Babatunde Fowler, the chairman of the Federal Inland Revenue Service (FIRS) has been served a query by the Presidency on the poor rate of tax collection under his leadership.
The query, which covers 2015 to 2018, is to understand why there were “variances” between budgeted collections and the actual collections made by the agency.
The document titled, ‘Re: Budgeted FIRS Collections and Actual Collections,’ with reference number SH/COS/08/5/A/301, was signed by the Chief of Staff to the President, Mr Abba Kyari, and dated August 8.
Due to the observed variances in tax reports from the agency, the Presidency specifically directed Fowler to give “reasons for variances” by providing a detailed “variance analysis” for each tax head from 2015 to 2018.
The letter raised particular concerns over the collections for 2015 to 2017, describing them as “worse than what was collected between 2012 and 2014.”
In 2015, actual collection was N3.7tn, while the budgeted target was N4.5tn. A similar shortfall occurred in 2016, when actual collection was N3.307tn, less than the N4.95tn budgeted target.
Also, in 2017, the FIRS collected a total of N4.027tn, less than the set target of N4.89tn. In 2018, actual collection was N5.32tn, while the budgered target was N6.7tn.
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Fowler was appointed chairman of the FIRS in August 2015, but his appointment was confirmed by the Senate in December of the same year.
Kyari, in the letter, asked Fowler to submit a comprehensive variance analysis to explain reasons for the development.
Parts of the letter read, “We observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018.
“Accordingly, you are kindly invited to submit a comprehensive variance analysis explaining the reasons for the variance between budgeted and actual collections for each of the years 2015 to 2018.
“Furthermore, we observed that the actual collections for the period 2015 to 2017 were significantly worse than what was collected between 2012 and 2014.
“Accordingly, you are invited to explain the reasons for the poor tax collections.”