Tax Revenue Hits N27tn After 113% Surge in Three Years

Nigeria’s tax revenue has more than doubled in less than three years, rising from N12.3tn in 2023 to N27.1tn as of July 2026, according to the Nigeria Revenue Service.

The revenue authority attributed the 113 per cent increase to the digitisation of the tax system, four new tax reform laws, the transformation of the revenue service and an executive order designed to close loopholes in tax collection.

In an internal report on the state of the Nigerian economy, the NRS said the country was moving from a period of severe macroeconomic distress towards greater economic stability following the implementation of reforms by the President Bola Tinubu administration.

The revenue service said the reforms addressed four major economic distortions inherited by the administration: the fiscally unsustainable petrol subsidy regime, an opaque foreign exchange system, poor performance in the oil sector and a tax base below its potential.

Although the initial impact of the reforms created significant economic difficulties, the NRS said key economic indicators had subsequently begun to improve.

It cited falling inflation, improved balance of payments, higher crude oil production, stronger foreign reserves, increased capital inflows and rising tax collections as evidence of an economic recovery.

The report said crude oil production increased from about 1.2 million to 1.3 million barrels per day in 2023 to 1.73 million barrels per day by July 2026, representing 104 per cent of Nigeria’s OPEC quota.

The NRS also highlighted the government’s naira-for-crude arrangement with the Dangote Petroleum Refinery and other domestic refineries, saying the policy had helped Nigeria move from being a net importer of petroleum products to a net exporter.

Nigeria’s external reserves also rose from $3.99bn in unrestricted reserves in 2023 to $51.9bn by July 2026, which the NRS described as a 17-year high.

The country’s balance of payments moved from a $3.34bn deficit to a $2.38bn surplus in the first quarter of 2026, while the trade balance increased from N44.7bn to N7.55tn during the same period.

The report further said annual capital importation rose from $3.9bn in 2023 to $23.22bn in 2025, while inflows reached $10.37bn in the first quarter of 2026.

The Nigerian Exchange also recorded a major increase in market capitalisation, rising from N30.36tn in 2023 to N161tn in 2026.

The NRS attributed the market growth partly to improved macroeconomic confidence, bank recapitalisation and increased domestic institutional investment.

The revenue service also pointed to the expansion of the compressed natural gas programme following the removal of the petrol subsidy. It said more than 100,000 vehicles had been converted to CNG by 2026, with over $2bn in investment mobilised and more than 10,000 jobs created.

On agriculture, the report said federal agricultural allocation increased from N228.4bn in 2023 to N826.5bn in the 2025 budget, alongside measures including fertiliser distribution, grain reserves and agricultural mechanisation.

The NRS also acknowledged that Nigeria’s total debt stock rose from N87.4tn in 2023 to N159.28tn in late 2025. However, it said the debt-to-GDP ratio fell from 38 per cent in 2023 to 32.3 per cent in 2026.

The revenue service maintained that higher tax collections, stronger oil production, rising reserves and increased capital inflows showed that Nigeria’s economy was gradually recovering from the pressures created by the early stages of the government’s reforms.

It nevertheless acknowledged that the gains followed painful economic adjustments and stressed that sustained implementation would be necessary to consolidate the recovery.