Nigeria's tax revenue experienced a significant surge of 49%, reaching N15.8 trillion in the first five months of 2026, compared to N10.6 trillion in the corresponding period of 2025. This performance outpaced government projections, largely attributed to sweeping tax reforms and new levies imposed on key sectors like petroleum and mining.
The Nigeria Revenue Service (NRS) is targeting N40.7 trillion in revenue for the 2026 fiscal year, leveraging digital tax expansion and enhanced non-oil revenue mobilization efforts. The strong collection figures reflect the early impact of Nigeria's ongoing fiscal reforms aimed at broadening the nation's revenue base.
Both oil and non-oil sectors contributed to the improved revenue. Oil-related taxes increased by over 20% to N3.96 trillion, influenced by higher crude oil prices. Non-oil revenue saw a 12.3% rise to N8.2 trillion, indicating stronger collections across various economic sectors. These figures exclude proceeds from revised personal income tax rates implemented from January 1, 2026.
Value Added Tax (VAT) collections increased to N2.42 trillion in Q1 2026 from N2.06 trillion a year earlier, supported by improved compliance and expanding digital tax collections. However, Company Income Tax (CIT) stood at N1.37 trillion in Q1 2026, a decrease from N1.98 trillion in Q1 2025, according to the National Bureau of Statistics (NBS).
Fiscal analysts noted that the performance reflects both structural gains from reforms and cyclical pressures. Dr. Muda Yusuf of the Centre for the Promotion of Private Enterprise (CPPE) stated that the tax reforms are showing positive impacts, also noting the influence of rising oil prices due to geopolitical tensions.
Otunba Dele Oye, Chairman of Alliance for Economic Research and Ethics Ltd/GTE, urged a focus on the effective utilization of collected revenue for tangible economic and social benefits, emphasizing that sustained tax-to-GDP improvement requires visible public service delivery.
Meanwhile, the Federal Government has issued comprehensive guidelines to govern the transition from Nigeria’s repealed tax laws to the new tax framework, which took effect on January 1, 2026. These guidelines, released by the Federal Ministry of Finance, aim to clarify how tax obligations, audits, disputes, incentives, and filings spanning both old and new systems will be managed.
Liabilities, audits, investigations, disputes, and enforcement actions related to periods before the new regime's commencement will continue under the repealed tax laws. Similarly, tax returns for accounting periods ending before January 1, 2026, will be filed under the previous framework, while those ending on or after that date will be governed by the new laws.
A key provision ensures that existing tax incentives and exemptions granted under repealed laws remain valid until their expiration dates, providing reassurance to businesses and investors. However, new applications for tax incentives will be considered under the Tax Acts 2025.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, emphasized that the guidelines ensure a smooth migration without retrospective application of the new laws. He described the Tax Acts 2025 as a significant milestone, built on principles of clarity, fairness, and administrative certainty, aiming to support uniform implementation across all revenue authorities and tax practitioners.
The reforms, anchored on the Nigeria Revenue Service (Establishment) Act, the Nigeria Tax Act, the Nigeria Tax Administration Act, and the Joint Revenue Board (Establishment) Act, are intended to create a more efficient, transparent, and growth-oriented revenue system, strengthening voluntary tax compliance and improving Nigeria’s investment climate.
