May 20, (THEWILL) — Nigeria’s tax revenue increased to ₦7.44 trillion in the first quarter of 2026, representing a 23.2 percent year-on-year growth, but collections still missed the government’s target by ₦2.24 trillion despite ongoing tax reforms.
Documents presented by the Nigeria Revenue Service (NRS) at Federation Account Allocation Committee (FAAC) meetings showed that cumulative collections from January to March stood at ₦7.44 trillion against a prorated target of ₦9.68 trillion, translating to a performance rate of 76.87 percent.
The performance marked a reversal from the same period in 2025 when the then-Federal Inland Revenue Service (FIRS) exceeded its target. In Q1 2025, the agency generated ₦6.04 trillion, surpassing its ₦5.82 trillion target by ₦218 billion.
Analysis of the 2026 figures showed that Companies Income Tax (CIT), Capital Gains Tax, and Stamp Duties were the major contributors to the shortfall. The category generated ₦3.75 trillion against a target of ₦5.05 trillion, leaving a deficit of ₦1.30 trillion.
Petroleum royalties also underperformed, with collections of ₦1.12 trillion compared to the ₦2.03 trillion target.
However, oil taxes posted stronger results. Petroleum Profits Tax and Hydrocarbon Tax generated ₦1.62 trillion, exceeding the target by ₦318.23 billion.
VAT collections remained relatively stable at ₦2.42 trillion against a target of ₦2.49 trillion.
For March 2026 alone, the NRS collected ₦2.31 trillion, below the monthly target of ₦3.23 trillion, although the figure represented a 5.5 percent increase from February collections.
The NRS had earlier projected that new tax reforms would help generate ₦40.7 trillion in taxes and royalties in 2026.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.