The Federal Inland Revenue Service has defended the Federal Government’s borrowing plan, stating that debt is a legitimate component of every national budget.
FIRS Chairman, Zacch Adedeji, emphasized that borrowing is not a problem, but rather a normal part of a country’s economic ecosystem.
Adedeji explained that when the government borrows from banks, it pays interest, which enables banks to pay salaries and taxes to state governments. He noted that borrowing for infrastructure projects, such as roads, is a sustainable economic strategy, as future tax collections from those who use the facilities help repay the debt.
The FIRS boss highlighted that the current borrowing process is transparent and within the confines approved by the National Assembly. He contrasted this with past practices, stating that the present administration has halted the controversial “Ways and Means” advances from the Central Bank and is now servicing debt through both principal and interest repayments.
This approach, Adedeji argued, has contributed to stability in the economy and eased pressure on the exchange rate. He also confirmed that Personal Income Tax and Company Income Tax reforms would take effect from January, aiming to expand Nigeria’s revenue base and reduce overreliance on borrowing.
The FIRS reports significant revenue growth, with non-oil collections reaching N1.06 trillion and federal revenue collection surging to N3.64 trillion in September 2025. The tax reforms will be rolled out to enhance fiscal efficiency and competitiveness, including harmonizing subnational levies and introducing a presumptive tax system for informal sectors.
The government’s borrowing plan is part of its economic strategy to drive growth and development. Adedeji emphasized that borrowing is a normal practice globally, essential for fueling the broader economic ecosystem.