Nigeria collected an average of ₦127.83 billion ($93.98 million) in taxes each day between January and July 2026, driven by new tax reform laws and expanded digital systems that brought more economic activity into the tax net.

The gains are notable for a country that has historically recorded one of the lowest tax-to-GDP ratios in the world — estimated at around 5–6%, well below the African average of roughly 16% — in part because a large informal sector has long operated outside the tax system.

Tax collections totaled ₦27.1 trillion ($19.93 billion) in the first seven months of 2026, according to data released by the Nigeria Revenue Service (NRS), the country's tax authority. This puts Nigeria on course to surpass its 2025 full-year collections, as the government gains deeper visibility into how much individuals and businesses earn, spend, and transfer.

In just seven months, the NRS has already collected 95.76% of the ₦28.3 trillion ($20.81 billion) it raised throughout all of 2025, and has reached two-thirds (66.57%) of its ₦40.71 trillion ($29.93 billion) revenue target for 2026.

The NRS attributed the increase to 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."

New Tax Laws and Digital Infrastructure

In 2025, President Bola Tinubu signed four new tax laws, reshaping the framework for administering, collecting, and enforcing taxes in Nigeria. The reforms came as the government sought to diversify revenue from an economy where oil can no longer be relied upon as heavily as it once was. The laws also formally restructured the Federal Inland Revenue Service (FIRS) into the NRS as part of a broader institutional overhaul.

The four laws established new rules for tax administration and collection, including a legal basis for using technology to automate assessment, collection, and information gathering. "A relevant tax authority may deploy technology to automate tax administration processes including tax assessment, collection, accounting and information gathering," the Tax Administration Act states.

In 2021, the NRS — then known as the Federal Inland Revenue Service (FIRS) — launched TaxPro Max, a platform enabling taxpayers to register, file returns, make payments, and download tax clearance certificates online.

Since August 1, 2025, businesses with annual turnovers above ₦5 billion ($3.68 million) have been required to integrate their invoicing systems with the NRS platform for real-time validation and reporting.

"Leveraging technology, such as the automated tax administration system (TaxPro Max and E-services) to further simplify tax processes, drive voluntary tax compliance, increase revenue collection, and create a tax environment that is conducive for taxpayers to fulfil their tax obligations," the government explained in a policy paper.

In July, the NRS told TechCabal that large taxpayers were already under compliance monitoring, while medium-sized businesses began mandatory onboarding in July 2026 as part of a broader e-invoicing initiative. Emerging businesses will follow in 2027 under a three-year phased rollout that could substantially widen the tax base as smaller enterprises are brought into the digital system.

Nigeria is looking to countries such as Rwanda, which digitised its customs process through the Electronic Single Window, and Kenya, which uses its iTax platform, as models for its digitisation efforts.

Transaction Monitoring and Greater Visibility

In July 2025, TechCabal reported that the NRS, then the FIRS, had developed a real-time portal to track VAT-eligible electronic transactions and was requiring banks, card schemes, fintechs, and payment service providers to integrate with the system. In August 2025, the Federal Government said the portal had been introduced as part of the Transaction Monitoring System (TMS).

To give the TMS broader access to Nigeria's payment system — which processed more than ₦1.2 quadrillion ($882.26 billion) in 2025 — the Central Bank of Nigeria in March 2026 mandated all licensed Payment Solution Service Providers (PSSPs) and Switches and Processing Operators to integrate with the system.

VAT collections increased by 9.98% in the first quarter of 2026 to ₦2.42 trillion ($1.78 billion), according to the National Bureau of Statistics.

Revenue Collection vs. Fiscal Balance

Despite hauling in roughly ₦1.48 million every second, the government still must borrow to balance its budget. A fast collection rate improves government revenue without automatically closing the gap between what it earns and what it spends — a gap that has widened as debt servicing costs consume a growing share of federal revenue.

Nigeria's debt stock reached ₦159.35 trillion ($117.16 billion) at the end of March 2026.

Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, said on July 20 that higher revenue collection does not necessarily eliminate the need to borrow when expenditure requirements remain higher than available resources.

"We look at all our numbers and say that we can generate ₦6. ₦6 is our revenue target; our expenditure is ₦10," Oyedele said. "If we end up generating ₦7, we will say we have exceeded our revenue target. It is not a lie. But we still need ₦3 to balance the budget because we need to spend ₦10. So this is the reason why both can co-exist. The government can exceed the revenue target and still have to borrow."

The figures indicate the government is improving at identifying taxable activity and collecting revenue. The harder question is when that additional revenue will be sufficient to reduce reliance on borrowing and eventually translate into better public services.