The Nigeria Revenue Service (NRS) has projected a record N40.7 trillion in tax revenue and royalties for 2026, a significant jump from the N28.23 trillion collected in 2025.
This projection reflects the impact of sweeping tax reforms aimed at consolidating revenue collection under the NRS and enhancing fiscal efficiency nationwide.
Executive Chairman of the NRS, Zach Adedeji, disclosed the figures during a roundtable in Abuja on Wednesday organized by the House of Representatives Committee on Appropriations for key stakeholders in the financial sector.
The meeting provided lawmakers an opportunity to review the agency’s 2025 performance and examine projected revenue for the new fiscal year.
Adedeji attributed the higher 2026 target to recent reforms transferring petroleum revenues, mineral royalties, and other federal collections to the NRS. “In light of these reforms, the total target is N40.7 trillion. We believe that with the support of the House, we will achieve this goal,” he said.
The 2025 fiscal year saw the NRS exceed expectations, collecting N28.23 trillion against a target of N25.2 trillion. This represented a 30.3 percent year-on-year growth compared to 2024, primarily driven by non-oil taxes. Adedeji emphasized that the reforms provide a more structured and efficient system for revenue mobilization, reducing the number of agencies involved in tax collection.
Backstory
The transformation stems from the Nigeria Revenue Service Establishment Act, 2025, which officially rebranded the Federal Inland Revenue Service (FIRS) into the NRS. The legislation, signed into law by President Bola Tinubu on June 26, 2025, consolidated federal tax administration under a single authority, limiting other agencies from collecting overlapping revenues. Taiwo Oyedele, Chairman of the Presidential Tax Committee, noted that the reforms were designed to allow about 60 federal agencies to focus on their core mandates rather than revenue collection.
This overhaul forms part of a broader strategy to modernize Nigeria’s tax administration and strengthen fiscal governance. By centralizing tax collection, the NRS aims to streamline compliance, reduce corruption, and provide a clear framework for accountability.
At the roundtable, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, highlighted the importance of the reforms in transitioning Nigeria from dependence on ad hoc financing, including the now-defunct subsidy system funded by the Nigerian National Petroleum Company Limited (NNPCL), to more sustainable, market-based fiscal mechanisms. “The reforms are intended to correct distortions, enhance transparency, and provide predictable revenue streams for national development,” Edun said.
Rep. Abubakar Bichi (APC–Kano), Chairman of the House Committee on Appropriations, emphasized the significance of legislative oversight in understanding the NRS’s projections. “This engagement allows us to study, consider, and approve the 2026 revenue targets. It is essential that Nigerians understand how these projections are derived and the impact of tax reforms on national finances,” he stated.
The reforms are expected to have far-reaching implications for Nigeria’s fiscal landscape. By consolidating petroleum royalties, mineral revenues, and other federal taxes under the NRS, the government aims to reduce leakage, enhance revenue predictability, and support economic growth initiatives. Analysts also suggest that this streamlined structure could encourage compliance among taxpayers by providing a clear and unified point of interaction for all federal taxes.
In addition to boosting revenue, the reforms align with Nigeria’s broader economic strategy of diversifying income sources beyond oil, promoting transparency, and enabling long-term fiscal sustainability. By increasing non-oil tax collections, the government can invest more effectively in infrastructure, healthcare, education, and other critical public services.
What You Should Know
- The NRS is now Nigeria’s central revenue authority, replacing FIRS.
- 2026 revenue target: N40.7 trillion, up from N28.23 trillion in 2025.
- Tax reforms transferred petroleum and mineral royalties to the NRS.
- Reforms aim to centralize tax collection, reduce agency overlap, and improve compliance.
- Fiscal strategy includes transitioning from subsidy-dependent financing to market-based solutions.
The NRS’s ambitious target reflects Nigeria’s ongoing efforts to modernize its tax system, enhance fiscal discipline, and promote inclusive economic growth through efficient revenue collection.
