The federal government has recorded a sharp rise in inflows into the Federation Account over the past three years, totaling N56.42 trillion between 2023 and October 2025.
Dr. Mohammed Shehu, Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), attributed the growth to fiscal reforms, enhanced coordination among revenue agencies, and improved compliance mechanisms.
Data presented by RMAFC showed gross Federation Account accruals of N11.93 trillion in 2023, rising to N21.43 trillion in 2024. Inflows from January to October 2025 alone reached N23.06 trillion, surpassing previous annual figures and signaling sustained revenue growth.
Speaking at the National Stakeholders’ Discourse on Enhancing Fiscal Efficiency and Revenue Growth under the Nigeria Tax Act, 2025, in Abuja, Shehu said the upward trend reflects deliberate reforms aimed at strengthening fiscal discipline and expanding the revenue base for federal, state, and local governments.
“The growth in inflows is due to fiscal reforms, coordinated tracking among revenue agencies, strengthened audits, digital monitoring, and improved fiscal discipline,” he said, noting that the measures have widened the tax base and improved transparency in collections and remittances.
Shehu said the development marked progress towards a more resilient and diversified public finance system with reduced dependence on oil revenues, adding that Nigeria’s historical reliance on crude oil exposed the economy to volatility and unstable revenue streams.
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He highlighted that rising debt-service obligations had limited the capacity for public investment across all tiers of government, making the reforms under the Nigeria Tax Act, 2025, timely and necessary.
“The Act harmonises previously fragmented tax laws into a single statute, removing duplication and obsolete provisions while easing compliance for businesses and individuals,” Shehu explained.
He noted that the law, effective January 1, 2026, will create a more coherent fiscal environment, reduce compliance burdens, and eliminate regional disparities in tax administration, reinforcing the government’s commitment to a fair, efficient, and sustainable revenue system.
Linking revenue improvements to broader economic trends, Shehu said inflation had fallen from 21.88 per cent in July to 16.05 per cent in October, while the naira strengthened from N1,534 to N1,428 to the dollar. He added that growth was driven largely by services and non-oil sectors, even as oil accounted for over 90 per cent of export earnings but contributed less than 10 per cent to GDP.
Professor Taiwo Oyedele, Chairman of the Tax Reform Committee, called for simplification of Nigeria’s tax structure, arguing that efficiency mattered more than the number of taxes. He disclosed that the new law exempts basic consumption items from VAT and provides capital gains tax relief for investors, while low-income earners, including those on minimum wage, will be exempt from personal income tax.
Oyedele said the reforms aim to eliminate structural weaknesses, reduce corruption, and ensure fairness in taxation, stressing that incremental fixes over the years had failed to address deep-rooted challenges.
Dr. Jani Ibrahim, National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, described the law as a major step toward fiscal sustainability, saying clear and predictable tax policies would encourage business investment and boost national revenue.
Represented by Deputy Governor Philip Ikeazor, the Central Bank of Nigeria welcomed the reforms, noting that modernised, digitalised tax administration would broaden the tax base, improve compliance, and reduce dependence on oil.
Desmond Akawor, Chairman of the Fiscal Efficiency and Budget Committee of RMAFC, said the Nigeria Tax Act represents a milestone in modernising tax administration, closing revenue leakages, and expanding the revenue pool, stressing that stakeholder cooperation is key to achieving the reforms’ intended outcomes.
