By Adedapo Adesanya
The Minister of Finance and the Coordinating Minister of the Nigerian Economy, Mr Wale Edun has called for increased tax revenue to enable the government to discharge its responsibilities to the citizenry.
He made this call at the opening of a two-day strategic management retreat of the Federal Inland Revenue Service (FIRS) held at the Congress Hall, Transcorp Hilton Hotel, Abuja, on Wednesday.
He lauded the FIRS team led by its chairman, Mr Zacch Adedeji, for surpassing the set target of N11 trillion for last year and tasked him with higher tax revenue in line with global trends.
The FIRS hit a record N12.4 trillion in 2023 in revenue collection, despite a low tax collection environment. The country is targeting over N19 trillion in 2024 following some efforts to boost the tax base of the country.
The finance minister said, “Tax revenue in Nigeria is low. The collection level should be much higher as we have seen in other African countries not to mention the developed countries. It is at 10 per cent of the Gross Domestic Product (GDP) when at the highest level, it goes around 55 per cent.”
“What the chairman and his team have done is build on already-established performance. In 2023, FIRS met its financial target and even surpassed it. But they need to do more.
“And that is what the chairman and his team will be discussing for the two days to make sure they finalize plans to substantially increase internally generated revenue,” Mr Edun emphasised.
The federal government last year set a target of a tax-to-GDP ratio of 18 per cent within the next three years.
Nigeria currently has a tax-to-GDP of 10.8 per cent and President Bola Tinubu has vowed to boost this above African peers like Cote d’Ivoire, Cameroon, and Senegal among others, who have between 15 per cent and 16 per cent.
To expand the country’s tax base, the federal government is also looking to streamline multiple taxes in the informal sector and tackle unorthodox methods of collection.
There are currently over 60 taxes, levies, and charges across the three levels of government with state and local governments administering 46 taxes and levies, including road taxes, motor park levies, truck, canoe, wheelbarrow, and cart fees among others.
The President inaugurated a tax committee last year that is looking into eliminating unauthorised tax collection from small businesses including petty traders, hawkers, artisans, truckers, cart pushers, okada riders, and other transporters, and incorporating them into the official tax bracket.