FIRS Revenue at N10trn in 2022 Dipped by 24% In Dollar Translation

Nigeria’s Federal Inland Revenue Service (FIRS) stated that it collected N10.1trn in tax revenues in 2022, the highest tax collected in its history. While the Service seems to have broken its record, analysts say the revenue is not as impressive as it seems in dollar terms. In 2012, the FIRS raked in N5.01trn in tax revenue, translating to US$31.54m using the average exchange rate in the year. Ten years after, the Service collected a cumulative N10.1trn but down in dollar term to US$23.84m. FIRS revenue increased by 102% in naira between 2012 and 2022 but dipped by -24% within the same period in dollar-denominated value. Analysts say despite the overvalued nature of the country’s official exchange rate, tax revenue has lost its value. Aside from the loss in the value of the tax revenue, analysts had also raised concerns that the total revenue earned as of November 2022 was N6.5trn while FIRS reported tax revenue of N10.1trn, implying that close to half of the tax revenue collected by the FIRS was retained, a figure that is inefficient for a revenue collection agency (see chart 1 below).