Africa’s largest economy’s tax revenue as a proportion of gross domestic product is almost double previous estimates after authorities overhauled the way they calculate the data.
(Bloomberg) — Africa’s largest economy’s tax revenue as a proportion of gross domestic product is almost double previous estimates after authorities overhauled the way they calculate the data.
Nigeria’s tax revenue as a share of GDP was 10.9% in 2021, compared with 6% previously reported, the statistics agency said in a statement on Wednesday. That’s the highest level in seven years.
The statistics office, the Finance Ministry and the Federal Inland Revenue Service collaborated on the revamp that now includes revenue collected by other government agencies that were previously excluded, Muhammad Nami, chairman of the tax authority, said in a separate statement on Twitter. This “was peculiar to Nigeria as most other countries operate harmonized tax system with single-point tax revenue reporting,” he said.
The revised computation also takes into account wider coverage of data at the federal, state, and local government levels, the statistics office said. The new figures “reflect better data sources and improved estimation using the Organisation for Economic Co-operation and Development manual,” the agency said.
Still, the tax-to-GDP ratio is well below the 34.1% average from members of the OECD, complicating government efforts to rein in debt and fund infrastructure, education and health projects.
Non-oil revenue made up 88.6% of Nigeria’s tax revenue of 18.9 trillion naira ($40.5 billion) in 2021 and oil the rest. Theft, pipeline vandalism and declining investments have reduced its contribution in Africa’s largest oil producer.
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