Yemisi

The federal government is poised to forfeit $10 million from a $103 million World Bank loan under the Fiscal Governance and Institutions Project (FGIP), following inadequate audits, missed deadlines, and unmet reform targets. Although there have been some improvements in revenue generation and data transparency, key milestones remain unachieved as the June 30 deadline approaches. The $10 million in performance-based funds is being withdrawn due to several shortcomings: A June 2025 restructuring document from the World Bank reveals that Nigeria’s Ministry of Finance has formally requested the cancellation of $10.4 million. This includes: Despite exceeding its 2024 non-oil revenue target by 153%, the FGIP continues to face systemic hurdles such as weak real-time accountability, poor audit outcomes, and stalled automation reforms. The World Bank acknowledged progress in transparency and tax reforms but rated overall project monitoring as “moderately unsatisfactory.” With final disbursements estimated at $96.04 million—93% of the original loan—Nigeria risks damaging its international reform reputation unless key digital infrastructure projects like RABS are urgently accelerated. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

In a strategic move aimed at enhancing revenue generation and strengthening tax administration, the Executive Governor of Imo State, His Excellency, Distinguished Senator Hope Uzodimma, has secured a landmark collaboration between the Federal Inland Revenue Service (FIRS) and the Imo State Government through the Imo State Internal Revenue Service (IIRS). This collaboration will see both agencies conduct joint tax audit exercises across Imo State. The initiative, in alignment with Governor Uzodimma’s “3R” mandate—Reconstruction, Rehabilitation, and Recovery—is designed to promote transparency, reduce revenue leakages, and improve voluntary tax compliance among individuals and corporate bodies in the state. The Joint Tax Audit framework has been formally approved by the Executive Chairman of FIRS, Dr. Zacch Adedeji, via a letter transmitted through the office of the Coordinating Director, Emerging Taxpayers Group. The Imo State Government, through the Executive Chairman of IIRS, Mr. Justice Okoye (FCA), expressed deep appreciation to Dr. Adedeji for his visionary leadership and for fostering inter-agency cooperation that benefits the broader Nigerian tax system. Commendations were also extended to Mr. Kabir Abba, Coordinating Director of the Emerging Taxpayer Group, and Mr. Olugbenga Daniel, Director of the Emerging Taxpayers Department – South, for their vital roles in facilitating and rolling out the joint audit program in Imo State. This joint effort between FIRS and IIRS represents a proactive step toward building a more effective and unified tax administration. By eliminating audit overlaps, improving data accuracy, and streamlining tax processes, the collaboration is expected to yield significant benefits for both tax authorities and taxpayers. More importantly, it will contribute to creating a fair and efficient tax assessment environment. Governor Uzodimma’s administration has consistently emphasized fiscal discipline and improved internally generated revenue as cornerstones of its broader economic reform agenda. By leveraging the expertise and framework of FIRS, the state aims to cultivate a stronger tax culture that supports sustainable development initiatives and provides the necessary funding for key infrastructure and social programs. Taxpayers across Imo State are encouraged to cooperate fully with audit teams and take advantage of this opportunity to regularize their tax records. The Imo State Internal Revenue Service remains committed to effective tax governance and will continue to pursue reform-driven partnerships that boost performance and transparency in revenue administration. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Federal Inland Revenue Service (FIRS) has launched a National Intelligence Gathering System designed to collect data and identify tax evaders and defaulters across Nigeria. This development was announced by Mr. Abdullahi Ismaila, Director of Communications and Liaison at FIRS, in a statement issued Wednesday in Abuja. According to Ismaila, the Executive Chairman of FIRS, Mr. Muhammad Nami, disclosed the initiative during a collaborative visit to the Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Professor Bolaji Owasanoye. Nami explained that the newly introduced system aims to detect and apprehend tax evaders, ensuring they fulfill their tax obligations. The system is ICT-based and is being implemented in collaboration with the ICPC, other anti-corruption agencies, and financial institutions. He noted that the initiative is also geared toward combating financially driven crimes such as money laundering. “The ICPC is a key stakeholder in this effort. We are strengthening our collaboration to detect tax fraud and plug revenue leakages so that we can increase the funds available to government for budget implementation,” Nami said. He emphasized the importance of access to data and intelligence held by partner agencies, which would support efforts to expand the tax net and enforce compliance. Additionally, Nami stated that FIRS is undergoing a comprehensive restructuring to enhance its operational efficiency and exceed its 2020 revenue targets. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

On Wednesday, the President of the Senate, Godswill Akpabio, stated that the National Assembly’s decision to approve the tax reform bills submitted by President Bola Tinubu was motivated by the national interest. Through his media aide, Eseme Eyiboh, Akpabio explained that the bills were passed after thorough negotiations, extensive stakeholder consultations, and transparent deliberations that prioritized national development above partisan or regional considerations. The legislation approved includes the Joint Revenue Board (Establishment) Bill, Nigeria Revenue Service (Establishment) Bill, Nigeria Tax Administration Bill, and Nigeria Tax Bill — all key components of President Tinubu’s fiscal reform agenda under the Renewed Hope initiative. Originally presented to the National Assembly in November 2024, the bills were adopted by the Senate last week after several months of rigorous debate. “These bills form the cornerstone of the president’s economic reforms,” Akpabio said. “Once enacted, they will enhance Nigeria’s revenue collection system and reform tax administration to promote fairness and efficiency.” The legislative journey was challenging. Akpabio disclosed that early proposals, such as allowing states that generate tax revenue to retain 60% of Value Added Tax (VAT) proceeds, faced strong opposition, especially from northern lawmakers concerned about potential economic disadvantages to their region. A compromise was reached, reducing the retention rate to 30% and substituting the term “derivation” with “place of consumption,” enabling consensus. The bills also encountered resistance from some state governors and internal disagreements within the National Assembly. “There were moments of intense disagreement, even among Senate leaders,” the statement noted. “However, Senator Akpabio’s diplomacy, wisdom, and consensus-building skills were crucial in guiding the process to a positive conclusion.” The former governor of Akwa Ibom also praised his colleagues in both chambers for their support, singling out House Speaker Tajudeen Abbas for effectively rallying younger lawmakers. Additionally, governors who initially opposed the bills were commended for eventually accepting the revised terms. “Their cooperation proved pivotal,” Akpabio remarked. “By easing regional tensions and endorsing the amendments, the governors facilitated wider stakeholder acceptance.” He emphasized that the legislative process was thorough and inclusive, involving public hearings and active stakeholder engagement. The bills are now ready to be sent to the president for assent. “With two years remaining in President Tinubu’s term, this marks a significant milestone,” the Senate President concluded. “Credit is due to all who contributed to this achievement.” For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Imo State chapter of the Peoples Democratic Party (PDP) has condemned the state’s poor showing in the recently released Value Added Tax (VAT) data for the first quarter of 2025, which ranked Imo 35th out of 36 states, describing it as evidence of a lack of effective economic policies. In a press statement, the PDP spokesperson, Lancelot Obiaku, said the latest figures confirm the party’s previous claims that Governor Hope Uzodinma’s administration has weakened the state’s economy and hindered business and commercial activities through ineffective policies, making Imo unattractive to investors. Obiaku highlighted that Imo contributed only N2.34 billion in VAT revenue to the federation account, the second-lowest among all states, narrowly ahead of Taraba State, which contributed N2.33 billion. He expressed disbelief that Imo performed worse than other Southern states, trailing far behind Anambra State, which generated N10.73 billion, and Ebonyi State, with N7.43 billion. “VAT is a consumption tax levied on goods and services at every stage of production or distribution, paid by consumers but collected by businesses and remitted to the government through the Federal Inland Revenue Service (FIRS). The VAT ratio reflects the level of economic activity and commercial vitality of states and correlates directly with productivity and economic health,” Obiaku explained. “The PDP in Imo State believes this poor performance clearly indicates the dire state of the local business environment and economy. Many businesses are closing down, and the state has failed to attract meaningful investment under Governor Uzodinma’s ineffective leadership,” the statement added. Obiaku recalled that Imo was once the leading hospitality hub in Nigeria but lamented that insecurity has forced 70% of hotels and entertainment venues to shut down. He expressed growing concern over the state government’s lack of a coherent economic plan to reverse this decline. The party further accused Governor Uzodinma of showing little commitment to improving the economy, citing his failure to reside in the state to effectively oversee governance. “How can the economy improve when the governor shows no genuine interest in the state’s development by choosing not to live in Imo? His absence has contributed to the worsening insecurity,” the statement alleged. The PDP also criticized the governor for allegedly controlling resources meant for public welfare and undermining the autonomy of ministries, agencies, parastatals, and local government funds. “The local government system has been weakened. Even the appointed LGA chairmen lack the necessary resources to make an impact because the state government controls their allocations. “Despite receiving an average of N6.5 billion monthly in LGA allocations between January and September 2024, and N8 billion monthly from September 2024 to May 2025—totaling N162 billion in the past 16 months alone—and about N350 billion in previous years, totaling over N500 billion in the last five years, Imo has no significant economy-boosting projects to show for it,” the statement said. The PDP insisted that if there were real developmental projects and a strong economic plan, businesses would be thriving, foreign investments would be flowing in, and VAT revenues would have increased. Obiaku concluded by urging the governor to urgently formulate a solid economic policy to start reviving Imo’s economy. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

In a strategic move aimed at revitalizing Nigeria’s oil and gas industry, President Bola Tinubu has signed the Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, into law. Announced on June 2, 2025, this executive order introduces groundbreaking tax relief measures for upstream oil and gas companies that adopt cost-saving practices. What’s in the New Tax Incentive? The policy allows qualified companies in the upstream petroleum sector to retain up to 50% of the additional government revenue their cost-efficiency efforts generate. However, to benefit, these companies must meet strict performance standards set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). To ensure public revenues are protected, the value of the tax credit is capped at 20% of a company’s annual tax liability. This creates a balanced structure—rewarding efficient companies while safeguarding government income. Why This Matters for Nigeria’s Economy Nigeria’s economy is deeply tied to its oil and gas sector, which remains a key source of revenue and foreign exchange. By incentivizing operational efficiency, this order aims to: A Sign of Broader Tax Reform? This move comes amid widespread calls to reform Nigeria’s tax system, which critics argue places a heavy burden on small businesses and low-income earners. Social media conversations—especially on platforms like X—have been filled with frustration over high taxes on struggling companies. President Tinubu’s latest action suggests a willingness to rethink the country’s tax approach, at least starting with the oil and gas sector. It also hints at broader reforms on the horizon, especially as new tax legislation is currently under review in the National Assembly. What Comes Next? The success of this initiative will depend on the NUPRC’s enforcement of cost-efficiency standards and how effectively companies adapt to these new incentives. Industry experts are hopeful, with some predicting that this model could inspire similar reforms across other sectors of the economy. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adelabu Adedeji, officially welcomed the agency’s newly recruited staff during an induction programme held on Monday, June 2, 2025. Delivering his keynote address, Adedeji highlighted the critical responsibility the new employees carry in helping shape Nigeria’s economic future and ensuring long-term fiscal sustainability. “Today marks more than just your first day on the job — it’s the start of a transformative journey. Your skills and dedication will be instrumental in redefining Nigeria’s financial framework,” he said. In a press statement issued by Arabinrin Aderonke Atoyebi, Technical Assistant to the Executive Chairman, the FIRS reaffirmed its commitment to overhauling tax administration through a strategic focus on People, Processes, and Technology. This three-pillar strategy, the statement explained, is the foundation for driving institutional relevance, improving operational efficiency, and delivering measurable national impact. “Our people are our most valuable resource. The effectiveness and sustainability of our systems depend on your expertise, creativity, and integrity,” Adedeji stated. He also stressed the agency’s focus on continuous learning and capacity building, noting that empowered and well-trained staff are essential for building public confidence and enhancing revenue collection. As part of ongoing reforms, the FIRS is also streamlining internal processes to improve transparency and accountability, while investing in advanced technologies such as artificial intelligence and data analytics to drive smarter, faster service delivery. “Technology cannot replace competence — it enhances it. It’s a tool that helps us achieve precision and efficiency,” he added. Referencing a Yoruba proverb, the Chairman reminded the new employees that systems alone are not enough — success ultimately depends on the people behind them. “Without your commitment, creativity, and sense of ownership, even the best tools will remain idle,” he remarked. He closed with a call to action, urging the inductees to uphold the highest standards of professionalism and ethics.

The Nigerian Senate has passed all four tax reform bills proposed by President Bola Tinubu, marking a major step toward reshaping the country’s tax system. The new legislation is designed to modernise tax administration, boost revenue collection, and ensure a more balanced distribution of tax proceeds among the federal, state, and local governments. Highlights of the New Tax Reform Bills Key Changes from Earlier House Versions Compared to the versions passed by the House of Representatives, the Senate made several notable changes: With Senate approval secured, the harmonised tax bills are now awaiting President Tinubu’s assent, signaling a significant shift in Nigeria’s approach to taxation and public finance. While these reforms are a positive step, many observers argue that genuine transformation must go beyond legislation. For the treasury and other public institutions to function effectively and free from corruption, governance structures must be strengthened. This involves defining clear roles, aligning positions with relevant expertise, streamlining bureaucratic processes, and making merit-based appointments the norm. Such reforms are critical to building a transparent, efficient, and accountable public service system. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Federation Account recorded a total revenue inflow of N7.4 trillion in the first quarter of 2025, according to data from the Federation Account Allocation Committee (FAAC). This revenue was remitted by major government revenue-generating agencies, including the Federal Inland Revenue Service (FIRS), Nigeria Customs Service, and others. Of the total inflow, N4.96 trillion was distributed as statutory allocations among the Federal Government, 36 states, and 774 local government areas between January and March 2025. The FAAC, chaired by the Minister of Finance, Mr. Wale Edun, comprises finance commissioners from all 36 states, the Accountant General of the Federation, and representatives from the Nigerian National Petroleum Company Ltd (NNPC), FIRS, Customs, Revenue Mobilisation, Allocation and Fiscal Commission, and the Central Bank of Nigeria (CBN). Revenue Sharing Framework The Federation Account operates under a legal structure that divides funds into three primary components: Under statutory allocation: For VAT: Oil-producing states also receive an additional 13% derivation fund. Q1 Allocation Breakdown Of the N4.96 trillion disbursed: Monthly Breakdown Factors Behind Revenue Growth FAAC attributed the improved revenue performance to: Fiscal Outlook and Government Response Despite the improved revenue, economic analysts have urged all levels of government to manage the funds responsibly, especially amid: In response to declining global oil prices, which have fallen below the $75 per barrel benchmark in the 2025 budget, the Federal Government announced plans to: Finance Minister Wale Edun emphasized the need for fiscal discipline: “Our budget was based on 2 million barrels per day at $75 per barrel, and we are now underwater relative to those assumptions. When your budget revenue is below expectation, you have to hunker down, conserve, and prioritize.” To bridge the budget shortfall, the government plans to: Edun noted that the 2025 budget includes a provision for asset sales, which may exceed initial expectations due to rising investor interest. He concluded that President Bola Tinubu’s economic agenda aims to stabilize the economy and attract investments that promote job creation and poverty reduction. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), has revealed that only 19 percent of Nigerians pay taxes, based on findings from several studies. Adedeji made this known on Tuesday during the launch of a new book titled “Taxation: Essential Knowledge for Nigerian Children”, an initiative supported by the FIRS. He was represented at the event by his Special Adviser on Research and Statistics, Aisha Mahmoud. The book, authored by Aderonke Atoyebi and Ejura Haruna, is aimed at instilling tax awareness in children and educating them on the importance of tax compliance from a young age. “We’ve conducted several studies and found a strong link between tax education and tax compliance,” Adedeji said. “When children are properly educated, they grow into responsible adults who understand their civic duties, including paying taxes. Our findings show that only about 19 percent of Nigerians currently pay taxes.” He noted that some research even places the figure lower, between 10 to 15 percent. “Compared to other countries—even within Africa—this is extremely low,” he added. To address this gap, Adedeji emphasized the need for collaborative efforts with government institutions and private stakeholders to raise tax awareness among young Nigerians. “It’s easier to nurture tax-compliant individuals from childhood than to correct adults who habitually evade taxes,” he said. “That’s why we wholeheartedly support initiatives like today’s book launch.” According to Adedeji, fostering a generation that understands taxation will lead to greater public demand for transparency and accountability in government spending. “By introducing tax education at the primary and secondary school levels, children will develop an early understanding of their responsibilities as citizens,” he said. “It shouldn’t be limited to accounting students—everyone needs to understand the basics of taxation to avoid non-compliance.” 60,000 Free Copies to Be Distributed Across Nigeria Aderonke Atoyebi, co-author of the book and technical assistant on broadcast media to the FIRS chairman, announced that 60,000 copies will be distributed nationwide across the six geopolitical zones. The books were produced at no cost to recipients, thanks to the support of FIRS and Sprezzatura Publishing. Atoyebi said the goal is to demystify tax and make the topic relatable to children. “People often say nobody wants to pay tax. That’s why we’re starting early—to teach children that the amenities they enjoy, like roads and schools, are funded through taxes,” she explained. She emphasized the book’s focus on civic education, governance, and the role of responsible citizenship. “We want children to understand that tax revenue isn’t for private pockets—it funds infrastructure and public services for everyone’s benefit.” Touching on education-specific taxes, she pointed out that some of the revenue is channeled through TETFund to support educational development. The book uses simple language and engaging comic-style illustrations to make complex tax concepts more accessible and enjoyable for children. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.