IMF commends FIRS for progress on tax reforms

The International Monetary Fund (IMF) has commended the Federal Inland Revenue Service (FIRS) for making “significant progress” in its core functions of generating income for the government. The support shows strong international backing as the country undertakes major tax reforms aimed at boosting domestic revenue mobilisation and reducing reliance on oil income.

Speaking at the launch of an IMF-supported mission at the Revenue House in Abuja on Wednesday, Paulo Paz, Senior Economist at the IMF’s Fiscal Affairs Department, praised the agency’s efforts under the leadership of Executive Chairman Zacch Adedeji.

“Our take on the four tax laws is first, a recognition of the very good work that FIRS has been providing to the citizens,” Paz said. He emphasised that the recently signed laws—part of President Bola Tinubu’s sweeping fiscal reform agenda—will “increase the relevance of the tax administration in Nigeria,” placing greater responsibility on the agency to deliver improved compliance and enforcement.

The IMF mission, composed of tax experts and economists, is tasked with evaluating FIRS’s preparedness for the challenges and opportunities these new tax laws bring. It will explore ways to deepen technical assistance, enhance digital transformation, and streamline compliance efforts.

“I want to express our honour of being here and being a partner of FIRS. Thank you for your trust in our advice. We congratulate you for the good results so far. There is more to come, and we are here to help,” Paz added, highlighting the Bretton Woods institution’s commitment to sustained collaboration.

For his part, Adedeji, who was represented at the event by his Chief of Staff, Tayo Koleosho, welcomed the IMF’s ongoing support and underlined key areas of partnership.

“The IMF has gone on this journey with us, and I think we are in a good place to continue the journey together,” Adedeji said. “We are working together on digital transformation, VAT automation, and enhancing the compliance programme, including automating some of those processes.”

Adedeji also noted the importance of aligning strategic plans with operational tasks, saying, “I am interested in the corporate plan and the nexus of data portfolio management so that we have our strategy being dissolved into those manageable tasks. It’s very important that those things are well coordinated.”

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The FIRS plans to evolve into the Nigeria Revenue Service (NRS) in 2026, a rebranding and restructuring effort aimed at creating a more efficient, accountable, and transparent tax authority. This transition is expected to deepen reforms and leverage data-driven administration.

Bolaji Akintola, Coordinating Director of FIRS’s Corporate Services Group, explained that the IMF has been a critical stakeholder in the agency’s reform journey. Since 2018, FIRS has conducted two systemic evaluations using the Tax Administration Diagnostic Assessment Tool (TADAT), a global standard for assessing tax administration performance.

“The fact that the results of the 2023 TADAT showed significant improvement on those of 2018 is indicative of the commitment of the Service towards institutional excellence,” Akintola said.

She added that many of the weak indicators from the 2023 assessment have already been addressed and incorporated into the four new tax reform laws recently signed by President Tinubu.