Nigeria’s tax receipts in 2021 rose by 29.4% to 6.41 trillion naira ($15.5 billion), the head of Federal Inland Revenue Service (FIRS), Muhammad Nami, said on Thursday.
Nigeria’s government has repeatedly said it wants to boost non-oil revenues since oil sales make up 90% of foreign exchange receipts. But raising more money from taxes has proved difficult in a country where so many small business are not registered.
It plans to prioritise tax collection from its digital economy in 2022 and focus on non-resident firms with significant economic presence that generate turnover in the country.
The deployment of the new automated tax administration system in June 2021 was a game-changer,” Nami said in a report.
Tax receipts dropped to 4.95 trillion naira in 2020 after a COVID-19 induced lockdown impacted businesses and a recession that year hurt economy. The FIRS collected 5.27 trillion naira in 2019, it said.
The World Bank said last year that Nigeria needed to boost non-oil taxes to at least 12.75% of gross domestic product to boost growth. It said tax collection sits at around 4.5% of GDP, one of the lowest rates in the world.
The FIRS said non-oil sector contributed 69% to total taxes in 2021, as much as in 2020 and up from 60% in 2019.
($1 = 414.90 naira)
