November 18, 2024

Rising taxes and oil revenues by the Federal Government have boosted its earnings by 76 per cent, from N7.1 trillion in 2022 to N12.5 trillion in 2023.

According to Channels Television report, the newly released 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy Paper, obtained from the Ministry of Budget and Economic Planning, revealed this development.

According to the budget office, while total revenue was up by 76 per cent, oil revenue rose by a whopping 200 per cent from N0.8 trillion in 2022 to N2.4 trillion in 2023, contributing 19.2% to total revenue.

The remarkable increase in oil revenue is attributed largely to higher crude oil production, which increased from an average of 1.31mbpd in 2022 to 1.41mbpd in 2023.

Non-oil revenue increased by 57.8% from N6.4 trillion in 2022 to N10.1 trillion in 2023, contributing 80.8% to the total revenue.

In 2023, the actual gross oil and gas revenue was N7.87 trillion, compared to N9.38 trillion projected, representing an 83.9% performance.

After accounting for deductions, the net oil and gas revenue which accrued to the Federation Account was N4.93 trillion. This is N306.0 billion, about 6.6% above the target.

Non-oil revenue outperformed the budget both at gross and net levels.

The projection for gross non-oil taxes was N7.53 trillion, but N9.89 trillion was collected, representing a performance of 31.2% over the budget.

Corporate Income Tax (CIT) and Value-added Tax (VAT) collections were N4.27 trillion and N3.64 trillion, representing 103.9% and 23.2% performances above the target, respectively. Customs collection was N1.98 trillion, which is 79.6% of the target.

FG’s revenue showed significant performance over the budget.

While the budget provision was N11.05 trillion in 2023, the actual revenue was N12.84 trillion, representing % over the budget.

Of this actual revenue, oil revenue was N2.38 trillion (6.6% over the target), while non-oil tax revenue was N3.31 trillion (34.3% above the target).

The contributions of CIT and VAT to FGN non-oil tax revenue were N1.92 trillion and N476.11 billion, respectively, representing 106.1% and 24.3% higher than the Budget.

N781.80 billion was collected as import duties, excise, and fees, while N107.47 billion was from Special Levies bringing the total collections by the Nigerian Customs Service to N889.27 billion. FG’s share of the Electronic Money Transfer Levy was N23.65 billion.

Other revenues collected include independent revenues of N1.84 trillion, a draw-down of N159 billion from Special Accounts, a Signature bonus of N256.99 billion, and an Education Tax of N719.44 billion. N2.19 trillion accrued as Government Owned Enterprises (GOEs) retained revenue, while Grants/Aid was N1.57 trillion.

Special Accounts, a Signature bonus of N256.99 billion, and an Education Tax of N719.44 billion. N2.19 trillion accrued as Government Owned Enterprises (GOEs) retained revenue, while Grants/Aid was N1.57 trillion.

The budget office said “The expectation is for increased and sustainable revenue streams as the positive effects of the diverse reforms begin to yield the desired results.

“The government will therefore be able to meet its fiscal obligations and implement programmes and projects articulated in the Renewed Hope Agenda of the current Administration.

“While the increase in the non-oil revenue raises the tax-GDP ratio, Nigeria still ranks low when compared with nations with similar economic potentials.

“This narrative could possibly change with the full implementation of the recommendations of the Presidential tax reform committee.

“The progress being recorded in the tax system is already being noticed, with the 2023 Tax Transparency in Africa Report highlighting that Nigeria is making progress in the development of its Exchange of Information (EOI) strategy, aimed at curbing tax evasion through transparency among the 33 member countries.”