Nigeria’s tax revenue rises 113% to N27.1trn in three years – NRS

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 (NRS).

The figure represents a 113 per cent increase and was attributed to the digitisation of tax administration, the implementation of four new tax reform laws, restructuring of the revenue service and an executive order aimed at blocking leakages in the tax system.

The NRS disclosed this in an internal report on the state of the Nigerian economy.

The revenue agency said the development was among several indicators suggesting that Nigeria was gradually moving away from the severe macroeconomic pressures that followed the implementation of major reforms by President Bola Tinubu’s administration.

“Tax collections more than doubled from N12.3tn in 2023 to N27.1tn as of July 2026,” the report stated, attributing the increase to reforms in tax administration and the closure of loopholes in the system.

The NRS linked the improvement to the Tinubu administration’s economic policies under the Renewed Hope Agenda, saying the government inherited several structural challenges that had weakened public finances and constrained economic growth.

It identified the major problems as the financially unsustainable petrol subsidy regime, an opaque foreign exchange system, underperformance in the oil sector and a tax base that was significantly below its potential.

According to the agency, the initial phase of the reforms resulted in considerable economic hardship but has since been followed by improvements in several key indicators.

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

The report also highlighted changes in the petroleum sector, particularly the government’s naira-for-crude arrangement with the Dangote Petroleum Refinery and other domestic refineries.

The NRS said the policy had contributed to Nigeria’s transition from a major importer of refined petroleum products to a net exporter after decades of dependence on imports.

It added that crude oil production had risen from between 1.2 million and 1.3 million barrels per day in 2023 to 1.73 million barrels per day by July 2026.

The latest output, according to the report, represented about 104 per cent of Nigeria’s OPEC quota.

The agency said higher oil production remained significant to public finances because crude oil continues to be a major source of foreign exchange and government revenue.

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

The country’s balance of payments, which stood at a $3.34bn deficit, also moved into a $2.38bn surplus in the first quarter of 2026.

Similarly, the trade balance improved from a marginal N44.7bn surplus to N7.55tn during the same period.

The report said non-crude oil exports also recorded significant growth, with exports of other petroleum products rising by 51 per cent year-on-year to N6.78tn in the first quarter of 2026.

The NRS further pointed to developments in the capital market as evidence of improved investor confidence.

According to the report, the market capitalisation of the Nigerian Exchange rose from N30.36tn in 2023 to N161tn in 2026.

It attributed the growth partly to improved macroeconomic confidence, bank recapitalisation and increased participation by domestic institutional investors.

Capital importation also increased from $3.9bn in 2023 to $23.22bn in 2025, while inflows reached $10.37bn in the first quarter of 2026 alone.

The NRS said the increase reflected stronger investor confidence, with foreign portfolio and direct investments both recording improvements.

The revenue service also highlighted the expansion of the compressed natural gas programme following the removal of petrol subsidy.

It said more than 100,000 vehicles had been converted to CNG by 2026, with over $2bn in investment reportedly mobilised and more than 10,000 jobs created.

According to the report, CNG could reduce vehicle running costs by between 40 and 60 per cent compared with petrol.

The NRS also cited the government’s food security interventions, including the declaration of a state of emergency on food security in July 2023, release of strategic grain reserves, fertiliser distribution, agricultural mechanisation and the establishment of a N100bn National Agricultural Development Fund.

Federal agricultural allocations reportedly increased from N228.4bn in 2023 to N826.5bn in the 2025 budget.

The report, however, noted that agriculture would require several planting seasons before increased government investment could fully translate into higher production.

On public debt, the NRS acknowledged that Nigeria’s total debt stock increased from N87.4tn in 2023 to N159.28tn in late 2025.

It nevertheless argued that the debt-to-GDP ratio provided a better measure of the country’s debt burden.

According to the report, the ratio fell from 38 per cent in 2023 to 35.5 per cent in 2025 and 32.3 per cent in 2026.

The agency described the decline as the first sustained reduction in the debt-to-GDP ratio in more than a decade.

It also said debt servicing as a proportion of government revenue had declined from 68 per cent to an International Monetary Fund-projected 53 per cent.

The NRS said the combination of increased tax revenue, higher oil production, stronger capital inflows, rising reserves and improved trade and balance of payments figures indicated that the economy was gradually recovering from the pressures associated with the government’s early reforms.

However, the revenue agency acknowledged that the gains had come after what it described as “painful” adjustments and stressed that sustained implementation of the reforms would be necessary to consolidate the recovery.