On Saturday, 2nd December 2023, a wheelbarrow pusher stabbed a government revenue official in Benin City (Edo State) and instantly turned the same knife on himself. The duo died out of desperation for survival. This incident reminds one of the of Arab Spring that began in Tunisia on 18th December 2010. Mohamed Bouazizi, a Tunisian, committed suicide by setting himself ablaze out of frustration and in reaction to pressure from government agent. It is not my intention to scare you with this introduction. Rather, it is to remind you of the enormity of the responsibility of your office at this critical time in the history of our country.

On that note, let me congratulate you on your appointment to one of the plum offices in the land. It is plum given the size of its annual budget, comparable to that of most state governments! The Federal Inland Revenue Service (FIRS or Service) has also played a critical role in stabilizing the country during the last administration when oil price took a plunge. The Service rose to the challenge and gave a ray of hope. The agency generated unprecedented quantum of tax revenue in the country. One must, therefore, appreciate the enormity of the challenge you face given the target of the current administration to use tax revenue to drive economic growth. The plan to double collection and achieve double digit tax-to-GDP ratio within 36 months is no mean feat.

There is, however, one significant concern. You are in hot demand by the present administration that you currently hold two additional top and high demanding positions – Special Adviser to President on Revenue and Co-Chairman, Nigeria Carbon Market Activation Plan. This singular action creates an erroneous impression out there that it does not appear that the government appreciates the enormity of the responsibility of the Office of Executive Chairman of FIRS. Time will tell if this is appropriate.

Nevertheless, the purpose of this letter is to suggest three major areas that you may consider to enable you make a lasting positive impact at the helm of affairs of FIRS:

Political will

Tax is a major cost of doing business. It is a cost that most people, if given the opportunity, will try to avoid. Government is seen as taking a share from what it does not have direct contribution. In Nigeria, most people will make every effort to avoid payment of tax. Thus, there is an expectation of a push-back from people who have not been used to paying appropriate tax. You may also want to note that, as of date, I am not aware of any individual that has been successfully prosecuted and imprisoned for failure to pay tax. Thus, there is no appropriate deterrent for non-compliance. In some jurisdictions, the penalty for tax evasion is higher than murder. Government in those countries will also not spare any effort to prosecute those who fail to comply.

Given the above, you may need to re-confirm from your boss (albeit indirectly with lots of wisdom), his determination to support FIRS to collect tax from those that are hitherto non-compliant. During the December 2023 meeting with tax practitioners, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, narrated an instance where your equivalent in one of the States was mandated to apologize to a businessman. His offence was that he had the 'effrontery' to write to the businessman's company that the tax authority wanted to audit their records for tax compliance. It was alleged that since the businessman co-sponsored the election of the Governor, he should be 'exempted' from tax payment!

The President may also assist to show leadership by example by directing FIRS to start the exercise from companies or business ventures for which he has direct and/or indirect interest. The exercise should cover companies owned or controlled by his associates. At least, we now know that some senior government political appointees have direct and/or indirect interest in companies that benefit from government contracts. The exercise should, therefore, start from corporate vendors especially those that benefit from plum contracts awarded by the federal government. If the exercise is properly and transparently done, albeit in strict compliance with the provisions of the law, government would have scored a political point showing its readiness to hold everyone accountable especially from tax administration perspective.

Deployment of FIRS' capacity

Currently, the FIRS has the largest concentration of knowledgeable and experienced tax professionals in the country. These experts are however concentrated in very few offices. Some of these officers also currently report to some individuals at the Head office, creating an unnecessary bottleneck in tax administration. One wonders the need for this administrative bottleneck in circumstance where the law permits FIRS to revisit an issue as 'often' as it deems necessary within the six-year statutory period.

In this regard, there is need to spread the few capable hands among several offices. This will enable the few capable ones to provide hands-on-training to the multitude of tax officials who are currently challenged in both tax and accounting knowledge and practice.

FIRS also needs to enhance some of its employees' knowledge of modern financial reporting system. A significant number of FIRS officials cannot navigate the accounting reporting systems of most organizations. In a situation where most of the electronic-financial reporting modules are available at scalable level making it possible for even small and medium enterprises to deploy for their businesses, there is urgent need to scale up the level of knowledge of tax officials to be able to navigate taxpayers' financial reports during an audit.

Secondly, it makes no sense for anyone, who was not part of the field audit exercise and with little or no knowledge of taxpayers' special circumstances and situations, to be the decision maker in respect of tax audit exercises. Often, these officials do not add any major value other than elongate the process. If FIRS wants to double tax revenue within the time stated, there is need to decentralize administrative authority to close an audit.

Risk-based tax audit

Innovations in information technology have changed the mode of accounting and tax audit worldwide. Since book-keeping and accounting have been significantly impacted by these innovations, external auditors have also improved their skills and work approach to meet-up with the challenge. FIRS needs to catch-up with this fast-changing trend. Most FIRS tax auditors still conduct tax audit exercises by seeking to vouch voluminous supporting documents. Data analytics tools can easily be deployed to enhance compliance and limit fraud. These tools will provide insights on trends and patterns and allow the tax auditors to focus on areas requiring further explanations.

FIRS needs to modernize its tax audit and investigation procedure. One of the options available is to adopt a risk-based system of audit. This is used in most economies with high tax-to-GDP ratio. Under the approach, the tax authority will only audit any company if the independently assessed risk shows a range higher than a threshold. Even in such instance, the tax auditors would initially perform an independent review before alerting the taxpayer.

In Nigeria, FIRS has turned tax audit to a routine exercise that should be conducted on all companies, irrespective of the level of risk assessment. The Service requires taxpayers to produce documents for this purpose without any evidence of independent review prior to commencement of the audit exercise. In some instances, it is the taxpayer that would make the compliance documents, such as financial statements and tax returns, available to the tax auditors to enable them commence work. This mostly leads to unnecessary review and prolonged discussions especially if after spending significant time and efforts on a company's records, FIRS officials are not able to discover any area of material non-compliance. The tax officials would sometimes come up with exaggerated report with the intention to squeeze the hapless taxpayer to part with some funds to compensate for their efforts. There is, therefore, an urgent need to modify how tax audit is conducted to enable the Service to deploy its limited resources to more critical areas that will bring more people into the tax net.


In closing, some people have wondered why most people bearing Zacchaeus are tax collectors. While we may not know the reason, we however know some things about the Zacchaeus reported in the holy scripture. He was very dutiful, having been found at his duty post on the day he met Jesus. He was also an honest man who performed his duty with utmost integrity despite the perception to the contrary even by the society. He was also very generous and took care of the less privileged without having any record of corruption.

Possibly toeing this line, Mrs Ifueko Omoigui-Okauru arguably happened to be one of the best chief tax collectors that ever occupied that office. She simply raised the standard of FIRS to its current enviable level. She was an extremely focused Chief Executive, who worked tirelessly round the clock to deliver. She was upright beyond the ordinary and of utmost integrity as a public servant. She remained a reference point today and sought after by many corporate organizations as an advisor.

Sir, you have a great task ahead of you to be another reference point, performing far higher and better, than these two great tax collectors. I wish you best of luck.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.