Adedapo Adesanya
By Adedapo Adesanya
The Chairman of the Federal Inland Revenue Service (FIRS), Mr Muhammad Nami, has projected that Nigeria’s tax collection in 2024 could hit N25 trillion, more than double the N10.1 trillion collected in 2022.
Nigeria has one of the lowest tax collection rates in the world at around 10.8 per cent of gross domestic product (GDP). Past governments have repeatedly said they want to boost non-oil revenues but were not able to meet the target.
Nigeria’s oil sales account for as much as 80 per cent of foreign exchange receipts, but the dwindling revenue from it over the years has led the country to rely on borrowing for public spending.
However, raising more money from taxes has proved difficult in a country where many small businesses are not registered.
The Bola Tinubu administration has vowed to boost tax collection, and Mr Nami said the service was on course as it revealed the half-year collections on Thursday.
According to the official, Nigeria’s tax receipts stood at N5.5 trillion from January to June 2023, the highest ever in six months.
He noted that non-oil tax collection hit N3.76 trillion while the oil sector accounted for N2.03 trillion in taxes during the six-month period.
The FIRS Chairman said the deployment of a new automated tax administration system had boosted collections.
Mr Nami said the FIRS was targeting collections of N7.5 trillion for the second half and projected tax collection of N25 trillion for 2024.
Recently, FIRS moved to partner with the Market Traders Association of Nigeria (MATAN) to collect and remit Value Added Tax (VAT) from their members, especially those in the informal sector.
According to the tax body, the collaboration between FIRS and MATAN will also boost VAR revenue generation for the three tiers of government, which in turn means more money to fund infrastructure and social amenities.
This, they added, will be done using a purpose-built digital platform.
Tax receipts had risen since 2020, when a COVID-19 lockdown and a recession caused collections to drop to N4.95 trillion.
In 2021, the FIRS announced an increase in tax collection to N6.4 trillion, while last year, this figure jumped 56 per cent to N10.1 trillion.
