Nigeria’s tax overhaul boosts revenue by 49%

Nigeria’s fiscal position strengthened sharply in the first five months of 2026, with total tax revenue rising 49 percent year-on-year to N15.8 trillion, driven by early gains from recently introduced tax reforms and higher oil-related receipts.

Tax revenue collected by the Nigeria Revenue Service rose to N15.8 trillion from N10.6 trillion in the same period last year, according to official fiscal data. The figure not only outpaced the baseline growth target of 11.6 percent but also signals early gains from Nigeria’s ongoing overhaul of its tax architecture aimed at expanding non-debt revenue and improving compliance.

The revenue surge reflects Nigeria’s ongoing attempt to rebuild its tax system after a sweeping overhaul of fiscal laws aimed at lifting the tax-to-GDP ratio to 18 percent by 2030, up from about 13 percent.

The ambition is to reduce reliance on borrowing and expand non-oil revenue capacity in an economy where fiscal space remains tight.

Oil-related taxes provided one of the strongest boosts in the period. Collections rose more than 20 percent to N3.96 trillion, supported by higher global crude prices during a period of geopolitical tension in the Middle East. As Africa’s largest crude exporter, Nigeria’s fiscal accounts remain highly sensitive to oil price movements, and the latest figures show that exposure is still doing significant heavy lifting.

Non-oil revenue also improved, rising 12.3 percent to N8.2 trillion. This points to early effects of tighter enforcement, broader compliance measures, and adjustments linked to new tax provisions introduced under the reform programme.

• Nigeria imports its own fuel as Dangote-Lomé trade surges
• Nigeria’s overdue technical correction wipes N8.24trn off stocks post-T+1
• PETROAN demands fuel price cuts as Brent falls below $80

The reforms include new levies across petroleum operations, mining, and selected corporate activities, introduced as part of a broader effort to simplify Nigeria’s fragmented tax structure and widen the revenue base. These measures are already filtering into collections, according to the fiscal data.

The figures exclude personal income tax collected by state governments, which began operating under a revised administrative arrangement in January. That means the reported federal performance does not yet capture the full impact of the decentralised income tax system.

In addition, the federal government recently released transitional guidelines for the implementation of four new tax laws that came into effect this year. The guidelines are designed to manage the shift to the new regime and ensure that the laws are applied prospectively rather than retroactively, according to Finance Minister Taiwo Oyedele.

The combination of stronger oil receipts and early-stage tax reforms has created a noticeable step-up in revenue performance in the short term. But the underlying structure of Nigeria’s fiscal system has not fundamentally changed yet: oil still anchors a large share of inflows, while non-oil growth, though improving, remains in transition.

What will matter next is whether non-oil collections can sustain momentum once oil prices stabilise and transitional effects from the new tax regime fade. That will determine whether the current surge reflects a durable shift or a cyclical spike amplified by commodity conditions.

Ayomide Odunlami

Ayomide Odunlami is a Tax Reporter at BusinessDay, covering Nigeria’s tax reforms, compliance trends, and government revenue strategies. She reports on how evolving tax policies affect businesses, investors, and the broader economy, providing clarity on complex regulatory issues through data-driven journalism.

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp