By Aisha Muhammad Magaji
Nigeria’s efforts to reform its tax administration have received a major boost as the country gained global recognition for its National Tax Identification Number (Tax-ID) system, which international observers say has improved transparency, compliance, and revenue collection.
The commendation came during the Global Tax Transparency Forum held in Paris over the weekend, where Nigeria was cited as one of the African countries making significant strides in building a more inclusive and accountable tax regime.
According to the Federal Inland Revenue Service (FIRS), over 41 million taxpayers are now registered under the Tax-ID system, a leap from less than 10 million in 2015. The digital platform links individuals and businesses to a unique identifier, making it easier for authorities to track taxable activities, reduce evasion, and expand the tax net.
“This recognition is proof that Nigeria is on the right path in strengthening its fiscal system. Our Tax-ID framework has helped us broaden the tax base and improve compliance levels across sectors,” FIRS Chairman Zacch Adedeji said in a statement.
The Organisation for Economic Co-operation and Development (OECD) praised Nigeria for integrating its Tax-ID system with banking, corporate registration, and customs operations, which has improved data sharing between agencies.
OECD officials noted that the system aligns with global standards on tax transparency, which many developing economies struggle to meet.
“By harmonizing tax identification with other critical national databases, Nigeria is reducing loopholes for evasion and strengthening its fiscal independence,” an OECD delegate remarked at the forum.
Local analysts say the global recognition could boost investor confidence in Nigeria’s financial system, particularly as the country grapples with revenue shortfalls and rising debt servicing costs.
“Tax reform is central to Nigeria’s economic survival. The fact that the international community now acknowledges the country’s progress sends a strong message to investors and development partners,” said Dr. Ayo Teriba, CEO of Economic Associates.
However, challenges remain. Despite the growing number of registered taxpayers, Nigeria still has one of the lowest tax-to-GDP ratios in the world, standing at around 10% in 2024, compared to the African average of 16%, according to World Bank data.
Some Nigerians have expressed caution, arguing that recognition abroad should translate into tangible improvements at home.
The FIRS says it is addressing these concerns by promoting transparency and ensuring that tax revenues are tracked more effectively.
The government has pledged to strengthen enforcement measures, expand the digital infrastructure supporting the Tax-ID, and integrate informal sector businesses into the formal tax net.
“This recognition should not be an end but a call to do more. Our target is to raise Nigeria’s tax-to-GDP ratio to at least 18% by 2030,” Adedeji added.
With global recognition now in hand, Nigeria faces the task of consolidating its gains while ensuring that the benefits of a stronger tax system trickle down to ordinary citizens.
