Nigeria’s tax revenue has more than doubled in less than three years, rising from N12.3tn in 2023 to N27.1tn by July 2026, according to an internal report by the Nigeria Revenue Service (NRS).
The 113 per cent increase, the revenue authority said, was driven largely by the digitisation of tax administration, the implementation of four new tax reform laws, the restructuring of the revenue service and an executive order designed to block leakages and close loopholes in the tax system.
The NRS, in its assessment of the Nigerian economy, said the sharp growth in tax receipts was among several indicators suggesting that the economy was gradually recovering from the severe macroeconomic pressures that followed the early reforms of the President Bola Tinubu administration.
The revenue authority said the country had moved from what it described as “acute macroeconomic distress” towards a more stable and increasingly resilient economic position.
“Tax collections more than doubled from N12.3tn in 2023 to N27.1tn as of July 2026 with the digitisation of tax systems, four new tax reform laws, the transformation of the revenue service and an executive order that closed loopholes in the system,” the report stated.
The NRS attributed the improvement to the administration’s economic reform programme under the Renewed Hope Agenda, saying the government had inherited four major structural distortions that had weakened public finances and constrained economic growth.
These, it said, included an unsustainable petrol subsidy regime, an opaque foreign exchange system that discouraged investment, an underperforming oil sector and a tax base that remained significantly below its potential.
The revenue service acknowledged that the initial phase of the reforms created considerable economic hardship but argued that several major indicators had since begun to point towards an improvement in the country’s economic fortunes.
Among the developments it highlighted were lower inflation, a reversal in the balance of payments position, increased crude oil production, stronger foreign reserves and the emergence of Nigeria as a net exporter of petroleum products.
Oil production, refining gains
The NRS said the government’s naira-for-crude arrangement with the Dangote Petroleum Refinery and other domestic refineries had contributed significantly to the changing structure of Nigeria’s petroleum trade.
It said the policy had helped the country move away from decades of dependence on imported refined petroleum products towards becoming a net exporter.
Ghana, the report noted, had also recently indicated plans to adopt a similar approach in its petroleum sector.
Crude oil production was said to have increased 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 production level, according to the report, represented 104 per cent of Nigeria’s OPEC quota.
The increase is particularly important to government finances because crude oil remains a major source of foreign exchange earnings and public revenue.
Capital market rebounds
The revenue service also pointed to the performance of the Nigerian capital market as evidence of renewed economic confidence.
It said the market capitalisation of the Nigerian Exchange rose from N30.36tn in 2023 to N161tn in 2026.
The NRS attributed the growth partly to improved macroeconomic credibility, the recapitalisation of banks and the expansion of domestic institutional investment.
According to the report, the stronger market performance had also created wealth for millions of Nigerians participating in the equities market.
External reserves similarly recorded substantial growth during the period under review.
The NRS said unrestricted external reserves increased from $3.99bn in 2023 to $51.9bn by July 2026, describing the figure as a 17-year high.
Nigeria’s balance of payments also swung from a deficit of $3.34bn to a surplus of $2.38bn in the first quarter of 2026.
The country’s trade balance recorded a similar improvement, moving from a marginal surplus of N44.7bn to N7.55tn in the first quarter of 2026.
The composition of exports also changed during the period, with exports of non-crude oil products increasing by 51 per cent year-on-year to N6.78tn in the first quarter.
Foreign investment increases
The report further identified stronger capital inflows as another sign of improving investor sentiment.
Annual capital importation increased from $3.9bn in 2023 to $23.22bn in 2025, while inflows reached $10.37bn in the first quarter of 2026 alone.
Foreign portfolio investment accounted for a significant proportion of the inflows, although foreign direct investment also recorded an improvement.
The NRS said the increase suggested that investors were becoming more confident in the Nigerian economy as the reforms reshaped the business environment.
CNG adoption expands
The revenue authority also highlighted the expansion of the compressed natural gas programme introduced following the removal of the petrol subsidy.
According to the report, Nigeria had no large-scale CNG programme three years ago and was heavily dependent on imported petrol and diesel.
By 2026, however, more than 100,000 vehicles had reportedly been converted to CNG, while investments exceeding $2bn had been mobilised and more than 10,000 jobs created.
The NRS estimated that switching from petrol to CNG could reduce vehicle running costs by between 40 and 60 per cent.
It cited the experience of some commercial drivers whose monthly fuel expenditure reportedly dropped from about N50,000 to N18,000 after converting their vehicles to CNG.
Agriculture and food security
On agriculture, the NRS recalled that the Tinubu administration declared a state of emergency on food security in July 2023 and subsequently introduced a number of measures to boost food production.
These included the release of strategic grain reserves, the establishment of a N100bn National Agricultural Development Fund, fertiliser distribution and an agricultural mechanisation programme.
Federal agricultural allocation rose from N228.4bn in 2023 to N826.5bn in the 2025 budget, the report said.
The revenue authority, citing the Ministry of Agriculture, also said food prices had declined by about 50 per cent by March 2026.
However, it cautioned that the impact of increased government support would take several planting seasons to translate fully into higher agricultural output.
Debt rises, ratio falls
The NRS acknowledged that Nigeria’s total public debt had increased substantially, rising from N87.4tn in 2023 to N159.28tn by late 2025.
However, it argued that the size of the debt should be assessed in relation to the country’s economic output rather than in isolation.
According to the report, Nigeria’s debt-to-GDP ratio declined from 38 per cent in 2023 to 35.5 per cent in 2025 and 32.3 per cent in 2026.
The revenue service described the decline as the first sustained reduction in the ratio in more than a decade.
It also said debt servicing as a share of government revenue had fallen from 68 per cent to an International Monetary Fund-projected 53 per cent.
Reform gains
The NRS said the combination of stronger tax receipts, higher crude oil production, increased capital inflows, rising foreign reserves and improved trade and balance of payments positions indicated that Nigeria was gradually emerging from the severe economic pressures triggered by the early phase of the government’s reforms.
It nevertheless acknowledged that the improvement had come at the cost of what it described as “painful” economic adjustments.
The revenue authority stressed that sustaining the gains would require continued implementation of the reforms, arguing that the improvements in key economic indicators should be consolidated through further policy consistency and structural changes.
With tax receipts already reaching N27.1tn by July 2026, the NRS said the performance of the tax system remained one of the clearest indications of the government’s drive to expand non-oil revenue and strengthen the country’s fiscal position.
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