Nigeria's tax revenue rises 17% in H1’23

Nigeria's revenue from Value Added Tax (VAT) and Company Income Tax (CIT) saw a significant increase of 17 percent Year-on-Year to 3.5 trillion naira in the first half of 2023. This surge in tax revenue comes as the Nigerian government hints at plans to review the tax waivers given to companies operating in the country. The rise in tax revenue is a positive sign for Nigeria's economy, reflecting an improvement in compliance and economic activities within the country. The government's commitment to enhancing tax collection and closing loopholes in the tax system is evident in its decision to reevaluate the existing tax incentives. Michael Ango, a Partner at Andersen Nigeria specializing in Tax Advisory and Regulatory Services, shared insights on the implications and potential outcomes of the government's plan during an interview with CNBC Africa. Ango emphasized the importance of striking a balance between encouraging investment through tax incentives and ensuring that companies fulfill their tax obligations. By reconsidering the tax waivers, the government aims to create a fair and equitable tax system that benefits both businesses and the overall economy. One of the key points discussed in the interview was the impact of the tax revenue increase on government spending and public services. The additional revenue generated could potentially bolster infrastructure development, healthcare, education, and other essential services for Nigerian citizens. This positive ripple effect underscores the significance of efficient tax collection and enforcement. Another focal point of the discussion was the potential reaction from companies operating in Nigeria to the review of tax waivers. While some businesses may express concerns about the reduction or elimination of tax incentives, others might recognize the long-term benefits of a more sustainable tax regime. Nonetheless, it is essential for the government to engage with stakeholders and communicate transparently throughout the review process to mitigate uncertainties. Moreover, the interview shed light on the need for continuous tax reforms and improvements in the Nigerian tax system. Enhancing transparency, reducing tax evasion, and streamlining tax processes are crucial steps towards optimizing revenue collection and fostering economic growth. Ango highlighted the importance of collaboration between the public and private sectors to drive sustainable tax practices and ensure mutual prosperity. In conclusion, Nigeria's 17 percent increase in tax revenue in the first half of 2023 signals a positive trajectory for the country's fiscal health. As the government prepares to reassess tax waivers granted to companies, the focus remains on promoting tax compliance, stimulating economic development, and strengthening the overall business environment. By fostering a conducive tax ecosystem, Nigeria aims to achieve sustainable revenue generation and inclusive growth in the years to come.