Nigeria’s tax revenue has surged by 113 per cent 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 revenue authority attributed the sharp increase to the digitisation of the tax system, the enactment of four new tax reform laws, the transformation of the revenue service and an executive order aimed at closing loopholes in the tax system.
In an internal report on the state of the Nigerian economy released on Sunday, the NRS said the country was moving from a period of severe macroeconomic distress towards a more stable and resilient economy following the implementation of difficult 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 reform laws, the transformation of the revenue service and measures to close loopholes.
The NRS also linked the development to what it described as Tinubu’s economic management and determination to implement reforms under the Renewed Hope Agenda.
Four major economic distortions
According to the report, the Tinubu administration inherited four major economic distortions that had undermined government revenue and economic growth.
They included a fiscally unsustainable fuel subsidy regime, an opaque foreign exchange system that discouraged investment, a non-performing oil sector and a tax base that was “far below its potential.”
The revenue service acknowledged that the initial impact of the reforms created significant economic difficulties but maintained that key economic indicators had subsequently begun to improve.
It cited falling inflation, an improved balance of payments position, increased crude oil production, Nigeria’s emergence as a net exporter of petroleum products and the more than doubling of tax collections as signs of economic recovery.
Oil production rises, petroleum trade changes
The NRS said crude oil production increased from about 1.2 million–1.3 million barrels per day in 2023 to 1.73 million barrels per day by July 2026.
It said the latest output represented 104 per cent of Nigeria’s OPEC quota.
The increase is significant for government revenue because crude oil remains Nigeria’s largest source of foreign exchange and a major contributor to public finances.
The NRS also highlighted the naira-for-crude arrangement involving the Dangote Petroleum Refinery and other domestic refineries, saying the policy had contributed to a major shift in Nigeria’s petroleum trade position.
According to the report, the arrangement helped Nigeria move from being a net importer of petroleum products to becoming a net exporter after decades of dependence on imports.
The report noted that Ghana had recently decided to pursue a similar policy in its petroleum sector.
NGX market capitalisation rises to N161tn
The NRS also pointed to developments in the capital market as an indication of improving economic confidence.
It said the market capitalisation of the Nigerian Exchange rose from N30.36tn in 2023 to N161tn in 2026, describing the increase as a source of wealth creation for millions of Nigerians who invest in the stock market.
The report attributed the market rally partly to improved macroeconomic credibility, bank recapitalisation and a growing pool of domestic institutional investment.
Nigeria’s external reserves also increased significantly, rising from an unrestricted $3.99bn in 2023 to $51.9bn as of July 2026, which the NRS described as a 17-year high.
The country’s balance of payments also moved from a $3.34bn deficit to a $2.38bn surplus in the first quarter of 2026.
Similarly, Nigeria’s trade position improved from a marginal surplus of N44.7bn to N7.55tn during the first quarter of 2026.
Capital importation increases
The NRS said changes in Nigeria’s export profile and increased capital inflows were further signs of improving investor confidence.
Exports of other oil products, excluding crude, rose by 51 per cent year-on-year to N6.78tn in the first quarter of 2026.
Annual 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 revenue authority said foreign portfolio investment had been particularly strong, while foreign direct investment had also improved.
It attributed the increase in capital inflows to stronger investor confidence as economic reforms reshaped the operating environment.
CNG programme expands
The NRS also highlighted the expansion of the compressed natural gas (CNG) programme following the removal of the petrol subsidy.
According to the report, Nigeria had no large-scale CNG programme three years ago and depended heavily on imported petrol and diesel.
By 2026, more than 100,000 vehicles had reportedly been converted to CNG, with more than $2bn in investment mobilised and over 10,000 jobs created.
The NRS estimated that CNG could reduce running costs by between 40 and 60 per cent compared with petrol.
It said some commercial drivers had seen their monthly fuel bills fall from about N50,000 to N18,000 after converting their vehicles.
Agriculture and food security
On agriculture and food security, the revenue service recalled that the administration declared a state of emergency on food security in July 2023.
It said subsequent measures included the release of strategic grain reserves, 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, according to the report.
The NRS said food prices had fallen by about 50 per cent by March 2026, citing the Ministry of Agriculture.
However, it acknowledged that agriculture would require several planting seasons before increased government support could fully translate into higher production.
Debt rises but debt-to-GDP ratio falls
On public debt, the NRS acknowledged that Nigeria’s total debt stock increased from N87.4tn in 2023 to N159.28tn in late 2025.
However, the revenue authority argued that the more important measure was debt relative to the size of the economy.
According to the report, the 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 NRS described the decline as the first sustained reduction in the ratio in more than a decade.
It also said debt servicing as a proportion of government revenue had fallen from 68 per cent to an International Monetary Fund-projected 53 per cent.
NRS: Reforms moving economy towards recovery
The NRS said the combination of higher tax collections, increased oil production, stronger capital inflows, rising external reserves and improved trade and balance of payments positions indicated that Nigeria was gradually emerging from the severe economic pressures that followed the government’s early reforms.
The revenue authority, however, acknowledged that the gains came after what it described as “painful” adjustments.
It stressed that continued implementation of the reforms would be necessary to consolidate the recovery and ensure that the improvements recorded across taxation, oil production, investment, agriculture, trade and public finances translate into sustained economic growth.
The latest tax figures therefore represent one of the clearest changes highlighted by the NRS, with collections rising from N12.3tn in 2023 to N27.1tn by July 2026, a 113 per cent increase in less than three years.
