The Nigeria Revenue Service (NRS), formerly known as the Federal Inland Revenue Service, has set a ₦40.7 trillion revenue target for the 2026 fiscal year following its record ₦28.3 trillion collection in 2025.
The new benchmark represents a sharp increase from the previous year’s performance and reflects the agency’s confidence in sustained revenue expansion driven largely by non-oil tax receipts.
The ₦28.3 trillion realised in 2025 represents the highest annual collection in the Service’s history and exceeded the ₦25.5 trillion generated in 2024, reinforcing a steady upward trajectory in domestic revenue mobilisation.
Senior officials disclosed that a significant portion of last year’s collections was sourced from the non-oil sector, underscoring the structural shift in Nigeria’s fiscal framework.
The emphasis on non-oil revenue has become central to the government’s strategy to reduce reliance on crude oil earnings and stabilise public finances amid global commodity volatility.
The ₦40.7 trillion projection for 2026 is expected to be supported by stronger contributions from Company Income Tax (CIT), Value Added Tax (VAT), and the Development Levy.
Royalty-based income streams are also anticipated to contribute to overall growth, alongside enhanced compliance monitoring and enforcement measures.
The agency’s leadership has indicated that operational efficiency, transparency, and accountability will remain critical pillars as staff are urged to raise performance levels in line with the expanded target.
The revenue outlook is closely tied to recent tax reform legislation signed into law on June 26, 2025, by Bola Tinubu.
The reform package introduced four major statutes: the Nigeria Tax Act, the Nigeria Revenue Service (Establishment) Act, the Nigeria Tax Administration Act, and the Joint Revenue Board (Establishment) Act.
Together, these laws represent the most comprehensive overhaul of Nigeria’s tax architecture in decades.
The Nigeria Tax Act consolidates multiple legacy tax laws into a unified framework designed to modernise the country’s fiscal system and reduce fragmentation.
The previous legal foundation of the tax authority was repealed, formally establishing the NRS as the central body responsible for assessment, collection, accounting, and enforcement of federally collectible taxes and designated revenues.
The reforms are expected to broaden the tax base, improve digital compliance mechanisms, strengthen dispute resolution processes, and enhance coordination across tiers of government.
Policymakers believe that streamlining tax administration and introducing modern enforcement tools will encourage higher compliance and bring more businesses and individuals into the formal tax net.
If realised, the ₦40.7 trillion target would mark one of the most aggressive annual revenue expansions in Nigeria’s fiscal history.
The projection signals confidence in the evolving tax framework and the resilience of the non-oil economy.
However, the scale of the target also raises expectations regarding fiscal transparency and the efficient deployment of public funds.
As collections continue to rise, scrutiny will intensify over how increased revenue translates into improved public services, infrastructure development, healthcare delivery, education funding, and debt sustainability.
