economy
FIRS, NCS to get $10 million for technical assistance from $750 million World Bank loan
The Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) are expected to receive $10 million for technical assistance as part of the newly approved $750 million Nigeria Accelerating Resource Mobilization Reforms (ARMOR) Program-for-Results (PforR) project.
This project is part of the broader $2.25 billion approved by the World Bank for Nigeria on June 13, 2024, to boost reforms in the country.
The amount approved for the ARMOR project includes results-based financing of $730 million, and $20 million in investment financing.
This means that there is an initial release of $20 million while the remaining $730 million will be released based on Nigeria’s ability to meet certain requirements.
According to a stakeholder engagement plan document for the project obtained from the website of the World Bank, the FIRS and the NCS will get $5 million in investment financing each.
$5 million for FIRS
The FIRS will receive $5 million to develop and implement critical initiatives aimed at enhancing its operations and revenue collection capabilities.
This funding will support the development and implementation of a robust third-party data sharing platform, along with administrative control programs to streamline operations and enhance efficiency.
Additionally, the FIRS will develop a VAT lottery system and an e-invoicing system, both of which rely heavily on advanced software and extensive communication planning. These systems are designed to boost VAT collections and improve compliance among taxpayers.
Furthermore, the funding will facilitate the creation of a risk-based audit assessment program for VAT and Corporate Income Tax (CIT), aimed at enhancing the effectiveness and efficiency of audit processes within the agency.
$5 million for NCS
Similarly, the NCS will receive $5 million to enhance its administrative processes and improve compliance. This funding will be used to design and implement new administrative processes, including the establishment of sanctions for non-compliance with excise rules.
The NCS will also develop centralized control room systems equipped with backup and disaster recovery capabilities, ensuring operational continuity and resilience in case of emergencies.
Moreover, the funding will support capacity-building initiatives, enabling the NCS to effectively manage and implement these new systems and processes, ultimately leading to improved compliance and operational efficiency.
More Insights
- The ARMOR program includes three main result areas: implementing tax and excise reforms to increase VAT collections and excise rates on health and environmentally friendly products, strengthening tax and customs administrations to enhance VAT compliance and effectiveness of audits, and safeguarding oil and gas revenues by increasing transparency and net revenue contributions.
- Nairametrics also reported that the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), and Nigerian Upstream Petroleum Regulatory Commission (NUPRC) saw a 131% increase in their cost of revenue collection in Q1 2024, totalling N214.29 billion.
- The significant increase in the cost of revenue collection by the FIRS, NCS, and NUPRC in Q1 2024 has sparked calls for a review from state finance commissioners, who noted the disproportionate impact on revenue distribution to the states.
