In a positive development for Africa’s largest economy, Nigeria has achieved a record-breaking revenue collection in the first half of 2023. The Federal Inland Revenue Service (FIRS) reported that the country collected a staggering 5.5 trillion naira ($7 billion) during this period, surpassing the government’s target of 5.3 trillion naira. This substantial increase in revenue collection has been attributed to the government’s efforts to improve the tax-collection process and enhance voluntary tax compliance by taxpayers.
Executive Chairman of the FIRS, Muhammad Nami, expressed his satisfaction with the half-year performance, attributing it to several factors. Improved voluntary tax compliance by taxpayers, advancements in automating tax administration processes, including updated VAT filing procedures, and persistent engagement with stakeholders across both formal and informal sectors of the economy have contributed to this remarkable achievement.
Furthermore, tax collection from the non-oil sector played a significant role in contributing 69% of the total revenue, with the remaining portion attributed to oil taxes. June alone saw the highest amount of revenue collected in a single month, totaling 1.65 trillion naira, reflecting the efficacy of the revenue service’s efforts.
Chairman Nami remains optimistic about the second half of the year, expecting further improvements in revenue collection. Despite challenges such as the impact of the currency redesign and the 2023 general elections on the economy in the first and second quarters, the government’s ongoing policies and the continued enhancement of tax administration processes are expected to drive positive outcomes.
“This is a good head start as we work toward meeting our target for the year,” said Nami. He expressed confidence that the second half of 2023 would show even better performance, underlining the positive impact of the government’s policies on the economy.
Nigeria’s strong revenue collection is crucial for addressing economic challenges and funding essential services and development projects. As the government continues to focus on improving tax collection and implementing prudent fiscal policies, the country aims to foster economic growth and stability, further solidifying its position as a key player in the African economy.