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Nigeria’s tax revenue soars to record high in first half: Report

TL;DR

  • Nigeria’s tax revenue hit a record 5.5 trillion naira ($7 billion) in H1 2023, exceeding targets.
  • Despite economic challenges, the FIRS anticipates better performance in H2 2023.
  • June’s government revenue doubled to 1.9 trillion naira, with funds allocated to offset fuel subsidy removal.

Nigeria, Africa’s largest economy, has reported a record tax revenue of 5.5 trillion naira ($7 billion) for the first half of the year, exceeding the government’s target of 5.3 trillion naira. However, the Federal Inland Revenue Service (FIRS) attributes this success to improved voluntary tax compliance, enhanced automation of tax administration processes, and robust engagement with stakeholders across both formal and informal sectors.

The non-oil sector played a significant role in this achievement, contributing 69% of the total revenue, while oil taxes accounted for the remaining 31%. The month of June alone saw revenue collection reaching 1.65 trillion naira, marking the highest amount collected by the service in a single month.

Navigating headwinds: Optimism for the second half of 2023

Despite facing challenges such as the impact of currency redesign and the upcoming 2023 general elections, the FIRS remains optimistic about the second half of the year. Executive Chairman Muhammad Nami expressed confidence in the continued improvement of tax administration processes and the positive impact of the government’s current policies on the economy.

“This is a good head start as we work toward meeting our target for the year. We believe that the performance in the second half of the year would be better considering the continuing improvement to our tax administration processes and positive impact of current government’s policies on the economy.”

Executive Chairman of FIRS, Muhammad Nami

In June, total government revenue more than doubled to 1.9 trillion naira. Out of this amount, 590 billion naira will be transferred to an Infrastructure Support Fund. This move is part of measures to offset the impact of the government’s decision to remove fuel subsidies, according to an emailed statement from President Bola Tinubu’s office.

The record tax revenue and the government’s proactive measures to support infrastructure development highlight Nigeria’s commitment to strengthening its economy. As the nation continues to navigate economic headwinds, the focus remains on improving tax compliance, leveraging technology in tax administration, and engaging stakeholders to ensure sustainable revenue growth.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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