• Non-oil tax jumps by 44% to N10.64 trillion
• FG walks tightrope to price range goal regardless of enchancment
• Specialists demand accountability
Efforts to enhance Nigeria’s fiscal place and cut back the focus danger of oil sale dependence could also be getting promising traction as the federal government grew its composite tax income by 43 per cent within the first half (H1) of the yr.
The progress report doc sighted by The Guardian exhibits the federal government posted a complete income influx of N14.27 trillion from January to June, 43 per cent above N9.98 trillion collected in final yr’s comparative interval.
The quantity is about 27 proportion factors increased than the 16.4 per cent baseline progress goal and 57 per cent of the unique focused income for the yr, the doc acknowledged.
Oil tax income, the doc mentioned, was 39.4 per cent up in comparison with N2.6 trillion realised H1 2024. Non-oil tax, which accounted for about three-fourths of the collections, rose by 44.2 per cent to N10.64 trillion.
In H1, 2024, the nation realised N7.37 trillion from non-oil tax. The federal government has insisted that rising its non-oil income is essential to mobilising income for sustainable public sector funding.
If the federal government sustains the H1 pattern, it may shut the yr at an annualised tax income of N28.54 trillion, which might translate to 7.7 per cent of the gross home product (GDP).
The Nationwide Bureau of Statistics (NBS) estimated the rebased 2024 nominal nationwide output at N372.82 trillion.
Regardless of the advance, it continues to be a lengthy stroll to boost the federal authorities’s fairness contribution to this yr’s N55 trillion price range and hold the deficit across the N14 trillion estimate.
The federal government is taking a look at whole income of N40.89 trillion, with N29.87 trillion anticipated to return from its share from the Federation Account Allocation Committee (FAAC) whereas unclassified “different” and impartial income sources are anticipated to make up the remaining N6.02 trillion.
The crucial tax reforms which are anticipated to bolster public income and block leakages in assortment processes won’t be applied till subsequent yr. Moreover, the federal government has missed the chance to lay the authorized framework for accelerated enlargement of the value-added tax (VAT), a serious element of the non-oil income.
Within the meantime, oil manufacturing, at 1.62 million barrels per day (bpd) as on the first quarter, stays far beneath the price range goal. So additionally, is the benchmark worth, which was set at $75 per barrel.
With rising uncertainty at the worldwide market, the federal government solely hopes oil costs don’t commerce far beneath $70 going into the second half of the yr.
Analysts have described the 2025 mid-year income report as a powerful indicator of Nigeria’s fiscal turnaround.
They see it as the end result of a extra strong income framework, higher compliance enforcement, and continued reforms in each the oil and non-oil sectors.
Nevertheless, they emphasised that sustaining this momentum, guaranteeing fiscal transparency, and changing income positive factors into actual financial dividends stay crucial to profiting from the present efficiency.
A professor of economics on the Olabisi Onabanjo College, Sheriffdeen Tella, attributed Nigeria’s spectacular income efficiency within the first half of 2025 to extra environment friendly tax administration and the introduction of latest levies and tariffs on companies.
In response to him, the federal government has demonstrated higher effectiveness in latest months in gathering taxes and different statutory costs, which has considerably boosted public income.
He famous that many large-scale companies and banks have been declaring substantial earnings, thereby contributing extra to authorities coffers by way of company revenue taxes.
Tella defined that the surge in income is the results of each improved compliance and expanded tax obligations throughout varied sectors.
“The federal government has been fairly environment friendly in tax and levy assortment in latest months. As well as, some new taxes, tariffs and costs have been launched on native industries and companies. Many large-scale companies and banks have been making enormous earnings, which give authorities revenue taxes or revenues. All these are answerable for improved revenues,” he mentioned.
Nevertheless, Tella cautioned that whereas the rising income figures are commendable, it was vital to recognise that every one taxes characterize withdrawals from the financial system. He careworn that the actual impression could be measured by how the funds are utilised.
“What’s vital is for the revenues to be spent on welfare-enhancing tasks and programmes,” he acknowledged. He expressed hope that with improved home income mobilisation, the federal government’s dependence on overseas loans would cut back, permitting for extra sustainable financial administration going ahead.
Additionally commenting, a former president of the Chartered Institute of Bankers of Nigeria (CIBN), Dr Uche Olowu, described Nigeria’s rising income profile as a welcome growth with promise for financial stimulation.
In response to him, increased income offers the federal government higher capability to spend money on crucial infrastructure and key sectors able to driving inclusive progress.
He identified that traditionally, one of many main constraints to Nigeria’s financial progress has been its chronically low income base.
“Extra income means the federal government has extra money to spend on infrastructure tasks and core areas that may stimulate financial progress,” Dr. Olowu defined.
He added that the present uptick in income assortment indicators that latest fiscal and tax reforms are starting to yield tangible outcomes, which is encouraging for each policymakers and residents.
Nevertheless, Olowu warned that elevated income “is simply step one” to fiscal restoration. The actual problem, he famous, lies in guaranteeing that these funds are used successfully and transparently in a system nonetheless grappling with entrenched corruption.
“The following hurdle needs to be how you can get actual worth contemplating the excessive stage of corruption bedevilling the system,” he mentioned.
He emphasised the necessity for fiscal self-discipline and good governance to translate the improved income into lasting growth outcomes.
He additionally careworn the necessity for the momentum to be matched with accountability and impact-focused spending.
Crew Lead on the Finance Analysis Division of InvestingPort, Uwem Olubummo, described the income efficiency as a outstanding milestone that displays each fiscal effectivity and potential indicators of financial restoration.
In response to her, the Federal Authorities’s income goal for 2025 was already ambitiously set at 16.4 per cent above the entire income collected in 2024. But, by June 30, 2025, income progress had already reached 43 per cent, practically triple the preliminary benchmark.
“That is fairly vital,” Olubummo mentioned, explaining that the event could also be pointing to a number of constructive undercurrents throughout the financial system.
He famous that such an overperformance may recommend that revenue-generating companies like the Federal Inland Income Service (FIRS) and the Nigeria Customs Service have turn into more practical.
“It might point out that companies are doing a greater job, both by decreasing leakages, increasing the tax web, or implementing compliance extra rigorously,” he mentioned.
Olubummo additional defined that the info may additionally mirror growing financial exercise.
“If individuals and companies are paying extra taxes, it would imply that imports are rising, gross sales are rising, or firms are making extra revenue. That might level to gradual financial restoration or no less than improved confidence within the system.”
She emphasised that this surplus in income assortment opens the door for extra strategic fiscal planning. With extra funds than anticipated coming into the federal government’s coffers, there’s much less stress to borrow and extra alternative to spend money on precedence areas akin to infrastructure, healthcare, and training, supplied the funds are managed responsibly.
Olubummo additionally added that exceeding income expectations can ship a powerful constructive sign to each native and worldwide buyers. “It indicators fiscal self-discipline and resilience, and that would increase investor confidence.”
Nevertheless, she cautioned that the supply of the income issues simply as a lot as the quantity.
“If the surge in income is primarily from aggressive taxation on already struggling companies or arbitrary costs, it may stifle progress in the long term. “But when it’s pushed by real financial enlargement and operational effectivity, then it’s an encouraging signal for the way forward for the Nigerian financial system.
Vice Chairman of Highcap Securities Restricted, David Adonri, described the 43 per cent progress in whole income as ‘a serious fiscal milestone,’ significantly because it considerably outpaces the baseline progress goal of 16.4 per cent.
He famous that the sharp rise in non-oil tax income, up by over 44 per cent factors to the Federal Inland Income Service’s (FIRS) success in deepening the tax web and implementing compliance.
“It exhibits that the federal government is making headway in diversifying the financial system away from oil dependence,” Adonri acknowledged.
He added that elevated non-oil income reduces publicity to exterior shocks akin to oil worth volatility, which has traditionally undermined Nigeria’s fiscal stability.
