The Federal Inland Revenue Service (FIRS) is set to embark on a bold mission to increase tax revenue by an impressive 57% to N19.4 trillion in 2024, according to recent reports from Bloomberg. The tax agency aims to achieve this ambitious target by focusing on both oil and non-oil revenues, with plans to enhance efficiency, tax compliance, and organizational restructuring.
The FIRS outlined its strategy, aiming to raise oil revenues to N9.96 trillion and non-oil tax revenue to N9.45 trillion. To attain these goals, the agency plans to implement additional automation measures for tax collection, prioritize taxpayers through organizational restructuring, and undertake internal reallocation from oil to non-oil sectors.
In response to the budgetary adjustments, where oil revenue for 2024 saw a substantial 214% increase compared to 2023, while non-oil recorded a modest 3% rise, the FIRS emphasized the need for internal reallocation to optimize revenue collection.
The tax revenue surge aligns with President Bola Tinubu’s ongoing efforts to enhance government revenues. President Tinubu, who advocates taxing the “seed” rather than the fruits, initiated reforms earlier in the year. In July, he appointed Mr. Taiwo Oyedele to lead the Presidential Committee on Fiscal Policy and Tax Reforms.
The committee’s primary objectives include refining fiscal policies, tax laws, and regulations, reducing multiple taxation and tax evasion, and promoting a robust tax culture. The goal is to achieve a commendable tax-to-GDP ratio of 18% in the next three years, addressing the current ratio of 10.86%, which falls below the African average.
In the first half of 2023, the FIRS demonstrated its revenue-collecting prowess by securing a record N5.5 trillion, positioning the agency to surpass its 2022 collection of N10.1 trillion.
As the FIRS gears up for an intensified focus on tax revenue, the government’s fiscal and tax reforms are expected to play a pivotal role in reshaping Nigeria’s economic landscape. Stay tuned for updates as the FIRS navigates through its ambitious revenue targets in the coming year.