Nigeria’s tax revenue has recorded a significant increase, rising by 113 per cent from ₦12.3 trillion in 2023 to ₦27.1 trillion as of July 2026, according to a report by the Nigeria Revenue Service (NRS).
The substantial growth comes against the backdrop of sweeping reforms in Nigeria’s tax system, including the implementation of new tax legislation, increased digitalisation of tax administration and stronger compliance and enforcement measures.
Digitalisation Drives Revenue Growth
According to the report, the transformation of Nigeria’s tax administration has been a major factor behind the increase in collections. The NRS has continued to deploy digital tools and data-driven processes aimed at improving taxpayer registration, filing, payment, monitoring and enforcement.
The increasing use of technology is expected to reduce revenue leakages, improve transparency and make it easier for the tax authority to identify taxpayers and economic activities that previously operated outside the formal tax system.
The ongoing transition towards electronic invoicing and other digital compliance systems is also expected to strengthen the NRS’s ability to track transactions and improve the accuracy of tax assessments.
Tax Reforms Strengthen the Revenue System
The revenue increase also coincides with the implementation of Nigeria’s new tax reform framework. The reforms seek to simplify the tax system, improve compliance and create a more efficient revenue administration structure.
The transformation from the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service represents another important component of the reform programme, with the NRS assuming a broader mandate for federal tax administration.
The government has also introduced measures designed to close loopholes, improve collection efficiency and expand the tax base rather than relying solely on increases in tax rates.
Broader Economic Improvements
The NRS report highlighted other economic indicators that it said point to improvements in Nigeria’s economic position.
According to the report, NGX market capitalisation increased significantly between 2023 and 2026, while external reserves also recorded substantial growth. The country’s balance of payments reportedly moved from a deficit to a surplus, while the trade balance improved considerably.
Crude oil production also increased during the period, providing additional support for government revenues and the wider economy.
Implications for Businesses
The increase in tax collections signals a changing environment for businesses operating in Nigeria. With greater digitalisation and access to taxpayer data, businesses are likely to face increased scrutiny of their tax affairs.
Companies will therefore need to strengthen their tax governance, maintain accurate financial records and ensure timely compliance with filing and payment obligations.
For tax professionals, the reforms also mean that traditional approaches to tax compliance are increasingly being replaced by technology-driven administration, data analytics and real-time monitoring.
Sustainability Remains Key
Although the 113 per cent increase in tax revenue is significant, the sustainability of the growth will be important. Revenue performance must be considered alongside inflation, exchange-rate movements, economic growth and the capacity of businesses and individuals to meet their tax obligations.
The ultimate measure of the reforms will not only be how much revenue the NRS collects, but also whether Nigeria can achieve a broader, fairer and more efficient tax system while improving voluntary compliance and taxpayer confidence.
The reported rise to ₦27.1 trillion therefore represents an important milestone for Nigeria’s fiscal reforms. However, maintaining this momentum will require continued investment in digital infrastructure, taxpayer education, institutional capacity and transparent tax administration.
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