The Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, announced that manufacturing companies in Nigeria suffered losses amounting to approximately N1.7 trillion in 2023 due to the depreciation of the naira.
This statement was made during an interactive session with the Senate Committee on Finance at the National Assembly Complex in Abuja.
Addressing the committee, Adedeji clarified that these losses were not due to tax fines, as some speculated, but were directly linked to the country’s currency depreciation.
Adedeji emphasized the significant impact on the nation’s tax revenue, explaining that the losses reported by these companies would hinder the government’s ability to collect taxes from them until they recover financially.
“I don’t know if anybody followed the situation last year, but all manufacturing entities in Nigeria reported total losses of N1.7 trillion solely due to forex issues. This affects the government because, according to our laws, we cannot collect any taxes from these companies until they recover these losses, which could take up to ten years or more,” Adedeji stated.
The FIRS Chairman highlighted the broader economic implications, noting that even if these companies return to profitability in the near future, they will offset any profits with the losses carried forward.
This situation poses a challenge to the government’s efforts to increase tax revenue amidst the country’s ongoing economic challenges.
