The surge in tax revenue

• This should impact infrastructural development to be meaningful

From what could only have been a dream barely 28 months ago, the Federal Government’s push for fiscal restructuring is not only powering on, but has surpassed expectations in delivery. Monthly revenue collection, according to the chairman of the Nigerian Revenue Service (NRS), Zacch Adedeji, has surged from N711 billion in May 2023 to N3.64 trillion last month. Not only that; non-oil tax collections, in particular, experienced the sharpest rise, hitting over N1 trillion from N151 billion during the same period of 28 months. Oil revenue, he also noted, rose from N96 billion to N644 billion, while Value Added Tax (VAT) receipts more than tripled to N723 billion from N218 billion, with customs revenue surging to N322 billion from N106 billion.

On its part, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) remittances jumped to N745 billion from N125 billion.

The above facts were among those laid bare by Adedeji at the Meet-the-Press series organised by the Presidential Communications Team in Abuja, last week.

To the extent that the comprehensive restructuring of the fiscal space was among the many issues President Bola Tinubu promised to address, the development could not have come to most Nigerians as a surprise. After all, as governor of Lagos State,  Tinubu did not only re-establish the imperative of taxation in modern governance, the administration that he led proved beyond doubt, the much that could be done when proper attention is paid to tax reforms and administration.

An incontestable legacy of that era is the growth in the IGR by roughly 468% during his eight-year tenure.

Surely, Nigerians have seen that come to play in the now historic overhaul of the tax system.  While – thanks to the president’s hands-on leadership in shepherding the process– the tax laws have now become an intrinsic part of our fiscal governance system. It is also to his credit that tax collection not only improved under the old regime; so did expansion in the tax bases, the result of which the tax-to-GDP ratio has been on a steady, sustained ascent.

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Again, the records are incontrovertible. From historically low levels of under 8% (OECD reported 7.9% in 2022 and 8.2% in 2023); it rose to approximately 13.5% in 2025, up from roughly 10%–10.86% in 2024. Although still below the 15% minimum recommended by the African Union, the administration has promised to ramp this up to 18% by 2027. We have no reasons to doubt that the target is attainable.

The foundation is certainly important, both for the immediate and the future of the economy. One of its direct implications is to make the fiscal cycles less prone to commodity price and output shock volatilities.

What is no less noteworthy is that this is being delivered without increasing the tax burden on the individual and corporate entities, as many in the army of government critics have never ceased to make a song.

In fact, the development has somewhat proven one element of the old saying true –that what Nigeria has is not so much a debt problem as much as a revenue problem. 

The next phase is matching the momentum in tax revenue with the pace of infrastructural delivery. This of course is crucial if only to make Nigerians appreciate the import of the reforms.  It comes basically to making every kobo of the tax revenue count; ensuring that those handling government business imbibe the culture of fiscal responsibility in every sense of the word, and to ensure that the improved tax revenue translates to visible improvements in the living standards of the people.