How to maximise revenue from taxes in Africa

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From Uche Usim, Abuja

The Chairman, Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, has said African nations can generate huge revenue from excellent tax administration, calling for autonomy of tax agencies.

Speaking to chief executives of African Tax Authorities at the African Tax Administration Forum and International Monetary Fund seminar, with the theme “Board Governance in African Revenue Authorities” in Cape Town, South Africa, recently, Fowler said the future was bright for Africa, even as he urged African leaders to strengthen tax institutions and prime them to generate more revenue for their countries.

Fowler stated that tax revenue grew from N1.846 trillion in 2007, when FIRS was granted autonomy, to an average of over N4.5 trillion in 2015, while in the Lagos Inland Revenue Service (LIRS), tax revenue grew from N50 billion in 2007 to N270 billion in 2015.

Fowler, who spearheaded the autonomy of the LIRS as a pace-setter in Nigeria, shared the experience of the autonomous FIRS and LIRS  in his presentation.  He pointed out that the autonomy of the Nigeria’s tax authorities has triggered a surge in collection by tax authorities in the country.

“Clearly, revenue authorities across Africa have the potential to generate funding for their respective governments and they will perform better if they are allowed to fully be in charge of their day-to-day operations and empowered to hire staff, pay competitive salaries and provide regular training for staff,” he said.

The FIRS boss added: “The compelling evidence from Nigeria’s experience is that wherever revenue authorities have been granted operational, administrative and financial autonomy and allowed to operate with minimal civil service bureaucratic encumbrances, revenue administration has been enhanced and tax collection performance has gone up significantly.