FG, NRS Rally States To Achieve N40tn Tax Revenue Target

The Federal Government and the Nigeria Revenue Service (NRS) on Tuesday intensified calls for stronger collaboration among federal, state and local government institutions to improve tax compliance and boost revenue generation under Nigeria’s new tax regime.

Speaking at a national workshop on strengthening tax compliance under the new tax regime held at the Transcorp Hilton Hotel, Abuja, top government officials said the success of the country’s ongoing economic reforms would depend largely on building a transparent, technology-driven and equitable tax system capable of funding development across all tiers of government.

The workshop, organised by the Government Business Group of the Government and Large Taxpayers’ Directorate of the NRS, brought together officials from ministries, departments and agencies (MDAs), government-owned enterprises (GOEs), and sub-national governments.

Speaking at the event, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, described the new tax regime as a critical pillar of the Federal Government’s broader structural reform agenda aimed at reducing the country’s dependence on volatile revenue sources.

According to him, the tax reforms are being implemented alongside major economic adjustments, including the floating of the naira, removal of fuel subsidies and measures to tackle inflation.

The Minister who was represented his Chief of Staff,
Mr. Tolu Adegbie, said, “We are not here to just talk about administrative rules and regulatory guidelines; we are here as state actors to actively think through implementation of the new tax reforms and shape our fiscal architecture to provide sustainable funds required to address our pressing socio-economic challenges,” he said.

Oyedele said the government was focused on building a stable and predictable tax-based economy capable of funding infrastructure, healthcare, education and security.

“The new tax regime is a key part of our wider structural reform agenda, designed purposefully to move our economy away from reliance on volatile revenue sources towards a stable, predictable and equitable tax-based platform,” he added.

The minister stressed that taxes represented “the social contract in action,” noting that effective tax administration required transparency, cooperation and accountability among all levels of government.

He said the Nigeria Revenue Service had been mandated to manage federation tax administration, including the collection of taxes from transactions executed by federal, state and local government institutions.

“For sustainable success there must be alignment of policies between the Federal Government, sub-national administrations and our public enterprises,” Oyedele stated.

He also called for deeper cooperation through information sharing, harmonised processes and mutual accountability, saying true fiscal federalism could only thrive where all parties contributed fairly to the national revenue pool.

“We have to be honest about the structural imbalances affecting voluntary tax compliance within our system. Going forward, we must create an environment where every taxpayer contributes fairly to the seed, and everyone can expect to share in the harvest,” he said.

In his keynote address, the Executive Chairman of the Nigeria Revenue Service, Zacch Adedeji, said the agency was under pressure to raise about ₦40tn in tax revenue this year to support allocations to the three tiers of government.

Adedeji described the target as a “Herculean task” that would require stronger collaboration between the NRS and state actors, as well as improved compliance across government institutions.

“Our major role at the Nigeria Revenue Service is to sustainably finance the Federation Account Allocation Committee. This fund is the financial lifeblood of the three tiers of government and is used to finance the critical developmental projects that our citizens depend on,” he said.

According to him, the workshop was designed as a tactical response to persistent bottlenecks in tax administration and to deepen awareness among MDAs and GOEs about their statutory obligations as agents responsible for deducting and remitting transaction taxes.

Adedeji who was represented by
Mr. Muhammad Abubakar, Executive Director, Finance and Corporate Services Directorate, said the new tax regime was intended to reduce dependence on enforcement-heavy methods and encourage voluntary compliance.

“Our goal is to move away from an enforcement-dependent approach and move to a collaborative, voluntary compliance framework where every institutional stakeholder contributes its fair share to our collective national prosperity,” he said.

The NRS chairman said findings from monitoring and audit activities had revealed major imbalances in tax compliance among states and government enterprises.

“We have reports about the imbalance in compliance existing among states and GOEs which does great damage to institutional fairness, undermines the broader compliance culture and unfairly burdens compliant states,” he stated.

He warned that such disparities weakened the country’s fiscal system and stressed that all levels of government must contribute responsibly to the national revenue pool.

Adedeji also announced that the NRS would begin recognising the most tax-compliant states from 2026 as part of efforts to encourage healthy competition and improve compliance.

“Starting this year, 2026, the Service will launch an initiative to identify the most tax-compliant states across multiple dimensions. Excellence deserves recognition, and we look forward to honouring our top performers at the end of the year,” he said.

Also speaking at the event, the Executive Director of the Government and Large Taxpayer Directorate at the NRS, Amina Ado, said the workshop was strategically designed to engage critical stakeholders responsible for driving Nigeria’s fiscal health.

She noted that the country had reached a point where all institutional actors whose activities affected public finance must operate in alignment with national tax objectives.

Ado said field monitoring and audit activities by the NRS had uncovered significant leakages, particularly in the prompt deduction and remittance of Value Added Tax (VAT) and Withholding Tax (WHT).

“While many sub-national entities are exemplary in their civic duties, there are still some significant structural leakages, especially in the prompt deduction and delay in remittance of Value Added Tax and Withholding Tax,” she said.

According to her, some jurisdictions were making substantial efforts to contribute to the national revenue pool while others continued to benefit from revenue distribution without meeting their obligations.

“This compliance gap distorts and creates an imbalance in our fiscal federalism,” she added.

Ado said the NRS was committed to moving its relationship with MDAs, GOEs and sub-national governments away from “enforcement-heavy friction” toward a seamless and collaborative partnership.

She added that the new tax reforms empowered the NRS to enforce the remittance of deducted taxes while also protecting the rights of MDAs and GOEs as statutory tax agents.

“At NRS, our mission is to make the new tax laws easier to understand, reduce transition bottlenecks and build technologically driven and transparent remittance platforms that embed compliance into daily operations,” she said.

The workshop ended with calls for stronger institutional partnerships, improved transparency in tax administration and greater commitment by all tiers of government to support Nigeria’s fiscal sustainability and economic development agenda.