How FIRS losses all FCT revenue collection in Q1 2020

…as Finance Act passage down FIRS Withholding tax rate

By Al-Hameen Oluwaseyi

The Federal Inland Revenue Service (FIRS) has explained how the full take-over of Pay As You Earned (PAYE) and Personal Income Tax (PIT) led to revenue loss for the First Quarter (Q1) of 2020.

The revenue agency in a statement made available to the newsmen by the Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad, noted that the full captured of the PAYE and PIT in the FCT by FCT-IRS, made FIRS lost all Federal Capital Territory (FCT) collection during the period under review.

FIRS, also, explained that the passage of the Finance Act 2019 led to a drop in the Withholding Tax rate from 5 per cent to 2.5 per cent in some sectors.

Similarly, the Act, according to the FIRS, as well-tempered with Pre-operational levy (levy paid by taxpayers to obtain TCC) thereby resulting in a 5 per cent collection in Q1, 2020, a drop from 7 per cent in Q1, 2019.

Meanwhile, the nation’s tax collector increased revenue collection by 15 per cent to the total sum of N1.2 trillion for the first quarter of 2020, as against N1.04 trillion reported in the corresponding period of 2019.

Analysis of the figure for the period under review showed that the revenue agency improved in its tax collection by N156 billion when compared N1.203 trillion realised in the first three months of 2020 with N1.046 trillion during the same period of 2019.
This development indicated that the FIRS recorded an improved performance in tax collection trends, even as it Capital Gains Tax (CGT) recorded 568 per cent increase to N643.9 million from N96.4 million.

“Gas Income Tax rose by 420 per cent from N2,977,345,332.31 in Q1,2019 to N15,489,264,736.92 in Q1,2020. Even the Petroleum Income Tax (PPT) increased by 9 per cent.

“Other taxes such as Companies Income Tax (CIT) increased by 152 per cent – N102,610,369,777.73 in Q1, 2020 compared to N40,696,980,658.52 for the Q1, 2019; NITDEF rose by 522 per cent – Q1, 2020 N691,206,855.85 to N111,037,797.16 for the Q1, 2019; and Stamp Duty increased by 40 per cent from N3,386,648,663.85 in Q1, 2019 to N4,750,893,578.48 in Q1, 2020.

In fact, the Value Added Tax (VAT) improved by 27 per cent at the Customs Level and 13 per cent at the Non-Import Level.