Nigeria expects to significantly boost revenue collections this year as plans to overhaul its tax system start to pay dividends.
The Federal Inland Revenue Service forecasts revenue to increase 57% in 2024 to 19.4 trillion naira ($20.3 billion), compared with last year, according to a document seen by Bloomberg. That will comprise 9.96 trillion naira in tax revenue from oil and 9.45 trillion naira of non-oil revenue, according to the document.
To grow revenue this year, the agency will improve efficiency and tax compliance, including changing its organizational structure to be more taxpayer focused and further automate tax collection, according to the document. The agency will also “carry out internal reallocation from oil to non-oil, given that the budget oil revenue for 2024 was increased by 214% compared to 2023 actual, while non-oil was increased by only 3%,” it said.
Those measures will add to others aimed at boosting revenue such as shifting more of the burden to wealthy citizens while cutting corporate taxes and introducing electronic invoicing of value added tax.
President Bola Tinubu’s government is targeting revenue to help fund an ambitious reform program focused on accelerating growth in Africa’s most populous nation and lifting 100 million people out of poverty. A low tax take has forced the government to rely significantly on borrowing to meet its public spending needs, complicating efforts to rein in debt and fund infrastructure, education and health projects.