Revenue: FG targets 25% Revenue to GDP in 2024 

...insists focus is now on domestic revenue mobilisation  ….tasks FIRS on 18% tax to GDP ratio in three years

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The The Federal Government says it’s target is to achieve a 25 percent revenue to gross domestic product  (GDP) ratio in the 2024 fiscal year.

Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun who stated this on Wednesday while declaring open the 2024 strategic management retreat of the Federal Inland Revenue Service  ( FIRS), holding in Abuja, said given what is happening around the world, the high and sustained increase in  interest rates, borrowing is not the way to go.

He said emphasis is on domestic resource mobilisation and equity as opposed to debt.

The theme of the retreat is ‘Re-imagining Tax Administration for Equity and Economic Growth.

The minister said there is a plan under the fiscal policy and tax reform committee to increase the total raw revenue, which is tax revenue plus the revenue that is earned from government owned enterprises to about 25 percent of GDP from its current level of about 15 percent.

According to the Minister, “We have resolved not to focus on expensive debts, but on domestic resource mobilization. That is why the 2024 budget anticipates a 77 percent increase in Internally generated revenue of the Federal Government and what needs to be done now is for those government owned enterprises to accept the challenge to live within the regulations of Fiscal Responsibility Act.”

While tasking the FIRS to achieve a higher tax to GDP ratio, the Minister said, “Our tax to GDP was previously very low, lower than 10 percent,  other African countries were doing much higher, we expect that working with the tax reform committee you will be able to move our tax to GDP Ratio to 18 percent in the next couple of years. I hope that you will be able to surpass that figure.”

Speaking on borrowing from the World Bank,  Mr. Edu said, “Taking a World Bank loan is about wanting to get our own share as a member of the World Bank group, our own share of concessionary financing, International Development Association financing, which is virtually free money of 1 percent or 2 percent for 40 years.

“It is given as a seal of approval for the policies of the government of the day. That is why in seeking to process a $1.5 billion financing from the World Bank, we are looking for free money that is going to be given not for a specific project, in agriculture,  education or in health, it is money that come straight to balance of payment for the government to spend as it sees fit in any given area of the economy.

“When you get that, it is a signal to the rest of the world that what you are doing is on the right track and is to be supported by the International community.”

Also speaking, the Accountant-General of the Federation,  Dr. Oluwatoyin Madein, commended the efforts of FIRS in increasing government revenue.

She said it is worthy of note that currently,  the FIRS contributes 70 percent of the total Federation revenue.

While pledging to support the service to help it achieve higher results, she charged the management and staff to remain committed to the discharge of their duties.

In his welcome address, the Executive Chairman of FIRS,  Dr. Zacch Adedeji, said one of the aims of the retreat was to unveil the new FIRS organizational structure, which he described as a critical milestone in the Service’s commitment to revolutionize tax administration in Nigeria.

He said the cornerstone of this paradigm shift is the establishment of a customer-centric organizational structure designed to streamline processes and enhance efficiency in tax operations.

“We are not merely adapting to change; we are leading it,” Adedeji said. “The forthcoming structure, set to kick off from February 2024, embodies our dedication to modernize and digitize the tax administration landscape in Nigeria.

“In our pursuit for a more efficient and contemporary tax administration methodology, we are embracing an integrated tax approach, leveraging technology at every step. This approach positions FIRS at the forefront of innovation, ensuring that we meet the evolving needs of our taxpayers in a rapidly changing world.

“The structure advocates for a comprehensive approach to taxpayer services, consolidating our core functions and support under one umbrella. By tailoring our services to specific taxpayer segments, we aim to simplify the taxpayer experience. No more complexities, no more overlaps—just a seamless and user-friendly interaction for every taxpayer.”

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