Nigeria's tax receipts stood at 5.5 trillion naira ($7 billion) from January to June 2023, the highest ever in six months, as the government steps up collection in both the formal and informal sectors, the revenue service said on Thursday.
The head of the Federal Inland Revenue Service (FIRS), Muhammad Nami, forecast that tax collection in 2024 will hit 25 trillion naira ($31.6 billion), more than double the amount collected in 2022.
Nigeria plans to reform its tax system, which suffers from high levels of evasion, and widen its tax base by removing barriers impeding compliance to achieve a target of at least 18% tax-to-GDP ratio in three years.
Africa's largest economy has one of the lowest tax collection rates in the world at around 10.8% of gross domestic product.
The government has repeatedly said it wants to boost non-oil revenues because oil sales account for much of foreign exchange receipts to curb reliance on borrowing for public spending.
Difficult task
Raising more money from taxes has proved difficult in a country where many small business are not registered.
“This half-year performance was achieved as a result of improved voluntary tax compliance by taxpayers... as well as our dogged engagement with stakeholders in both the formal and informal sectors,” Nami said.
Non-oil tax collection hit 3.76 trillion naira ($4.8 billion) while the oil sector fetched 2.03 trillion naira ($2.6 billion) in taxes during the six-month period, Nami said in a statement.
Nami further said the deployment of a new automated tax administration system had boosted collections.
He added that the FIRS was targeting collections of 7.5 trillion naira ($9.5 billion) for the second-half. He projected tax collection of 25 trillion naira ($31.6 billion) for 2024.
Tax revenue up
Tax receipts have risen since 2020 when a COVID-19 lockdown and a recession caused collections to drop to 4.95 trillion naira ($6.3 billion).
In 2022, tax receipts rose 56% to 10 trillion naira ($12.6 billion), the highest collection on record, up from 6.4 trillion naira ($8.1 billion) the year before.
Nigeria has embarked on its boldest reform agenda in decades, including the removal of a popular but costly petrol subsidy and restrictions on foreign exchange trading, a gamble that President Bola Tinubu hopes will boost sluggish growth.
