by Juliet Ade-Adam
At last, the Federal Inland Revenue Service (FIRS) has come to the rescue of the Nigerian government by finding a smart answer to the knotty question on how to finance the 2020 budget revenue shortfall as a result of the global economic crisis occasioned by the Covid-19 pandemic and its concomitant humanitarian disasters. That has come through the introduction of new tax order, especially the recent launch of Stamp Duty.
Stamp Duty is the sum of N5 chargeable on any electronic financial transactions through banks and relevant financial institutions or licensed operators from N10,000 and above. Going by the size of Nigerian economy, the vast network and volume of daily transactions, there is no doubt that FIRS has just discovered the next Nigerian goldmine.
Global economic powers have been shaking and leading economists and financial institutions are tasking their wits, reviewing and restrategising best fiscal measures to adopt so as to stop their economies from the looming collapse. There are desperate efforts to rescue industries from bankruptcy through bailouts. Job losses and unemployment rates are growing daily. Costs of living are skyrocketing. Worst still, there are mortal fears of a second spike of the pandemic in many world economic centres capable of sinking the current civilisation if care is not taken very fast.
Since the advent of the deadly pandemic, the Nigerian government through the Federal Ministry of Finance has been lamenting the zero level crash of crude oil prices at the international market because countries closed their international land, water and air borders as part of stringent measures to stop the spread of the virus. Multilateral and bilateral trade relations were suspended. How then could a country like Nigeria finance its 2020 budget? Where would it get the money from? What options are available to generate such required revenue outside our mono-economic structure?
The measures are sometimes dangerously competitive in unavoidable politics of the survival of the fittest. What could Third world countries like our do? In Nigeria, the long-sought answer to this intricate question is the executive chairman of FIRS. Among several passions and creativity he has brought to bear on the national revenue is the recent launch of Stamp Duty. This new policy backed up by law is designed to improve the revenue drive of the federal government as an option to the uncertain, unpredictable crude oil prices.
As a proof of the predictable significance of this new policy to the fiscal policy of the President Muhammadu Buhari, Nami announced the sum of N66 billion Stamp Duty remittance to the federation account. The amount was the collection of five months (January to May 2020) Stamp Duty. With renewed vigour demonstrated by the inauguration of Inter-ministerial Committee on the Audit and Recovery of Stamp Duty and subsequent launch of FIRS Adhesive Stamp in Abuja recently, the hope of raising revenue target bar through Stamp Duty is even brighter and higher.
The executive chairman of FIRS had expressed the huge potential of Stamp Duty and the big percentage it is capable of contributing to the N8.5 trillion 2020 revenue target given to the FIRS. If fully implemented, FIRS can generate the sum of N1trillion from Stamp Duty alone annually.
Commending the Nami-led FIRS for this smart initiative, experts even predicted that if all the channels of transactions in banks, financial institutions and licensed operators are well captured, Stamp Duty could become the boom of Nigeria’s national revenue next to oil, which is the main target of the Buhari administration.
It is, however, important to point out that to achieve this lofty feat does not come by cheap talk, superficial prediction and data analysis in cozy offices, neither is it by clinching to the traditional nay outmoded system of operation. Economic matters are practical life issues and not some kind of utopian love story set on the moon. It requires deliberate investment in cutting edge technology, well trained and empowered staff, as well as massive patriotic zeal. It comes with competence, skill, passion and leadership. Fortunately, these and more are what Nami has brought into FIRS.
It is therefore important that all stakeholders in the economic and financial sectors, state governments, federal lawmakers, all those in the tax net, the media and the entire citizens see the full import of the transformational policies and drive of Nami and give their maximum support and cooperation. He is a rare gem and the real deal for Nigeria’s Covid-19 and post Covid-19 economy in the present dispensation.
Ade-Adams writes from Victoria Island, Lagos, opinion piece published by BLUEPRINT
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