FIRS Proposes Road Tax to Shore up Dwindling Revenue

By Ashemiriogwa Emmanuel

In order to expand the tax net and shore up the dwindling revenue in Nigeria, the Federal Inland Revenue Service (FIRS) is proposing to the federal government the introduction of a road infrastructure tax.

According to the agency, the framework will help the government in actualizing adequate funding for road construction, rehabilitation, and maintenance, as well as security for roads by making the informal sector to contribute to building a modern society.

The Executive Chairman of the FIRS, Mr Muhammad Mamman Nami, said this on Thursday, October 21, when he received delegates of the Nigeria Union of Journalists (NUJ) led by its National President, Mr Chris Isiguzo, in Abuja.

“The only way to make the informal sector contribute to building a modern society is by making them pay when they use the roads. That is why we are proposing that government should consider introducing Road Infrastructure Tax in Nigeria,” the FIRS boss disclosed.

He explained that the proposed road tax is viable and will not come as an additional burden to small business owners in the country given that, in many jurisdictions, these road users usually pay for the use of road infrastructure.

Stressing the potential dangers of tax evasion by some companies, the chairman said, “Without the tax that you pay, governments at all levels would not be able to fulfil their mandate to the electorates. Tax money also helps to ensure the roads you travel are safe and always in good condition.”

In spite of this reality, coupled with the low revenue from the sale of crude oil, he was quick to note that the FIRS has implemented significant reforms that have been yielding positive impact on the service’s operations, especially by leverage on technology.

He said, “Adopting technology in tax administration is crucial in improving domestic revenue mobilization in view of dwindling oil prices in order to avoid falling into a debt crisis.

“It is against this backdrop that the TaxPro-Max became the channel for filing Naira-denominated tax returns effectively from 7th June 2021.”

Explaining the seamless features of the solution, he stated that the TaxPro-Max offers a single-view to taxpayers for all transactions with the Service including the filing of returns, payment of taxes, and automatic credit of withholding tax.