Nigeria targets N19.4 trillion in tax revenue for 2024

Business a.m

The Federal Government of Nigeria has set a tax revenue target of N19.4 trillion naira for the year 2024, following the  record N12.37 trillion naira in tax revenue by the The Federal Inland Revenue Service (FIRS) in 2023, which surpassed the original target of N10.7 trillion naira. 

In a speech at the Federal Inland Revenue Service’s (FIRS) 2024 Strategic Management Retreat in Abuja,Wale Edun, minister of finance and coordinating minister of the economy outlined the government’s fiscal strategy for the coming year. Edun stated that the government plans to reduce its reliance on expensive debts by boosting tax revenue.

“We are projecting a 77 per cent  increase in IGR. Our revenue as a percentage of Gross Domestic Product (GDP) is low at below 10 per cent.It should be much higher. Government needs to spend so much on infrastructure and social services. The idea is to shift from expensive debts to domestic revenue mobilisation,” he stated.

Edun noted that the federal government has been generating over 1 trillion naira in revenue every month since fuel subsidies were removed. This represents a significant increase in revenue, and Edun stated that a 77 percent increase in revenue targets would imply that the government is aiming to generate 1.77 trillion naira every month. 

The minister stressed the need for an increase in tax revenue to enable the government to discharge its responsibilities to the citizenry.

Edun commended  the FIRS for putting up a strategy for increasing tax revenue. He however pointed out that  tax revenue in Nigeria is still low, noting that collection level should be much higher as we have seen in other African countries not to talk of the developed countries.

“What the chairman and his team have done is build on already-established performance. In 2023, FIRS met his 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 finalise plans to substantially increase internally generated revenue,” he added.

Meanwhile, Zacch Adedeji, chairman of the Federal Inland Revenue Service, expressed confidence that the N19.4 trillion naira tax revenue target for 2024 is achievable. He cited the effective tax collection system and a favorable economic environment as key drivers of tax revenue growth.

Adedeji commented on the government’s 2024 tax revenue target,saying,  “What determines whatever we have comes from micro-economic indices because when the economy runs well, we are going to be taxing prosperity, not poverty.

We will focus on the fruits and not the seeds. We need to ensure we have that viable economic environment that will lead to economic prosperity. And for us at FIRS, it is just to put the system in place to aid effective collection.”