Nigeria: VAT revenue reached ₦3.6t in 2023, more than 7x the amount generated in 2013

Nigeria's VAT revenue has grown every year since 2013, reaching ₦3.6 trillion in 2023. The amount collected in 2023 exceeded 2022’s by ₦1.13 trillion — a 45% increase.

Source:

National Bureau of Statistics

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Period:

2013 - 2023

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Nigeria's non-oil tax revenue solidified its dominance over oil in FIRS collections, reaching a record of ₦15.9t in 2024, more than 2.7x the ₦5.8t from oil

FIRS recorded ₦15.9 trillion of non-oil tax, almost three times the ₦5.8 trillion recorded for oil tax.
Non-oil tax revenue made up 73.3% of the total revenue collected in 2023.
From 2012 down to 2024, non-oil tax revenue surpassed oil tax revenue most of the time.
Oil taxes are petroleum profit tax and company income (oil & gas) tax while non-profit tax includes company income (non-oil) tax, gas tax, capital gains, stamp duty, NCS import VAT, and non-import VAT.

Nigeria's FIRS surpassed 2024 target as revenue soared 76% to a record ₦21.7 trillion

The FIRS collected ₦21.7 trillion, outpacing the target of ₦19.4 trillion set by the government.
FIRS grossed its highest revenue of all time since 2012 in 2024.
Comparing the values of 2021, 2022, 2023 and 2024 reveals a significant shift.
The tax revenue collected in 2024 surpassed the amount collected in 2023 by an outstanding 75.6%.

Non-oil company income tax and two other sources accounted for over 70% of Nigeria's tax revenue in 2024

Company Income Tax (Non-Oil) emerged as the largest contributor, accounting for over 30% of total tax revenue.
NCS-Import VAT followed closely, contributing 23.63%, emphasising the significance of import-related taxes to Nigeria's revenue.
Traditional oil-based taxes such as Petroleum Profit Tax/Hydrocarbon Tax and CIT (Oil & Gas) jointly contributed over 26%, showing that oil remains a vital but declining pillar.
Newer tax streams like the Electronic Money Transfer Levy and NASENI (National Agency for Science and Engineering Infrastructure) funding have emerged, but still make up less than 2% of total revenue.
Minor tax categories like Capital Gains Tax, NITDEF (National Information Technology Development Fund), and NPTFL (Nigeria Police Trust Fund) had negligible impact, each contributing less than 0.5%

South Africa's personal income tax has increased in share from ~30% to nearly 40% over the years

Key Takeaways:

In 2007/08, personal income tax (PIT) contributed 29.46% of total tax revenue, while corporate income tax (CIT) added a substantial 24.46%.
The share of personal income tax in tax revenue rose by 27% from 2007/08 to 2023/24.
Corporate income tax contribution declined by 26% from 2007/08 to 2023/24.
In 2019/20, personal income tax made the largest contribution to tax revenue (38.9%), a 32% rise from the 2007/08 contribution.
Other taxes showed minor variations, averaging around 19% of total tax revenue.
Personal income tax reached its peak contribution at 38.92% in 2019/20 before dropping by 4% in 2023/24.

Over the last twenty years, the ratio of tax to GDP in South Africa has varied, reaching a high of 24.9%—a 19% increase since 2004/05

Key takeaways:

The tax-to-GDP ratio reached its peak in 2022/23 at 24.9%, signifying enhanced efficiency in tax collection.
Throughout the past two decades, the percentage of tax revenue relative to GDP has exhibited significant stability.
The tax revenue as a proportion of GDP has fluctuated between 21% and 25% over the last twenty years.
Notable declines occurred during global economic downturns, such as the financial crisis of 2008-2009 and the COVID-19 pandemic.
The recent years (2021-2024) reflect a robust recovery, with tax revenue percentages approaching peak levels.

Nigeria's VAT revenue shows over ₦1.1T increase in 2023 while the value in dollars shows a decline

VAT revenue in naira has consistently grown over the years, hitting an all-time high of ₦3.64 trillion in 2023.
The dollar value of VAT revenue declined despite the increase in naira terms, dropping from $5.88 billion in 2022 to $5.44 billion in 2023.
Over the last decade, VAT revenue in naira has grown at an impressive CAGR of 20.18%, while its dollar value grew at a much lower 5.48%, showing the impact of currency devaluation.
2023 saw one of the largest year-on-year increases in VAT revenue in naira, but the corresponding drop in dollar value indicates that exchange rate volatility are eroding real revenue gains.
Nigeria’s revenue collection efforts are improving, but the decline in dollar value highlights the need for economic stability and currency strength.
This trend reflects a broader issue in Nigeria’s economy - higher local earnings do not necessarily translate into increased global purchasing power.
With VAT being a major non-oil revenue source, policymakers must focus on stabilizing the exchange rate to maximize the real impact of revenue growth.