Revenue drought hitherto experienced under ex-President Muhammadu Buhari may gradually be receding following the increased tax collection recorded in June by the Federal Inland Revenue Service (FIRS) which shows an improvement in the country’s earnings.
FIRS earned N5.5 trillion in the first six months of the year of which N1.65 trillion was collected in June alone, the highest tax revenue ever collected by the Service in a single month.
Non-oil tax revenue exceeded projection for the first half of the year by N780 billion, climbing to N3.76 trillion of the total N5.5 trillion pooled by the Federal Inland Revenue Service (FIRS) for the period.
For the period also, the agency missed its expectation of oil tax revenue, falling short of the projection by N260 billion. FIRS projected N2.3 trillion but oil tax accrual was N2.03 trillion.
Muhammad Nami, Executive Chairman of the FIRS said the N5.5 trillion for the half-year was the highest tax revenue collection ever recorded in any first six months of a fiscal year.
Nami in his 2023-2024 tax revenue outlook presentation to the National Economic Council at its meeting held on Thursday at the Presidential Villa, Abuja, stated, “Tax revenue from the oil sector from January to June 2023, stood at N2.03 trillion, as against a target of N2.3 trillion; while non-oil tax collection stood at N3.76 trillion, as against a target of N2.98 trillion”.
The presentation, which contained FIRS’ 2023 Half-Year Collection Report, showed that the FIRS achieved over 100 per cent of its target for the first half of the year when compared with a mid-year target of N5.3 trillion.
Speaking to what he described as “a good head start, despite stubborn headwinds,” Muhammad Nami, attributed the excellent performance to improved voluntary tax compliance enabled by the automation of FIRS’ tax administrative processes.
“This is a good head start as we work towards meeting our target for the year. And it was achieved despite stubborn headwinds such as the impact of the currency redesign and 2023 General Elections on the economy in the first and second quarters of 2023”, said Nami.
“This half-year performance was achieved as a result of improved voluntary tax compliance by taxpayers, the continued improvement of automation of our tax administration processes, including the updated VAT filing processes; as well as our dogged engagement with stakeholders in both the formal and informal sectors of the economy.”, he concluded.
Commenting on the outlook for the remainder half of the year, the FIRS Executive Chairman gave assurances that the country should expect “better days ahead” in terms of tax revenue collection.
“We believe that the performance in the second half of the year would be better considering the continuing improvement to our tax administration processes and the positive impact of the current government’s policies on the economy,” said the Executive Chairman.
It would be recalled that the Service achieved a total collection of N10.1 trillion in the year 2022, being the highest tax collection ever made by the FIRS in a single year.
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