The Rise of FIRS: Transforming Tax Revenue Collection in Nigeria

Title: FIRS Emerges as Top Revenue Contributor, Transforming Nigeria’s Fiscal Landscape

In a remarkable shift in Nigeria’s economic landscape, the Federal Inland Revenue Service (FIRS) has emerged as the leading revenue contributor, surpassing the traditional dominance of crude oil receipts. Under the leadership of Zacch Adedeji, FIRS has transformed into a powerhouse, accounting for close to 70 percent of the total revenues collected and shared by the three tiers of government.

Before the discovery of crude oil in commercial quantities, agriculture was the backbone of Nigeria’s economy. However, with the rise of black gold, oil revenues overshadowed other sectors. Now, FIRS has taken center stage, with its tax collections propelling the country’s fiscal stability and well-being.

The monthly contributions by FIRS have been staggering, with the agency consistently accounting for over 50 percent of the total revenue shared at the Federation Account Allocation Committee meetings. In 2024, FIRS contributed billions of naira each month, outperforming other revenue-remitting bodies like NNPC, NUPRC, and the Nigeria Customs Service.

The success of FIRS can be attributed to a strategic overhaul and process re-engineering initiated by Adedeji. By placing taxpayers at the center of its policies and initiatives, FIRS has streamlined tax processes, removed hurdles in tax payment, and enhanced transparency and accountability. This customer-centric approach has led to a significant increase in the number of taxpayers voluntarily enrolling in the agency’s tax administration platform.

The impact of FIRS’s unprecedented growth in tax revenue extends beyond just numbers. It signifies a shift towards diversifying the economy and reducing reliance on oil revenues. President Bola Tinubu’s policies, such as the removal of fuel subsidies and exchange rate unification, have further boosted FIRS’s tax collections.

Looking ahead, FIRS aims to increase Nigeria’s tax-to-GDP ratio to 18 percent in the next three years, without burdening taxpayers. The agency’s ambitious target for 2025 is to collect N25.2 trillion in tax revenue, providing more resources for the government to meet its obligations.

In conclusion, FIRS’s remarkable performance under Adedeji’s leadership has reshaped Nigeria’s fiscal landscape, highlighting the importance of tax revenue in sustaining the country’s economy. As FIRS continues to break records and set higher targets, a modernized tax system will play a crucial role in driving domestic revenue mobilization and economic growth.