FIRS raises new taxes, cost first class air ticket rises

Posted: July 3, 2015 in Uncategorized

LUXURY class fliers are paying more for their comfort on flights, it was learnt yesterday.

The Federal Inland Revenue Service (FIRS), desperate to fatten Nigeria’s lean purse, has introduced new taxes. Among them is a N15,000 levy on first class and business class travellers.

Besides, private jet owners are to pay taxes for enjoying the luxury.

The battle to open other tax avenues is coming amid the bad fortune of  oil and gas —the economy’s live wire.

FIRS Acting Chairman  Sunday Samuel Odugbesan, who led other officials of the Service, spoke when they visited Senate President Bukola Saraki in Abuja.

Besides the downward slide of oil price, according to the FIRS boss, there are  insecurity, the uncertainty caused by the general elections and the late passage of the 2015 budget.

Odugbesan told the Senate President that the FIRS collected N697.07 billion from Petroleum Profit Tax in the first six months of the year. The non-oil component income tax, yielded N778 billion between January and June and Value Added Tax N376billion.

He said the FIRS was expecting between N12 billion to N15 billion monthly from the Nigeria Customs Service (NCS).

The FIRS boss put the annual target at N1.4trillion; N123.74bn is expected monthly.

He described the total tax collection as “the worst performance for the oil industry in the last 15 years”, saying the Service collected only N50bn from the sector.

Odugbesan explained that the reason for this was because three major oil companies had nothing to pay because of the huge increase in cost of production.

He said the FIRS was already working out new tax regimes to shore up its revenue collection.

Part of the new tax regime, Odugbesan said, is to tax private jet owners, mansion owners and traveller who fly business and first class.

Odugbesan said the FIRS was made to understand that there are more that 130 private jet owners in the country.

He said the FIRS raised N100 million from a particular company that operates private jets.

He added that it planned to convince the government to tax those who fly first class and business class.

Odugbesan said: “We received a letter inviting us to appear before you so that we can share some thoughts and we have given you copies of our presentation.

”This is as a result of many factors many of which are completely outside our control.

“The price of oil in the international market that we all know has continued on the downward slide although in the last three months; it started gathering some momentum.

“As at today, I think it averages $ 62, but the average we have computed is $59. That is what is obtainable today.

“So what is within our purview is actually what intervention we can make to shore the collection from non-oil sector.

“As at the end of June, we have not actually got the total figures for June yet, which just ended yesterday. And for JP Morgan that is assisting the Federal Government to collect foreign component of our collection, they will still give us report a week after the close of the month.

“Why is it low this way? Everyone knows that for the first quarter and even the second quarter, there hadn’t been much activity in the land, the month of March and April, fears of uncertainty.

“If you add that to the insecurity situation in the Northeast, most of our offices, they have to be hiding to do their work. It is that bad.

“The other is that government is the biggest spender; when government sends money into the economy, it creates activity. Even the banks themselves would be in the position to loan out money to business entities.

“You engage everyone. We see the oil sector as the sector that is really driving because it is the mainstay of the economy but we often do not realise that if government does not support that sector, through cash calls, virtually nothing would happen in the oil sector.

“If government does not spend money, the withholding taxes from that sector is not realised and the value income tax is not realised, Bureau of Statistics will tell us that the aggregate leve

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