Nigeria finance bill will modestly increase revenue

Significance

The bill aims to expand the accruable revenue for the federal government, crucial for meeting the government’s 2022 fiscal targets. In particular it looks to close existing tax loopholes rather than raising consumption taxes which could inhibit economic growth.

Impacts

• Increased taxes will only have a limited impact on consumer spending and inflation.
• The bill will not appreciably increase state-level revenues.
• Broader institutional reforms in the public sector are unlikely due to powerful patronage networks.