The National Bureau of Statistics (NBS) has announced an upward review of the country’s tax-to-gross domestic product (GDP) ratio for 2021 to 10.86 percent from 6 percent.
In its report titled ‘Tax-to-GDP Ratio Revised Computation (2010-2021)’, the statistics agency said the revised calculation now includes relevant revenue collected by other agencies of government.
The tax-to-GDP ratio is a measure of a nation’s tax revenue relative to the size of its economy.
Developed nations typically have higher tax-to-GDP ratios than developing nations.
According to the World Bank, tax revenues above 15 percent of a country’s GDP are a key ingredient for economic growth and, ultimately, poverty reduction.
The report said the revised computation is a collaborative effort of the Federal Inland Revenue Service (FIRS), the federal ministry of finance, and the NBS for “better measurement” of Nigeria’s tax-to-GDP ratio.
The report said the data used were sourced from the office of the accountant general of the federation (OAGF), FIRS, Nigeria Customs Service (NCS), Joint Tax Board (JTB), NBS, and other relevant agencies of government that collect revenue.
“The new figures are revised and updated numbers to reflect better data sources and improved estimation using the Organisation for Economic Co-operation and Development (OECD) manual,” the NBS said.
“The OECD manual is an improvement over the System of National Accounts (SNA 2008) classification of taxes.
“Although the System of National Accounts conceptual framework and its definitions of the various sectors of the economy are reflected in the OECD’s classification of taxes, the OECD classifications provide the maximum disaggregation of statistical data on what are generally regarded as taxes by tax administrations.
“The revised computation took into account wider coverage of data at the Federal, State, and Local Government levels, and revenue items not previously included in the computations, particularly, relevant revenue collected by other agencies of government.
“At the end of 2021, the tax-to-GDP ratio stood at 10.86% for Nigeria compared to an estimated 6% previously reported.”
Source: Top Stories
