The Nigerian Government is aiming for a substantial revenue increase from the oil sector in 2024, with plans to achieve a remarkable 214% surge in Petroleum Profit Tax (PPT) collections, totalling N9.96 trillion, Federal Inland Revenue Service (FIRS) disclosed.
This target, which signifies a significant jump from the N3.17 trillion generated in 2023 and an 89% increase over the initial projection for the same year, stems from the implementation of fiscal reforms under the Petroleum Industry Act (PIA).
The PIA, which phased out the Petroleum Profits Tax (PPT) and introduced the Hydrocarbon Tax (HT), seeks to enhance the financial viability of the oil and gas sector amidst fluctuating global oil prices.
ALSO READ: Nigerian Govt Approves N344bn Five-Year Metering Expenditure for DisCos
Why Nigeria Failed to Meet Oil Production Targets in 10yrs
Norway and Nigeria to Strengthen Partnership in Energy Production
Additionally, the government’s efforts to optimize tax collection in the petroleum sector have faced challenges, with the FIRS reporting a shortfall in PPT collection targets for 2023.
This underperformance underscores the complexities of revenue generation from the oil industry amid broader tax collection challenges.
Despite these hurdles, the government remains committed to revitalizing the sector, as highlighted by ongoing efforts to address issues such as pipeline vandalism, illegal oil bunkering, and theft.
However, external factors such as the Russia-Ukraine conflict and production cuts enforced by OPEC and its allies pose additional challenges to achieving revenue targets in 2024.
Nonetheless, with strategic reforms and concerted efforts, the Nigerian government aims to overcome these obstacles and drive sustainable growth in the oil sector under the administration of Bola Tinubu.
