The Presidency has questioned the tax collection variations and remittances by the Federal Inland Revenue Service for the period covering 2015 to 2018, under the chairmanship of Dr. Tunde Fowler.
It noted in a query sent to Fowler, that 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.
The letter was a response to an initial report on tax collections Fowler forwarded to the President on July 26 with reference number, FIRS/EC/CWP/0249/027.
Due to the observed variances, 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.”
The FIRS boss was further instructed to respond to the query latest by August 19 (today).
In the concerned years, the actual amount collected as tax fell below the budgeted target.
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.
Fowler was appointed chairman of the FIRS in August 2015, but his appointment was confirmed by the Senate in December of the same year.
The query covers the period he has been in office.
His tenure is expected to expire at the end of August, although there are also suggestions that the expiry date could be December, the month his appointment was confirmed.
Although the appointment could be renewed by President Muhammadu Buhari, the query has raised doubts over Fowler’s continued stay in the office.
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.”
It was not clear whether the FIRS chairman had turned in his response as of the time of filing this report.
Efforts to reach the spokesman for the FIRS, Mr Wahab Gbadamosi, were not successful, as calls to his mobile telephone number did not go through.
A text message sent to his phone was delivered, but he did not reply to the SMS.
A source in the FIRS said Gbadamosi might be away on Hajj.
The source also suggested that the query could be part of a plan to remove Tunde Fowler from office.
“How come the query is coming this late towards the end of his first term? I think they want a reason for not renewing his appointment,” the source said.
One of our correspondents was unable to get the comments of presidential spokespersons, Mr Femi Adesina and Mr Garba Shehu on Sunday.
However, a reliable Presidency official confirmed that Tunde Fowler was indeed asked to make “explanations” over the variations, but not queried per se.
“It is true that the letter was indeed written on behalf of the President by the Chief of Staff”, the Presidency source revealed.
The official, who declined to be named, explained that the Presidency initially directed Tunde Fowler to submit a remittance report by FIRS covering a period of 10 years.
However, it was observed that while the agency surpassed its target from 2010 to 2014, it began to fail in doing so from 2015 to 2018.
The source said, “It is not a query per se. It is just a request for explanation.”
But a Senior Advocate of Nigeria, Mr Seyi Sowemimo, said he was not aware that the Chief of Staff to the President had the statutory power to query the FIRS chairman.
Sowemimo said, “I suppose he wasn’t acting on his own. I would assume that he was acting on behalf of the President. I don’t think he (Kyari) in his capacity could query the FIRS chairman.
“It would have been different if he had said he was acting on the instructions of the President; that would have made it quite clear.”
The Head, Tax and Corporate Advisory Services at PwC Nigeria, Mr Taiwo Oyedele, said the focus should not only be on revenue collection but how the tax system was managed.
He said, “It is a normal process to ask people to explain if they have not met their budget; but we have to improve our entire tax system.
“We need to review our tax laws that are creating problems. We have to reform tax policies; tax laws and make it to enable businesses, protect the poor and vulnerable people and help Nigeria to develop.