The Federal Inland Revenue Service (FIRS) has failed to reach the approved target for the 2024 budget of N9.96 trillion, with a monthly average of N829.97 billion from oil taxes.
Based on the approved 2024 budget, FIRS is meant to have collected N3.32 trillion in oil taxes between January and April this year but the agency is farther from this goal by N1.69 trillion, an amount more than what it collected.
The FIRS recorded a total of N1.63 trillion as tax revenue from the oil sector between January and April 2024, which is 49% of the approved goal.
Lower than the approved budgetary goal, the FIRS has an internal goal of N7.5 trillion for the entire year, with a monthly average of N625 billion.
This means that the agency should have an internal four-month tax revenue goal of N2.5 trillion. However, it only recorded about 65% of its four-month goal.
The amount is also 22% of the N7.5 trillion that the agency plans to collect this year, as it sets its sights on a significant revenue boost from the oil sector in 2024.
Source: FIRS
The total figure raised so far this year is slightly higher than the N1.19 trillion collected within the same period last year.
The data for the amount raised this year is based on figures presented by FIRS officials at the monthly meetings of the Federal Accounts Allocation Committee (FAAC).
Nigeria’s oil sector has been bedevilled by several challenges, such as pipeline vandalism, illegal oil bunkering and theft. Also, the majority of Nigeria’s oil pipeline infrastructure was constructed around 70 years ago, and is outdated.
Due to the challenges in the oil sector, the Federal Government hardly made up to 70% of its target revenue from this sector in the past two years.
In 2022, the Federal Government generated only 35.4% of its targeted oil revenue, earning N776.35 billion out of N2.19 trillion.
There was some improvement in 2023, as FIRS collected about 60% of its targeted oil revenue in 2023, getting N3.17 trillion out of N5.26 trillion last year.
Aside from the government’s revenue taking a hit, oil firms, who have been struggling in the sector, have chosen to exit the market. They include TotalEnergies, Shell, ExxonMobil and Norway’s Equino.
TotalEnergies’ CEO, Patrick Pouyanne, stated that the company chose to invest $6 billion in Angola over Nigeria due to policy inconsistencies and other issues in the country.
