRS)
FIRS Presentation at VADA in ARUSHA, TANZANIA
FIRS Presentation at VADA in ARUSHA, TANZANIA

2. Introduction
Nigeria practices Fiscal Federalism. The country has three ties of Government (Federal, State and Local), with each of them having different taxing powers and authority expenditure. Each of these levels administers her own Function as approved by law.
Various notable changes have been made to Tax Administration, Laws and Policy in Nigeria in the recent times.
FIRS has a mission and vision statements.
FIRS has a Mandate of Assessment, Collection and Accounting for Taxes collected as provided by the constitution.
FIRS Presentation at VADA in ARUSHA, TANZANIA

3. CHANGES IN TAX ADMINISTRATION (i) MISSION & VISION OF FIRS
It has a mission and vision statements which are:-
Mission:
To operate a transparent and efficient tax system that optimizes revenue collection and voluntary tax compliance.
Vision:
To deliver quality services to tax payers in partnership with other stakeholders and make taxation the pivot of national development.
FIRS Presentation at VADA in ARUSHA, TANZANIA

4. (ii) INTRODUCTION OF NEW CORPORATE ORGANISATIONAL STRUCTURE
The new structure has five coordinating Directors from the former four. These are:
Coordinating Director Field Operation Group
Coordinating Director Modernisation Group
Coordinating Director Chairman Group
Coordinating Director Standard and Compliance Group
Coordinating Director Support service Group.
There are three models in the structure:
Per tax program.
Per tax administration.
Per taxpayer segment.
FIRS Presentation at VADA in ARUSHA, TANZANIA

5. (iii) Changes at the Departmental Level
Pre-2005, the Tax Operation Department were organized based on tax types and functions, but between , they were integrated at a single location as a one-stop-shop.
The Tax Operation Group later changed to field Operation Group (FOG) in 2012.
Presently, the FOG has six departments from original four viz:
- Large Tax Payers Department (Oil & Gas)
- Large Tax Payers Department (Non-Oil)
- Medium Tax Payers Department
- Micro & Small Tax Payers Department
- Individual & Enterprises Income Department
- Government Business Tax Department
FIRS Presentation at VADA in ARUSHA, TANZANIA

6. Changes Continued
Large Tax Office (Oil & Gas) handles all Oil and Gas cases.
Large Tax office (Non-Oil) created to handle turnover of =N=1 Billion and Above
Medium Tax Office =N=200 M - =N=999,999,999.99
Micro & Small Tax Offices now handles turnover of =N=1 - =N=199,999,999.99
(iv) Individual Tax Payers in Nigeria have been Uniquely
registered with TIN now changed to U TIN. The Tax payers
have been given a Tax Identification Number, and tax
transactions are now on-line.
FIRS has computerized payroll and pensions.
FIRS Presentation at VADA in ARUSHA, TANZANIA

7. Changes Continued
Government Business Tax Department has been introduced in
2012 to monitor VAT and WHT along all the 36
Federating States including the FCT and Local
Governments.
(vii) The Government is firming up towards reducing Corporate Tax and increasing Value Added Tax.
(viii) FIRS is now strictly performance oriented and a KPI
(key performance Information) has been introduced.
We operate by giving Target to offices nationwide and
performance is now measured against target after it has
been cascaded down to all the staff.
FIRS Presentation at VADA in ARUSHA, TANZANIA

8. (ix) IMPROVEMENT IN COLLECTION PERFORMANCE
A key change has been noted in the area of improved collection performance and are as summarized below.
INCOME PPT EDT VAT
=N=Billion =N=Billion =N=Billion =N=Billion
TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL TARGET ACTUAL
, ,
, ,
, ,
2012 *(Jan-Oct) * , * N/ A *
Source: CBN Remittance from Planning, Research and Statistics
Department of the Federal Inland Revenue Service, Nigeria.
* 2012 Target not included in this presentation.
FIRS Presentation at VADA in ARUSHA, TANZANIA

9. Trend of FIRS revenue performance
FIRS Presentation at VADA in ARUSHA, TANZANIA

10. (x) Integrated Tax Administration system (ITAS)
An Integrated Tax Administration System project has also been approved by the Federal Executive Council. Telnet Nigeria Ltd and Sogema Consortium were awarded the contract for the project and are currently performing well.
The Mckinsey team were also engaged towards improving non oil revenue.
At the Modernisation Unit we have projects : VAT Automation, CAC and NCS integration, SAP/HR, SAP/F&A, SAP/Financing and I-SHARE.
FIRS Presentation at VADA in ARUSHA, TANZANIA

11. CHANGES IN TAX LAWS various Changes were made also into the Tax laws, amendments and regulations viz:
(i) The original Personal Income Tax Act (PITA) has been amended in 2011 and brought about the following landmark changes: - The allowances, remunerations, benefits and perquisites of the President, the VP and others, initially exempted political office holders are now brought under the tax dragnet. - Personal reliefs and allowances are now consolidated, and easy to calculate. - The tax is progressive: The more you earn, the more you pay, with minimum tax provision included.
FIRS Presentation at VADA in ARUSHA, TANZANIA

12. Changes to tax Laws Continued
A self assessment regulations 2011 was also
gazetted and it sets out processes, procedures and standard guidelines in support of an efficient tax
administration system.
Other changes in Tax laws include
Companies Income Tax (Exemption of Bonds and Short Term Government Securities) order, granted 10 years tax exemption.
FIRS Presentation at VADA in ARUSHA, TANZANIA

13. Changes to tax laws continued
Value Added Tax (Exemption of proceeds of the Disposal of Government and Corporate securities) order 2011 for 10 years as well, thus modifying part of the original VAT Act.
Amendment to the Fifth schedule to the Companies Income Tax act No. 1 of 12th December, 2011
Exemption of Holders of Bonds and Short term Government securities Notice 2011 exempting income earned from this source from PITA for 10 years.
FIRS Presentation at VADA in ARUSHA, TANZANIA

14. Changes to Tax Laws Continued
Companies Income tax (Exemption of Profits) order granted tax relief to companies that employed fresh in- experienced graduates (effective April, 2012).
FIRS Presentation at VADA in ARUSHA, TANZANIA

15. CHANGES IN TAX POLICY National Tax Policy.
Nigeria now has effective Tax policy that has become a reference point for the country, relevant Federating States and Local Council and other stake holders. This still requires more publicity for general understanding and acceptability.
FIRS Nigeria now operates with a Medium Term Plan and anything the organisation does is keyed into the Plan.
FIRS Presentation at VADA in ARUSHA, TANZANIA

16. CONCLUSION
The above highlighted recent changes are in exhaustive and may be too numerous to be listed here, but above all, the changes have translated to higher revenue collection in the year 2012 (revenue target exceeded), faster service delivery to taxpayers, while Taxation is focused by the Government as the Pivot of National development.
Thank you for listening
Aliyara A.I.
Nigeria
FIRS Presentation at VADA in ARUSHA, TANZANIA