Revenue Leakage: FIRS Decries Abuse of FG’s Pioneer Incentive Scheme

Malik Yahya/

The Federal Inland Revenue Service (FIRS) has decried the systemic abuse of the pioneer incentive scheme instituted by the Federal Government, which has led to tax revenue leakages for the three tiers of government.

This was disclosed by the Coordinating Director, Tax Operations Group of FIRS, Mr Femi Oluwaniyi, while addressing the commissioners for finance of the 36 states of the federation, who paid a courtesy visit to the Revenue House headquarters of the Service in Abuja, yesterday.

A statement by FIRS’s Director of Communications and Liaison, Abdullahi Ahmad, quoted Oluwaniyi as decrying the indiscriminate tax waivers and incentives granted to undeserving companies, which has impacted negatively on revenue generation.

He disclosed that FIRS has discovered that pioneer status certificates had been issued to companies that were not pioneers in their fields in the real sense, hence undeserving of such status.

According to him, this development has led to loss of considerable tax revenue to the three tiers of government.

He said the Service was determined to plug this tax revenue leakage in order to generate more revenue for the three tiers of government.

As part of measures to address the problem, Oluwaniyi said the FIRS has begun auditing its findings with a view to pressing for the cancellation of pioneer certificates issued to undeserving companies in violation of the law.

ln the meantime, he said the FIRS would ensure that pioneer status granted outside the law no longer enjoy tax relief regardless of the certificate issued to them.

He also advised owners of such illegal certificates to endeavour to regularise their tax positions, otherwise sanctions would be applied against them in accordance with the law.

He expressed appreciation to the state commissioners for finance for the visit and for their support so far in revenue generation for the federation.

Speaking earlier, Executive Director of FIRS, Mr. Muhammed Nami, disclosed that tax revenue accounted for nearly 70% of the N676.407 billion shared between the three tiers of government for the month of July at the last the last meeting of the Federation Accounts Allocation Committee (FAAC).

He lauded the collaboration between the Service and the state commissioners for finance, saying this is key to bringing about increase in tax revenue.

He observed that without such a robust collaboration, it would be difficult for government to meet its obligations to the citizenry in such areas as infrastructure development and salary payment, which could lead to social dislocation.

Nami also emphasised the need to diversify the economy in order to create more sources of taxable income and increase tax revenue for the nation.

He implored the states to focus on other forms of taxes like the Stamp Duty, which he described as a “black gold” that has been ignored before now.

He also charged all Ministries, Departments and Agencies to ensure that Withholding Tax is duly deducted from contracts at the point of payment.

Nami solicited support of the states in terms of taxpayer sensitisation campaigns and education, stating that rental obligation was incomplete without the payment of Stamp Duties.

He emphasised that if these initiatives were pursued at both local and state levels, more revenue would be generated.

Leader of the delegation, who is also the Benue State Commissioner for Finance, Mr David Olofu, congratulated Nami on his accomplishments in office within a short period of time, noting that this has made it evident that his appointment was well-deserved.

Olofu also said that the states are fully committed to working closely with FIRS in order to generate more tax revenue for the country.

Abdullahi Ismaila Ahmad
Director, Communications and Liaison Department
Federal Inland Revenue Service

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