- Over the years, the Federal Inland Revenue Service (FIRS) has gone above and beyond to generate as much tax revenue as it can to fund the public purse.
This article details Nigeria Tax Collection Between 2018 and 2022 Following the latest announcement by the Federal Inland Revenue Service that Nigeria recorded its highest tax revenue collection ever in 2022.
Nigeria Tax Collection Between 2018 and 2022
Here is a summary of how the tax agent has faired regarding Nigeria Tax Collection Between 2018 and 2022.
FIRS: Tax Revenue Generated in 2018
Back in 2018, the Federal Inland Revenue Service (FIRS) generated about ₦5.320 trillion in tax revenue.
According to the FIRS Chairman, Tunde Fowler, while speaking at a retreat on “Parliamentary Support for Effective Taxation of the Digital Economy”, the figure of ₦5.32 trillion recorded for that year surpassed the previous highest-ever figure of ₦5.07 trillion generated in 2012.
The figure at the time was very impressive considering the price of crude oil which was averaging at about $70 per barrel.
A breakdown of the collections indicated that the amount generated from non-oil revenue sources stood at about ₦2.467 trillion while the amount collected from oil revenue sources was about ₦2.85 trillion.
FIRS: Tax Revenue Generated in 2019
As opposed to the great success that the Federal Inland Revenue Service (FIRS) achieved in 2018, 2019 proved to be a more difficult year as the tax body was only able to generate a total sum of about ₦5 trillion.
Compared to its projected revenue collection of about N8.8 trillion, the generated N5 trillion signifies a shortfall of about ₦3.7 trillion for the year.
Out of a total revenue projection of ₦45.7 trillion between 2011 and 2019, the tax body could only generate ₦40.5 trillion, leaving a deficit of over ₦5.2 trillion within the period.
The figures obtained by Africataxreview.com showed that the strength staff of the FIRS had risen from 6,445 in 2011 to 9,448 in 2019 without a corresponding revenue performance.
Consequently, the Executive Chairman, of FIRS, Mr. Muhammad Nami, in a Christmas message to staff, motivated staff to put in more effort, stating that the tax body was able to exceed its revenue target of ₦3.6 trillion in 2012 when it recorded ₦4.6 trillion without the help of consultants and with moderate inflation and exchange rate and they can do it again.
FIRS: Tax Revenue Generated in 2020
Despite the depleting effects of COVID-19 on the Nigerian economy in 2020, the Federal Inland Revenue Service (FIRS) was able to generate ₦4.9 trillion as tax revenue.
According to Abdullahi Ahmad, FIRS’ director of communications, this depicted about 98% of the government’s tax target of ₦5.1 trillion which was set for the tax body.
Ahmad pointed out that besides the effect of the COVID-19 lockdown, other factors that impeded the FIRS’ ability to achieve optimally included the all-time low price of crude oil in the international market, and business interruptions and lootings during the #EndSARS protests.
According to Mr. Nami, the oil sector, which contributed over 50% in tax returns through the Petroleum Profits Tax in previous years, was only able to contribute 30.6% of the tax revenue generated in 2020.
The non-oil revenue on the other hand was 109% in 2020, which indicated a 9% increase compared to the previous year.
FIRS: Tax Revenue Generated in 2021
Still detailing Nigeria Tax Collection Between 2018 and 2022, despite the lingering effects of the Coronavirus pandemic on the economy after 2020, the Federal Inland Revenue Service (FIRS) in 2021 was proud to report that it achieved over a 100% of its collection target for the year.
According to the Executive Chairman, Muhammad Nami in the FIRS 2021 Performance Update signed by him, the tax agent exceeded its expected tax income collection.
A report shared by the FIRS indicates that the tax body generated an amount of ₦2.008 trillion (31.36%) in oil and ₦4.396 trillion (68.64%) in non-oil.
This comes to a total of ₦6.405 trillion as against a target of ₦6.401 trillion.
A further breakdown showed that Companies Income Tax (CIT) amounted to ₦1.896 trillion; Petroleum Profits Tax (PPT) amounted to ₦2 trillion; Value Added Tax (VAT) amounted to ₦2.07 trillion; Electronic Money Transfer Levy amounted to ₦114 billion; Earmarked Taxes amounted to ₦208.8 billion; among others.
FIRS: Tax Revenue Generated in 2022
For the year 2022, the Federal Inland Revenue Service (FIRS) broke its previously set record by generating over ₦10 trillion as tax revenue for the year.
According to the special assistant on media and communication to the chairman of FIRS, Johannes Oluwatobi Wojuola, the agency was able to accomplish over 96% of its collection target for the year 2022 and this figure is the highest tax collection ever recorded in the agency’s history.
A breakdown of the total collection in the year 2022 according to Wojuola indicates that non-oil contributed N5.96 trillion which was 59%, while oil tax contributed N4.09 trillion which was 41%.
This comes to a total of ₦10.1 trillion as against a target of ₦10.44 trillion. It was noted that the figure is exclusive of tax relinquished as a result of different tax incentives granted under the respective laws, which amounted to ₦1.8 trillion.
He continued that Companies’ Income Tax (CIT) contributed ₦2.83 trillion, Value-Added Tax (VAT) ₦2.51 trillion, electronic money transfer levy ₦125.67 billion, and earmarked taxes ₦353.69 billion.
Referring to the FIRS 2022 performance update report, the Chairman mentioned that a sum of ₦146.27 billion is part of the total revenue figure, explaining that the amount is the total value of certificates issued by the service to private investors and NNPC under the road infrastructure development refurbishment investment tax credit scheme, created by executive order No. 007 of 2019.
Even though the Federal Inland Revenue Service (FIRS) has had its ups and downs regarding tax revenue generation from 2018 to 2022, it is safe to say that its efforts are commendable, as they are starting to bear great fruits.
There you have it, a summary of Nigeria Tax Collection Between 2018 and 2022
Hopefully, 2023 would be an even better year for the tax agent.
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