Skip Navigation

Transparent Tax Revenue Reporting (NG0017)



Action Plan: Nigeria Action Plan 2019-2022

Action Plan Cycle: 2019

Status: Active


Lead Institution: Office of the Accountant General of the Federation

Support Institution(s): Federal Inland Revenue Service (FIRS), Central Bank of Nigeria, Ministry of Finance, Budget and National Planning, Nigeria Customs Service, Nigerian Maritime Administration and Safety Agency (NIMASA), Financial Reporting Council of Nigeria, Federal Ministry of Justice (FMoJ), Nigerian Investment Promotion Council (NIPC), National Bureau of Statistics, National Assembly, Corporate Affairs Commission, RMAFC, Joint Tax Board, Governors Forum, Nigerian Ports Authority, Ministry of Trade and Investment, Nigerian Immigration Service. Civil Society Legislative Advocacy Centre (CISLAC), Action Aid Nigeria, The Civil Resource Development and Documentation Centre (CIRDDOC), Institute of Chartered Accountants of Nigeria (ICAN), Association of National Accountants of Nigeria (ANAN), Chartered Institute of Taxation of Nigeria (CITN), Nigeria Association of Chambers of Commerce, Industry, Mines & Agriculture (NACCIMA), Manufacturers Association of Nigeria (MAN), Department For International Development (DFID), OXFAM, Council for the Regulation of Engineering in Nigeria (COREN), Centre for Social Justice, Paradigm Leadership Support Initiative (PLSI), Transparency and Accountability in Totality (FollowTaxes), Action Aid.

Policy Areas

Access to Information, Fiscal Openness, Legislation & Regulation, Open Data, Open Response & Open Recovery, Private Sector, Publication of Budget/Fiscal Information, Tax

IRM Review

IRM Report: Nigeria Design Report 2019-2021

Starred: Pending IRM Review

Early Results: Pending IRM Review

Design i

Verifiable: Yes

Relevant to OGP Values: Pending IRM Review

Potential Impact:

Implementation i

Completion: Pending IRM Review


Brief description:
The commitment seeks to promote increased tax and non-tax revenues by ensuring the prevention of all forms of tax evasion and the reduction of tax avoidance, Illicit financial flows and leakages. This will address the issues of multiple taxation, levies, charges, duties and also make businesses pay their fair share of tax and non-tax dues. It will also create equity such that local businesses are competitive, can create jobs and contribute to economic development. Tax and non-tax avoidance and evasion have resulted in reduction of revenue needed to finance development, which has consequently created an unfavorable environment for local entrepreneurs. This results in the inability of the government to provide sound services for citizens’ welfare and failure of small businesses, thereby increasing poverty.

General problem:
By committing to adopt common reporting standards and the Addis Tax Initiative, the government will address the tripartite challenges of: non-declaration of tax liability and tax payment by the companies to tax authorities; tax evasion and avoidance; and, abuse of tax incentives and waivers.

Specific OGP issue:
i. Diminishing corporate integrity and public accountability.
ii. Weak public services delivery.
iii. Ineffective management of public resources by the government.

Rationale for the commitment:
This commitment is relevant to Revenue and Tax Transparency, Accountability, Technology and Innovation and Access to Information.

Main objective:
To establish transparent, fair and efficient tax systems that will aid the generation of substantially more domestic revenue for the improvement of citizens’ welfare.

Anticipated impact:
Improved citizens’ welfare through increased government revenue accountability and the maximization of public resources.

See action plan for milestone activities.

IRM Midterm Status Summary

3. Adoption of common reporting standards for Nigeria’s tax and non-tax revenue systems

Main Objective

“To establish transparent, fair and efficient tax systems that will aid the generation of substantially more domestic revenue for the improvement of citizens’ welfare.”


  1. Issuance of directives to relevant stakeholders for compliance with Common Reporting Standards.
  2. Sensitization of corporate organizations on the content and requirements of Common Reporting Standards.
  3. Review and enforcement of penalties for non-compliance to standards.
  4. Closing of legal loopholes across all agencies hindering the revenue generation ecosystem.
  5. Review extant customs and excise laws to bring in line with current global practices – NCS.
  6. Obtain the universe of manufacturing companies and ascertain compliance with excise payment – NCS.
  7. Review IDEC policies and exemption and digitalize/automate processes – NCS.

Editorial Note: For the complete text of this commitment, please see Nigeria’s action plan at

Commitment Analysis

This commitment’s goal is to increase revenue through an improved tax system that prevents evasion and abuse. Tax evasion in Nigeria places a significant burden on the country’s public finance system. The country’s tax-to-GDP ratio stood at 5.7% in 2017, [47] the lowest rate of 26 countries in Africa (with an average rate of 17.2%). [48] This commitment is carried forward from commitment 4 of Nigeria’s 2017–2019 national action plan. Under the previous action plan, one of the main achievements was the signature of the Common Reporting Standard Multilateral Competent Agreement on Automatic Exchange (MCAA) of Financial Account Information and Intended First Information Exchange Date. [49] Nigeria signed The Multilateral Competent Agreement (MCA) on Country-by-Country Reporting. [50] It also issued the Income Tax (Country-by-Country Reporting) Regulations 2018 ("CbC Regulations") [51] and the Income Tax (Common Reporting Standard) Regulations in July 2019. [52] The agreements and regulations permit Nigeria the exchange of financial information with other tax jurisdictions that are signatories automatically and facilitate tax management. Authorities have access to tax information that allows for the detection of tax evasion. [53] That said, Nigeria has not yet signed the Addis Tax Initiative (ATI) declaration. [54]

Under the current action plan, this commitment includes seven milestones, three of which continue from the previous action plan (Milestones 1,2,3). The commitment’s three first activities are geared toward complying with the Common Reporting Standards (CRS) [55] through sensitization workshops, penalties, and directives. The commitment’s new activities (Milestones 4 through 7) seek to review legislation on customs, close loopholes across agencies affecting revenue collection, and encourage compliance with excise payments by tracing the number of manufacturing companies.

This commitment is not relevant to any of the OGP values. While most of the commitment’s activities aim to enforce legislation and impose penalties for the purpose of improved revenue collection, it is not clear whether any information will be publicly disclosed.

If fully implemented, this commitment could have a minor potential impact on improving Nigeria’s tax system. The country has legislation to stem tax evasion [56] with severe penalties against criminal offenses (smuggling) but minimal sanctions against administrative misconduct (underreporting and untimely reporting). [57] Enforcement of this legislation has been weak. Powerful political entities have benefited from tax exemptions in the oil, mineral, gas, manufacturing, and agriculture sectors, leading to a reduction of the tax base for custom duties. [58] Revenue collection is constrained by smuggling, underreporting, and corruption among officials and importers. [59] Only 9% of companies comply with their tax obligations, [60] and 12% pay VAT. [61] Estimates suggest  that more than 99% of small businesses are unregistered, with considerable tax evasion among the wealthiest. [62]

The commitment is clear enough and gives a general description of the expected outcomes and goals, although more information on the specific changes to the excise laws and the mechanisms to be used to close loopholes between agencies would help assess the scope of the intended change. The objective of increasing government revenue could be achieved through the improvement of the Nigeria Custom Service’s capacity of revenue collection through the review of legislation and policies applicable to excise and customs. Most of the commitment’s new activities will target customs and excise revenue, which accounted for more than 13% of the country’s total tax revenue in 2017. [63]

In terms of common reporting standards, experts have suggested that the lack of a law that supports the legal status of the regulations adopted under the framework of the MCAA and the MCA treaties might prevent their implementation. [64] The Common Reporting Standards will be effective as long as tax authorities can interpret information and detect potential cases of tax evasion. [65] The commitment seems to address this issue through the sensitization workshops on the content of the Common Reporting Standards. Overall, the commitment’s potential impact is limited by not including a full tax reform and by providing an uncertain scope for the specific changes to the custom and excise laws and policies.

A sound tax and income revenue system is essential for good governance. However, without specific actions that could lead to advancing access to public information, citizen engagement, or public accountability, initiatives to improve tax administration could be continued outside of the OGP framework. Studies indicate that Nigeria’s tax legal framework is complex for both users and civil servants, highlighting the need for tax law simplification. [66] In some cases, citizens’ justification for not paying taxes stems from concern that funds will be diverted from public services. [67] In that regard, the government could make implementing tax reforms a priority – simplification, elimination of tax exemptions, incentives, waivers – while also adopting strategies to change citizen’s reluctance to pay taxes. In future action plans, the government could develop the transparency of tax collection and revenue use and support dialogue on how taxation translates into concrete improvements to citizens’ living conditions.

[47] “Revenue Statistics in Africa 2019 ─ Nigeria”, OECD, 2019, in
[48] “Revenue Statistics in Africa 2019 ─ Nigeria”, OECD, 2019, in
[49] “Signatories of the multilateral competent authority agreement on automatic exchange of financial account information and intended first information exchange date. Status as of 24 December 2019”, OECD,, and “Nigeria 2019-2021 National Action Plan”, Open Government Partnership,, p.10.
[50]  “CbC reporting regulations issued”, Deloitte, 20 June 2018, in, and “Nigeria 2019-2021 National Action Plan”, Open Government Partnership,, p.10.
[51] “Nigeria Issues The Income Tax (Country-By-Country Reporting) Regulations 2018”, Deloitte, 22 January 2018, in Also, see “Country by Country Reporting”, Federal Inland Revenue Service, The regulations can be found here: Income Tax (Country-by-Country Reporting) Regulations 2018, Federal Republic of Nigeria, Official Gazette, 8 January 2018,
[52] Income Tax (Common Reporting Standards) Regulations 2019 Federal Republic of Nigeria, Official Gazette, 8 July 2019 in
[53] “FIRS Releases Income Tax (Common Reporting Standard) Regulations 2019”,  Andersen Tax, 19 September 2019, in
[54] ATI Members, ATI Partner Countries in
[55] The CRS are set of tools that allow for exchange of financial information between tax authorities of countries signatories to the Multilateral Competent Authority Agreement on Automatic Exchange (MCAA) of Financial Account Information and Intended First Information Exchange Date. See “How Nigeria's Common Reporting Standard Regulations will affect banks, insurance companies, asset managers and other financial institutions”, PWC Nigeria, 10 January 2020, in
[56] Serah Sanni, “Nigeria: Basic Principles Of Taxation In Nigeria,” Monday, 2 December 2019, in
[57] Muritala Adeniji, “THE ROLE OF CUSTOMS SERVICES IN TRADE FACILITATION Comparison between Nigeria and Finland,” CENTRIA UNIVERSITY OF APPLIED SCIENCES, May 2018, in Page 18.
[58] Sanjeev Gupta, “ Scope for a Grand Bargain to Reduce Tax Exemptions?”, Center for Global Development, 7 January 2020, in
[59] Festus O. Egwaikhide, “Nigeria’s Low Tax Collection and Poor Quality of Government Expenditure: Political and Administrative Impediments to Improvement,” CGD Policy Paper 162 December 2019, Center for Global Development, in, Page 19.
[60] Jonathan Fiawoo, “Closing Africa’s Tax Revenue Gap,” The Globalist, 12 July 2018,
[61] Jonathan Fiawoo, “Closing Africa’s Tax Revenue Gap,” The Globalist, 12 July 2018,
[62] Jonathan Fiawoo, “Closing Africa’s Tax Revenue Gap,” The Globalist, 12 July 2018,
[63] Own calculations, with OECD data. “Details of Public Revenues – Nigeria,” in
[64] Olaleye Adebiyi and Ogochukwu Isiadinso, “Nigeria: An Overview Of The Income Tax (Common Reporting Standard) Regulations 2019,” Andersen Tax LP, in Mondaq, 19 October 2019,
[65] Seun Adu, “PwC’s Transfer Pricing Series. The Common Reporting Standard – Your foreign bank account could be coming to Nigeria,” PWC, in
[66] Edori Daniel Simeon, Edori Iniviei Simeon, Idatoru Alapuberesika Roberts. “Issues and Challenges Inherent in the Nigerian Tax System.” American Journal of Management Science and Engineering. Vol. 2, No. 4, 2017,  p.55.
[67] “Nigeria: Why is it struggling to meet its tax targets?” BBC News, 8 September 2019, in


Open Government Partnership