According to data from the National Bureau of Statistics, the federal government received N1.09 trillion in indirect taxes in the first two quarters of 2022.

This represents an increase of 10.29 percent over N984.33 billion obtained in the first two quarters of 2021.

Indirect taxes are calculated based on current base prices. They are taxes that a producer or retailer pays to the government and that is later passed on to the consumer. They include value added tax, customs or import duties, among others.

These figures were revealed by the NBS in its recent gross domestic product report, in which it revealed that the country’s GDP grew by 3.54 percent in real terms in the second quarter of 2022. It also stated that the total GDP in nominal terms was N45.01tn.

Figures from the GDP data point to steady growth in indirect taxes. Taxes increased from N636.19 billion in the first and second quarters of 2020 to N984.33 billion in the corresponding period of 2021, rising to N1.09 billion in the same period of 2022.

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With dwindling oil revenues, the federal government has made efforts to increase its non-oil revenues, especially tax revenues.

In its Medium-Term Expenditure Framework and Fiscal Strategy Paper 2023-2035, the government said: “Monetization remains the federal government’s biggest fiscal challenge.

“The systemic problem of resource mobilization has been exacerbated by recent economic recessions. Recognizing that mobilizing domestic revenues is important for sustainable development, the federal government has established strategic revenue growth initiatives to improve government revenues and embed fiscal prudence, with an emphasis on achieving value for money.

“These measures include improving the tax administration framework, including tax filing and payment; as well as the introduction of new and/or further increases in existing pro-heath taxes such as excise duties on sugar-sweetened beverages, tobacco and alcohol. Mixed reactions have greeted the implementation of these measures.”

The government announced that the tax rate would remain within the deadline, but anticipated growth in various taxes, taking into account improvements in the activities of the various tax administrators.

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It also hopes that the consumer expenditure subject to VAT will increase from N53tn in 2023 to N40tn in 2024 and N45tn in 2025.

Commenting on this growth, associate professor of economics at Pan Atlantic University, Olalekan Aworinde, said: “This means that the government is trying to expand the tax grid. They are indirect taxes, probably telecom taxes, or it could also be on imports and excise duties.

“It’s good, which means the government is trying to generate more revenue in the form of taxes instead of relying on oil prices. What they need to do is look at that path where they get this result and develop them well so they don’t just milk it without investing in it to grow.”

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