FG Accelerates Revenue Reform Ahead of New Tax System Launch

With less than three months until the rollout of Nigeria’s new tax regime, the Federal Government has intensified efforts to overhaul its revenue collection architecture, unveiling a suite of technology-driven reforms aimed at boosting fiscal transparency, curbing leakages, and reducing dependence on oil revenues.

The reforms, led by the Ministry of Finance and anchored on the Revenue Optimisation and Assurance Project (REV-OP), indicate a great shift in public finance management. 

At the heart of the initiative is the transition of the Federal Inland Revenue Service (FIRS) into the National Revenue Service (NRS), a unified body set to absorb the revenue functions of the Nigerian Customs Service (NCS) and other agencies by January 2026.

Raising the Bar: Tax-to-GDP Ambitions

The Tinubu administration is targeting an increase in Nigeria’s tax-to-GDP ratio from its current 10 per cent to 18 per cent within three years, surpassing the African average of 16 per cent and reducing reliance on debt financing. 

Officials say the reforms will streamline revenue collection and ensure that every naira due to the Federation Account is accurately tracked and transparently disbursed.

Digital Tools for Fiscal Discipline

Central to the reform is automation. The Ministry of Finance recently launched the Federal Treasury Receipt (FTR), a digital proof of payment system designed to verify all transactions into government accounts. Paired with the Central Billing System (CBS), these tools aim to standardize service pricing and eliminate manual errors and corruption.

Both systems are undergoing a 30-day pilot across 10 federal agencies, with a nationwide rollout expected to follow. Minister of Finance and Coordinating Minister of the Economy, Wale Edun, described the launch as "the dawn of a new era of transparency and accountability."

"For the first time, the treasury will have a real-time view of inflows across all agencies," Edun said, revealing the REV-OP dashboard’s ability to monitor performance by sector and region.

Institutional Overhaul and AI Integration

The FIRS has already begun restructuring to align with the new framework, classifying taxpayers by size and expanding its digital platform, TaxPro Max. The agency also deployed artificial intelligence to audit financial data, uncovering underreported income in sectors like construction and hospitality.

In 2024, the FIRS surpassed its revenue target, collecting N21.6 trillion—over 111 per cent of its goal. Chairman Dr Zacch Adedeji credited the success to reforms that "replace bureaucracy with efficiency."

The NCS has also digitized its operations through an e-Customs platform that automates cargo tracking and payment processing, reducing physical contact and opportunities for graft. Comptroller-General Adewale Adeniyi stressed the agency’s commitment to "a transparent, technology-driven Customs system."

Plugging Leakages, Redirecting Funds

A major debate has been the high cost of revenue collection, with agencies retaining nearly N925 billion before remitting to the treasury last year. Under the new directive, agencies like FIRS, NCS, and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) must remit gross revenues directly, potentially freeing up funds for infrastructure and social services.

Beyond taxes, the government is tightening oversight of non-tax revenues, including surpluses and service charges collected by ministries and departments.

Looking Ahead

As the January 2026 launch of the NRS approaches, stakeholders say the reforms could redefine Nigeria’s fiscal landscape. 

Experts argue that while revenue generation has never been Nigeria’s core problem, plugging systemic leakages is key to achieving sustainable development and restoring public trust.