When a letter from the Chief of Staff to the President, Abba Kyari, dated August 8 and addressed to the office of the Chairman of Federal Inland Revenue Service (FIRS), Babatunde Fowler, was leaked to the media over the weekend, feelers had it that Fowler might be under investigation and also undergoing intense pressure to deliver.
Background: The presidency queried why there had been shortfalls in revenue collection – compared to the agency’s forecast – since the inception of the Muhammadu Buhari administration. Fowler was also asked to explain why actual revenue collections between 2016 and 2018 were worse than the 2012 to 2014 ERA when Jonathan was President.
By the numbers:
- 2015: the FIRS set a N4.57 trillion revenue collection target but only collected N3.74 trillion
- 2016: the agency had a N4.95 trillion revenue collection target but only collected N3.3 trillion
- 2017: the agency collected N4 trillion
- 2018: FIRS claimed to have collected N5.3 trillion, and setting a new country revenue generation record.
In his defense, Fowler said that the shortfall in tax collection within the periods being compared were largely external including the economic recession and dip in oil prices.
- He based his argument on the facts that oil revenue constituted 40.65% (2016-2018) versus 57% (2012-2014) which represents a significant shift.
- Oil prices between 2016-2018 (avg $54 bpl) was about half the amount in 2018 ($103.8 bpl) in 2012-2014.
What it means: Fowler’s explanations makes sense. Naturally, a recession and significant oil revenue shortfall will naturally affect tax collection. But the Buhari administration has remained in denial about its own economic performance, and it will be hard to expect them to admit this. If anything at all, the Presidency should be asking itself questions.
However, it appears there has been some shift in the public stance of the Presidency towards Fowler. Presidential spokesperson, Garba Shehu wrote in a statement that: “It is necessary to state categorically that the Chairman of the Federal Inland Revenue Service, Babatunde Fowler, is not under any investigation.”