News
Facelift tyo Nigeria As Tax-to-GDP Ratio Increases to 10.86 Percent
By Kelechi Okoronkwo
For a long time, more than twelve years, Nigeria wore a “Lowest Tax-to-GDP (Gross Domestic Product) Ratio” in the whole world like a garment. In tax and economy conferences and public discussions both local and internal, Nigeria’s tax-to-GDP status was always on the front-burner.
While some people showed genuine concern, others scorned Nigeria for having a Tax-to-GDP ratio quoted as hovering around five to six percent.
Earlier in May, 2023, the Chartered Institute of Taxation of Nigeria (CITN) expressed genuine worry about Nigeria’s tax system and the Tax-to-GDP ratio.
The CITN was not alone in expressing concerns on the presumed low and static ratio. And it was worth showing concerns for. The implication of this statistic was that despite enormous effort at reforming Nigeria’s tax system, the system was not getting any better in terms of tax revenue contribution to the GDP.
It also meant that Nigerians and Nigerian taxpayers are not tax compliant; and that tax authorities in Nigeria are not upping their game on getting the taxpayers to comply. More: it also meant that the people may have lost confidence in the Government, hence their refusal to pay their taxes. But little did we know that Nigeria’s tax system is not performing as badly as we had thought.
Recently, in his effort to measure the progress which the Federal Inland Revenue Service (FIRS) has made in terms of institutional reforms and its impact on tax revenue collection and contribution to the GDP, the Executive Chairman of FIRS, Muhammad Nami, initiated a review of the record on Nigeria’s tax-to-GDP. This review was carried out in collaboration with the Nigerian Bureau of Statistics (NBS) and the Federal Ministry of Finance using data from 2010 to 2021. Upon conclusion of the review, the NBS on May 25, 2023 communicated to the FIRS that Nigeria’s tax-to-GDP as at December 2021 was 10.86 percent.
The revision took into account revenue items hitherto not previously included in the computations; particularly, relevant revenue collected by other agencies of government.
Tax-to-GDP ratio is a measure of a nation’s tax revenue relative to the size of her economy as measured by Gross Domestic Product (GDP). The ratio is a useful tool for assessing the “health” of a country’s tax system, and highlighting its tax potentials relative to the size of the economy. It is the ultimate measure of the effectiveness of a nation’s tax system compared to other countries.
In a statement announcing the new Tax-to-GDP ratio, the Executive Chairman of FIRS, Mr. Muhammad Nami, explained that sources which previously put the country’s Tax-to-GDP ratio at between 5% and 6% did not consider tax revenue accruing to other government agencies in their computation. Particularly, revenues collected by agencies other than the FIRS, Customs and States Internal Revenue Service were excluded. This situation was peculiar to Nigeria as most other countries operate harmonised tax system (all or most tax revenues are collected by one agency of government) with single-point tax revenue reporting. As such, all relevant tax revenues are included in the computation of the Tax-to-GDP ratio.
“In order to correctly state the Tax-to-GDP ratio, the FIRS initiated a review and re-computation of the ratio for 2010 to 2021. In recomputing the ratio, key indicators that were previously left out were taken into account. This resulted into a revised Tax-to-GDP ratio of 10.86% for 2021 as against 6% hitherto reported,” the statement noted.
Mr. Nami further noted that Nigeria’s Tax-to-GDP ratio should ordinarily be higher than 10.86% but for certain economic and fiscal policy factors, including tax waivers and leakages occasioned by the country’s fragmented tax system.
“It is important to note that the Tax-to-GDP ratio for Nigeria should be higher, but for the impact of tax waivers contained in our various tax laws (including exemptions to Micro, Small and Medium Enterprises brought-in by Finance Act, 2019), low tax morale, leakages occasioned by the country’s fragmented tax system and the impact of the rebasing of the GDP in 2014”, he explained.
The FIRS boss implored the government to consider reviewing its policies on tax waivers thereby guarantying increased revenue to prosecute its programmes and positively move the needle of the country’s tax-to-GDP ratio.
The Statistician-General of the Federation, Prince Adeyemi Adeniran, in his letter to the Executive Chairman of FIRS, described the revision as a facelift to the Tax-to-GDP ratio for Nigeria in comparison with other countries.
He further noted that the NBS had “carefully and diligently reviewed the methodology used for computing the revised estimates, as well as the various items that have been included in the new computation,” and that the NBS as an outcome of its review and meetings with FIRS has adopted the new Tax-to-GDP computation.
For Nigeria, and particularly the FIRS, the new tax-to-GDP ratio is both a confirmation and exoneration. It is a confirmation of the efforts made by Governments over the years to reposition Nigeria’s tax system. It also a confirmation of the effort being made currently by the Management of the Service to make Nigeria’s tax system stronger. The new tax-to-GDP ratio is a confirmation of the optimism often expressed by Nami, that Nigeria’s tax system can become the best in Africa and the world by continuous and conscientious application of moral and professional tenets in the administration of taxes in Nigeria.
Kelechi Okoronkwo is an author, and tax practitioner.
By Tambaya Julius, Abuja
In an atmosphere filled with joy, unity, and heartfelt wishes, Jaba Local Government came alive as Honourable Mustapha and Sister Fatima celebrated their union today in a wedding that will be remembered forever.
The occasion was graced by esteemed personalities and dignitaries and prominent figures within and outside Kaduna State, who gathered not only to honour the couple but also to offer guidance, blessings, and sincere prayers for a successful marriage.
Speaking through the Jaba LGA Council Speaker, Hon. Dogo Zachariah, the Executive Chairperson of Jaba Local Government, Hon. Laria Sylvia Ishaku, expressed her deepest gratitude for being part of such a meaningful and memorable celebration.
Hon. Laria congratulated the newlyweds couple and encouraged them to embrace unity, love, and mutual respect in their marriage. She urged the couple to always see themselves as one and remain committed to understanding each other no matter the challenges they may encounter.
Hon. Laria warned the couple against allowing external influences or rumours to interfere in their relationship. “As a married couple, it’s crucial to cultivate trust and open communication,” Hon. Laria advised. “Never allow outsiders to sow discord or bring confusion into your home.”
She further appealed to the general public to avoid meddling in private marital affairs, reminding them that interfering negatively can damage the foundation of any union.
During the event, Professor Yasuf Joe Gandu, Dean of the Faculty of Environmental Sciences at Bingham University, Nasarawa State, also shared his thoughts. Prof. Gandu encouraged the couple to remain patient, tolerant, and supportive of one another. “You’ll never find a perfect husband or a perfect wife,” he said. “But through patience, love, and mutual understanding, couples can build a strong, everlasting relationship.”
The ceremony was further enriched with royal blessings, delivered on behalf of the Kpop Ham, HRH. Danladi Gyet Maude, through the District Head of Fada, His Royal Highness M.D Shehu, also known as the Tafidan Jaba.
HRH. Shehu extended his heartfelt prayers and blessings to Hon. Mustapha and Sister Fatima, wishing them a life filled with peace, love, and unity. He urged them to always strive for harmony and be each other’s support system through all phases of life.
The Royal Father also prayed for safe journey for all attendees, blessing them with journey mercies as they returned to their homes.
Lastly the newlyweds couple, Hon. Mustapha and Sister Fatima filled with emotion and gratitude, expressed their appreciation to everyone who had supported them during their journey to marriage. Surrounded by smiling faces and heartfelt wishes, Hon. Mustapha addressed the gathering with humility and thankfulness.
“We are truly blessed to have so many loved ones standing with us today,” he said. “Your prayers, love, and sacrifices mean the world to us. To those who travelled long distances, may your journey back be safe and peaceful.”
Sister Fatima, radiating grace and joy, echoed with heartfelt thanks to the families, friends, and well-wishers who made the day so special.
In a touching moment, the couple, Hon. Mustapha and Sister Fatima directed particular appreciation toward Hon. Laria Sylvia Ishaku for her extraordinary support and genuine kindness throughout their weeding preparations and on the wedding day itself. “Words cannot fully express our gratitude,” Hon. Mustapha said.
“May God reward you abundantly for your generosity, warmth, and encouragement. Your presence, support and prayers have added great meaning to our union, thank you so much Hon. Laria Sylvia Ishaku.”Hon. Mustapha added.
Seriake Dickson, senator representing Bayelsa west, says Ijaw Nation is not at war with the federal government or President Bola Tinubu.
Dickson spoke on Saturday after his visit to Siminalaye Fubara, suspended governor of Rivers, at his residence in Port Harcourt on Friday.
The lawmaker pleaded with Tinubu to prevail on Nyesom Wike, minister of FCT, and Fubara to find a common ground for a quick resolution of their dispute.
“On the part of the President, I would like to state that the Ijaw nation is not at war with the federal government or with the President,and we are looking up to him as the leader of the nation to lead in the resolution of the issues and restore normalcy and democratic rule,” the statement reads.
“I call on all leaders from the Niger Delta both at the state and national level to play an active part in the resolution of this issue.”
He noted that the Niger Deltans and Ijaw Nation have always seen the president as a partner and not a foe irrespective of party differences.
Dickson also appealed with Ibok-Ete Ibas, the sole administrator of Rivers, to refrain from actions that do not build confidence or aid the quick resolution of the crisis in the state.
He thanked the people of Rivers and security personnel for maintaining peace and order in the midst of such “rare political development”.
“In this regard, I want to appeal to all our people, the youths of Rivers state, and in particular the youths of Ijaw nation, in Rivers state and across the Niger Delta, from Arugbo in Ondo state, to Ibeno in Akwa Ibom state, to continue to be peaceful and resist any provocation or incitement to violence,” he added.
“They should refrain from violence and destructive tendencies, particularly the destruction and vandalization of strategic oil and gas infrastructure in the region, which has the tendency to cause further pollution-damage to our already compromised environment.
“I also urge the sole administrator, who himself is a highly decorated and respected military veteran from the Niger Delta region, to refrain from actions that do not build confidence and aid the quick and amicable resolution of the crisis.”
Dickson has been vocal about his stance on the emergency rule in Rivers. He staged a walkout from the upper legislative chamber prior to its approval by the senate.
The United Nations Office for the Coordination of Humanitarian Affairs has listed Nigeria and nine other countries as countries to be affected as it will cut 20% of its staff due to a shortfall of $58 million.
The U.N. aid chief Tom Fletcher revealed this as he briefed staff after OCHA’s largest donor – the United States – cut funding.
“OCHA currently has a workforce of around 2,600 staff in over 60 countries. The funding shortfall means we are looking to regroup to an organization of around 2,100 staff in fewer locations,” Fletcher wrote in a note to staff on Thursday, as reported by Reuters.
OCHA works to mobilise aid, share information, support aid efforts, and advocate for those in need during a crisis. It relies heavily on voluntary contributions.
“The U.S. alone has been the largest humanitarian donor for decades, and the biggest contributor to OCHA’s programme budget,” Fletcher said, noting that its annual contribution of $63 million would have accounted for 20% of OCHA’s extrabudgetary resources in 2025.
Since returning to office in January for a second term, U.S. President Donald Trump’s administration has slashed billions of dollars in foreign assistance in a review that aimed to ensure programs align with his “America First” foreign policy.
Fletcher said OCHA would “focus more of our resources in the countries where we work,” but would work in fewer places.
“OCHA will scale back our presence and operations in Cameroon, Colombia, Eritrea, Iraq, Libya, Nigeria, Pakistan, Gaziantep (in Turkey) and Zimbabwe,” Fletcher said.
“As we all know, these exercises are driven by funding cuts announced by Member States and not by a reduction of needs,” he said. “Humanitarian needs are on the rise and have perhaps never been higher, driven by conflicts, climate crises, disease, and the lack of respect of international humanitarian law.”
U.N. Secretary-General Antonio Guterres last month announced a new initiative to improve efficiency and cut costs as the world body turns 80 this year amid a cash crisis.