Business
FIRS targets N5 trillion VAT revenue amid EU concerns over tax evasion in Nigeria
The Federal Inland Revenue Service (FIRS) has laid out an ambitious road map, projecting a leap in revenue collection from Value Added Tax (VAT) to five trillion naira shortly.
The goal was set against the backdrop of concerns raised by the European Union about the prevalent issue of tax evasion in Nigeria, which they attribute to the opacity of the tax administration process.
Matthew Osanekwu, Head of the Policy and Legislation Division at FIRS, expressed confidence during a press conference in Abuja on Thursday: “I can assure you that VAT will surge from the current N3.6 trillion to five trillion naira as we move forward.”
This optimistic projection stems from comprehensive reviews and sweeping reforms within the country’s tax framework.
The announcement coincided with the celebration of the successes of the Support Programme for Tax Transition in West Africa (PATF), an initiative funded by the European Union designed to fortify domestic tax administration and foster improved cooperation within the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (WAEMU) regions.
Despite possessing one of the West African region’s lowest VAT rates, Nigeria has demonstrated a consistent enhancement in its tax collection efforts.
Highlighting this progress, Osanekwu mentioned that Nigeria’s VAT collection has progressively climbed from N1.1 trillion in 2019 to N3.6 trillion in 2023.
He alluded to ongoing discussions about revisiting the current VAT rate, which was raised from an initial five per cent to 7.5 per cent, contributing to the uptick in revenue.
“Discussions are in progress with the Presidential Committee on Fiscal Policy and Tax Reforms, as well as the Ministry of Finance, regarding the necessity of revising the VAT rate to be in line with ECOWAS standards,” Osanekwu elaborated.
He also pointed out that FIRS has broadened its tax collection ambit to encompass non-resident suppliers and is rigorously examining the tax exemptions extended to certain enterprises.
“We are in the final stages of reviewing our exemptions, and we anticipate presenting these recommendations to the tax reform committee for consideration of legislative changes,” he clarified.
In addition, Osanekwu revealed that the FIRS is performing a VAT gap analysis to pinpoint and rectify areas where VAT collection could be improved.
“By examining our tax policy, law, and collection procedures, we aim to identify our VAT gap and, through this informed approach, reach our five trillion naira target,” he assured.
Massimo De Luca, Head of Cooperation at the Delegation of the European Union to Nigeria, commended the accomplishments of the PATF initiative and called on the Nigerian government to increase transparency in the management of tax revenues.
De Luca observed, “Tax evasion often occurs when taxpayers do not see the benefits their contributions yield. In Europe, high levels of tax compliance are partly due to the quality of public services rendered and the clear accountability for the use of tax funds.”
Dalhat Kamal, Deputy Director of Tax Policy at the Federal Ministry of Finance, warned that a simple increase in the VAT rate might not directly translate to higher VAT revenue.
“A tax system must be accessible to draw more individuals into the tax base,” Kamal stated. “The efficacy of VAT collection depends not only on the rate but also on its prudent administration. Without meticulous management, we cannot fulfil the objectives of establishing the rate.”
Kamal further underscored the need to review the handling of tax expenditures to ensure that the nation’s fiscal strategies are meeting their intended targets.
Andrew Onyeanakwe, a tax specialist and member of the PATF steering committee, shed light on the program’s contributions.
“The PATF has been instrumental in creating regional tax management tools and standardizing the approach to evaluating tax expenditures among ECOWAS Member States. It has also set up a system for the monitoring and assessment of ECOWAS’s fiscal transition and harmonized VAT legislation across its member states,” he explained.
First Bank of Nigeria Limited (FirstBank) has secured a significant victory at the Court of Appeal in its case against General Hydrocarbons Limited (GHL) filed by their lawyers Babajide Koku SAN and Victor Ogude SAN, as reported by Nairametrics.
In its ruling on Thursday, 11 September 2025, the Court of Appeal set aside the earlier decision of the Federal High Court, Port. Harcourt, Obile J, which had dismissed FirstBank’s claims regarding the fraudulent diversion of proceeds from the sale of crude oil cargo pledged as collateral for loan facilities.
The dispute arose from crude oil aboard the FPSO Tamara Tokoni, which GHL had pledged to FirstBank as security for substantial loan facilities. Contrary to the terms of the pledge, GHL diverted the proceeds from the sale of the cargo, prompting the Bank to seek legal redress.
FirstBank filed an appeal challenging the trial court’s decision that had treated the matter as a simple debt recovery. The Court of Appeal, in its ruling, affirmed the maritime nature of the claim and emphasised the importance of preserving the Res, the crude oil cargo, as the central issue in dispute. The Court set aside the earlier order of the trial court vacating the order of arrest of the 2nd respondent.
The appellate court allowed FirstBank’s appeal and set aside the Federal High Court’s ruling. It authorised the sale of the crude oil cargo aboard FPSO Tamara Tokoni, with the proceeds to be deposited into an interest-yielding escrow account under the custody of the Chief Registrar of the Court of Appeal, pending the hearing and determination of the case at the trial court and the court of arbitration. The Chief Registrar was also appointed to take possession of the cargo and ensure its protection against dissipation or unauthorised disposition by any party.
This ruling marks a significant milestone for FirstBank and reinforces the Bank’s commitment to upholding the integrity of financial transactions and protecting the interests of its stakeholders.
FirstBank remains steadfast in its dedication to sound corporate governance, legal compliance, and the protection of its assets. The judgment of the Court of Appeal sets a strong precedent for the enforcement of collateral agreements and accountability in high-value commercial transactions.
There has been a surge of enthusiasm among many Nigerians as President Tinubu’s economic policies begin to yield promising outcomes.
The Central Bank of Nigeria (CBN) has enacted more stringent controls while sustaining a lower exchange rate at the official windows. Click link to continue reading.
The black market exchange rate for the dollar to naira continues to highlight Nigeria’s forex supply challenges, with many individuals and businesses relying on the parallel market for transactions.
CBN maintains tighter controls and a lower rate at official windows, limited access and allocation restrictions force most importers, businesses, and students abroad to turn to the parallel market, where prices reflect actual demand and supply pressures. Click link to continue reading.
The Dollar to Naira exchange rate in the black market continues to highlight Nigeria’s forex supply challenges, with many individuals and businesses relying on the parallel market for transactions.
CBN maintains tighter controls and a lower rate at official windows, limited access and allocation restrictions force most importers, businesses, and students abroad to turn to the parallel market, where prices reflect actual demand and supply pressures. Click link to continue reading.
The exchange rate of the Dollar to the Naira in the black market serves as a stark indicator of the ongoing foreign exchange supply challenges facing Nigeria.
As the official market remains constrained by stringent regulations enforced by the Central Bank of Nigeria (CBN), many individuals and businesses find themselves increasingly dependent on the parallel market to fulfill their currency needs.
The naira traded near a five-month high at 1514.86/$ on the official window at the close of last week, according to data from the Central Bank of Nigeria.
This indicates a strong start to September for the domestic currency, which started the month at 1,526.09/$ before closing at 1,514.86/$ on Thursday at the Nigerian Foreign Exchange Market.
The naira had last strengthened below the 1515/$ mark on March 6, when it closed trading at 1,512.30/$ on the NFEM. At the parallel market, it also appreciated, rising to 1,538/$, a 0.02 per cent strengthening.
Analysts maintain that the strength of the naira has been supported by improved liquidity and sustained dollar inflows. The Central Bank of Nigeria also intervened in the market to the tune of about $15bn.
Reviewing the FX market in the past week, AIICO Capital said the FX market opened the week on a calm note, with balanced flows keeping rates stable around $/N1527–1533 and no need for CBN intervention.
“Mid-week, offshore supply and opportunistic buying supported sentiment, lifting NAFEX fixing to $/N1528.13. Activity remained fluid with tight bid-offer spreads, as rates retraced to $/N1527.00 before stabilising.
Momentum improved further as the CBN intervened with $15m, and additional portfolio flows boosted supply, driving a sharp rally to the $/N1519–1523 range.
“By week’s end, the naira sustained gains, trading between $1508.00 and $1529.00. Overall, the currency appreciated strongly, closing at $/N1,514.8671,” said the AIICO Capital experts.
The weekly market report from Cowry Asset Management read, “In the coming week, we expect the naira to trade relatively stable across both the official and parallel markets, supported by sustained dollar inflows and a modest buildup in external reserves. However, pressures from speculative demand and global oil price volatility may cap further gains. The outcome of the OPEC+ meeting will be a key driver for crude oil prices, with any adjustments to production levels likely to influence Nigeria’s external earnings and, by extension, FX market dynamics.”
On the macroeconomic front, the country’s external reserves recorded a modest uptick, rising 0.10 per cent week-on-week to $41.31bn from $41.27bn, largely supported by stronger foreign inflows.
Analysts maintained that this increase in reserves provides an important buffer against external vulnerabilities such as volatile oil prices and currency pressures. It also offers the CBN greater capacity to intervene in the foreign exchange market when necessary, helping to stabilise the naira in the near term.
The outlook for the naira remains stable in the near term, supported by improved US dollar supply.
The black market exchange rate of the dollar to naira continues to highlight Nigeria’s forex supply challenges, with many individuals and businesses relying on the parallel market for transactions.
CBN maintains tighter controls and a lower rate at official windows, limited access and allocation restrictions force most importers, businesses, and students abroad to turn to the parallel market, where prices reflect actual demand and supply pressures. Click link to continue reading.
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