Tax Revenue Hits N27.1tn as Nigeria’s Collections Surge 113% in Three Years

Nigeria’s tax revenue has more than doubled in less than three years, rising 113 per cent from N12.3tn in 2023 to N27.1tn as of July 2026, according to the Nigeria Revenue Service.

The revenue authority attributed the increase to the digitisation of the tax system, the implementation of four new tax reform laws, the transformation of the revenue service and an executive order aimed at closing loopholes in tax collection.

The report said the increase in tax receipts was among several indicators suggesting that Nigeria was gradually moving away from the severe macroeconomic pressures that followed the implementation of major economic reforms by the President Bola Tinubu administration.

“Tax collections more than doubled from N12.3tn in 2023 to N27.1tn as of July 2026,” the NRS said, attributing the increase to the digitisation of tax systems, new tax laws, the transformation of the revenue service and measures to close loopholes.

The revenue service said the reforms were beginning to produce improvements across key areas of the economy, although it acknowledged that the initial adjustment period created significant economic difficulties.

Tax Revenue Rises As Government Targets Wider Tax Base

The NRS identified four fiscally unsustainable petrol subsidy regime, an opaque foreign exchange system, underperforming oil production and a tax base that remained below its potential.

The revenue authority argued that addressing these structural weaknesses had helped strengthen government finances and improve the operating environment for businesses and investors.

The increase in tax collections is particularly significant for Nigeria as the government seeks to reduce its reliance on crude oil revenues and strengthen non-oil sources of public finance.

The N27.1tn collected by July 2026 represents more than twice the N12.3tn recorded in 2023, highlighting the scale of the revenue expansion within the period.

The NRS also pointed to higher crude oil production as another major development supporting government revenues and external liquidity.

According to the report, crude oil production increased from about 1.2 million-1.3 million barrels per day in 2023 to 1.73 million bpd by July 2026.

The latest output was equivalent to 104 per cent of Nigeria’s OPEC quota, according to the revenue service.

Higher crude production is important for Nigeria because oil remains a major source of foreign exchange earnings and government revenue.

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

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

Capital Market Value Jumps to N161tn

Nigeria’s capital market also recorded substantial growth during the period, according to the report.

The NRS said the market capitalisation of the Nigerian Exchange rose from N30.36tn in 2023 to N161tn in 2026.

It attributed the expansion partly to improved macroeconomic credibility, bank recapitalisation and the growing participation of domestic institutional investors.

The increase in market capitalisation has also boosted the value of equity holdings for investors, although market capitalisation does not represent direct government revenue or necessarily translate into realised wealth for all investors.

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 alone, according to the NRS.

The revenue service said foreign portfolio investment remained particularly strong, while foreign direct investment also improved.

The NRS further highlighted the government’s naira-for-crude arrangement with the Dangote Petroleum Refinery and other domestic refineries as a major development in the downstream petroleum sector.

The arrangement, it said, contributed to Nigeria’s transition from a major importer of refined petroleum products to a net exporter.

The development marks a significant shift for an economy that historically relied heavily on imported petrol and diesel despite being one of Africa’s largest crude oil producers.

The report said Ghana had also recently indicated plans to pursue a similar policy in its petroleum sector.

The government’s compressed natural gas programme was also highlighted as part of the response to the removal of petrol subsidies.

According to the NRS, 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.

The revenue service estimated that CNG could reduce vehicle running costs by between 40 per cent and 60 per cent compared with petrol.

It said some commercial drivers had reduced their monthly fuel expenditure from about N50,000 to N18,000 after switching to CNG.

The expansion of CNG infrastructure is part of the government’s broader attempt to reduce the impact of higher petrol prices following subsidy removal while encouraging the use of Nigeria’s abundant gas resources.

The NRS also pointed to increased government spending on agriculture following the declaration of a state of emergency on food security in July 2023.

Measures introduced included the release of strategic grain reserves, fertiliser distribution, agricultural mechanisation and the establishment of a N100bn National Agricultural Development Fund.

Federal agricultural allocation increased from N228.4bn in 2023 to N826.5bn in the 2025 budget, according to the report.

The revenue service, citing the Ministry of Agriculture, said food prices had declined by about 50 per cent by March 2026.

However, it acknowledged that agriculture would require several planting seasons before increased government support translates fully into higher output.

Debt Stock Rises Despite Lower Debt-To-GDP Ratio

Nigeria’s total debt stock increased from N87.4tn in 2023 to N159.28tn in late 2025, according to the NRS report.

The revenue authority, however, argued that the debt-to-GDP ratio provides a more useful measure of debt sustainability than the nominal debt figure alone.

It said the ratio declined from 38 per cent in 2023 to 35.5 per cent in 2025 and 32.3 per cent in 2026.

The NRS described the decline as the first sustained reduction in the ratio in more than a decade.

Debt servicing as a proportion of government revenue also fell from 68 per cent to an estimated 53 per cent projected by the International Monetary Fund, according to the report.

Despite the improvements highlighted in the report, the NRS acknowledged that the economic adjustment had come at a significant cost.

The removal of the petrol subsidy, foreign exchange reforms and other policy changes initially increased pressure on households and businesses through higher prices and operating costs.

The revenue authority nevertheless maintained that continued implementation of the reforms would be necessary to consolidate the gains.

The broader economic indicators cited by the NRS, including higher tax collections, increased oil production, stronger external reserves, improved trade and balance of payments positions and higher capital inflows, suggest a significant improvement in some of Nigeria’s headline macroeconomic metrics.

However, the durability of the recovery will depend on whether stronger government revenues and foreign exchange liquidity translate into sustained investment, lower inflation, improved productivity and better living standards.