FIRS Boss Dr. Saach Adedeji Highlights Reforms In Nigeria’s Taxation Landscape

The Executive Chairman and Chief Executive Officer, Federal Inland Revenue Service (FIRS), Dr. Saach Adedeji, has highlighted some significant developments that have taken place in the country’s taxation landscape since his assumption of office one year ago.

Speaking today at the Lagos Chamber of Commerce and Industry-Federal Inland Revenue Organised Private Sector Stakeholders’ Engagement with the theme “Emerging Tax Matters,” organised by the Lagos Chamber of Commerce and Industry (LCCI), Adedeji who was represented at the occasion by the Acting Director, Medium Taxpayers Department, Mrs. Oti Olaniy, highlighted some of the significant transformations and reforms in the Nigerian taxation system in the past one year.

Some of the developments included organizational restructuring; tax reforms; streamlining operations and decentralizing key functions; crafting New Mission and Vision Statements to better align with it’s goals; creation of three operational groups from the previous – Small (Emerging Tax), Medium and Large Tax Groups to better cater for taxpayer needs according to their income threshold; creation of One-Stop-Shop: Both Tax Office and Tax Audit functions; introduction of several incentives to attract foreign investment and support local industries.

Other areas of reforms are leveraging technology to strengthen tax administration; development of a Taxpro Max platform which allows taxpayers to file returns and access various tax services online; establishment of a robust data management division to ensure accurate assessments and strategic planning; leveraging data analytics to enhance tax administration; introduction of tax education and public awareness to foster a culture of tax compliance; introduction of a simplified and business friendly tax regime on advanced payment of tax on specified transaction;  Finance Acts and Deduction at Source (Withholding) regulations 2024.

Adedeji said on  his assumptions of office on 18th of September 2023, he saw the need to unveil a new FIRS to drive the customer focus service delivery based on people, technology and process as well as harmonized tax services.

This reorganization, he said, represented a strategic shift towards attaining a customer-centric organizational structure aiming to systematically address challenges and ensure pragmatic reforms applicable to the Service’s complex realities. 

He said the reason for streamlining operations and decentralizing key functions , was to enable the Tax Agency address long-standing challenges and improve its responsiveness to taxpayer needs, towards creating a more agile and accountable institution.

“By streamlining operations and decentralizing key functions, the FIRS aims to address long-standing challenges and improve its responsiveness to taxpayer needs.

“This restructuring is not just an administrative change; it’s a step towards creating a more agile and accountable institution that can better support Nigeria’s economic growth and development,” FIRS boss explained.

He said “The rise of the digital economy presents a significant challenge to traditional tax frameworks. To address this, Nigeria has implemented new tax policies targeting digital platforms, including the Finance Act’s provisions on VAT for digital services. This is a crucial step in ensuring that global tech companies and entities which provide services to remotely contribute fairly to our economy. 

 “The Withholding Tax (WHT) was designed to provide government with regular revenue flow and serve as a means of cutting tax evasion. However, over the years as the regime expanded with more transactions, various ambiguities and complications crept in.

Adedeji maintained that the FIRS is committed to a customer-centric approach aimed at enhancing voluntary compliance and boosting revenue generation, stating that ensuring tax compliance benefits both businesses and the government.

According to him, when businesses meet their tax obligations, it translates into increased revenue for the government, which is essential for funding public services and infrastructure development, ultimately driving economic growth and societal well-being.

“As we explore various tax incentives to stimulate local industries, we must emphasise the need for transparency and effectiveness in the implementation of these incentives. Evaluating their impact and ensuring they align with national development goals is critical for maximizing their benefits.

“The informal sector, which constitutes a large part of our economy, poses unique challenges. Many small and micro businesses operate outside the formal tax system. To engage this sector effectively, the government is exploring simplified tax regimes and registration incentives.

“The recent restructuring of the FIRS into three operational groups—Small/Emerging Taxpayers, Medium Taxpayers, and Large Taxpayers—allows for a more focused approach in managing and supporting different segments of taxpayers. 

“As we move forward, we must continue to innovate and enhance our tax system. Soon, we will introduce the FIRS e-Invoice, a digital solution for managing invoices in line with the Tax Administration and Enforcement Act 2007. This initiative, as part of our Digital Transformation Strategy, will facilitate real-time transaction validation and storage, benefiting Business-to-Business, Business-to-Consumer, and Business-to-Government transactions,” FIRS Chairman explained.

In conclusion, Adedeji said “the emerging tax matters in Nigeria present both challenges and opportunities. By embracing reform, leveraging technology, and ensuring transparency, we can develop a tax system that supports sustainable growth and equitable development. Our collective efforts will pave the way for a more prosperous and resilient Nigeria.”

While calling for continued collaboration in advancing Nigeria’s tax system for the benefit of all its citizens, he said “As we move forward, we encourage you to support these initiatives with constructive feedback and collaboration. By doing so, we can all build a stronger, more resilient economy that benefits everyone.”