Nigeria Tax Revenue Misses Quarterly Target

Nigeria generated ₦7.44tn in tax revenue in the first quarter of 2026 but fell short of its budget target by ₦2.24tn despite the implementation of sweeping tax reforms and new fiscal laws.

Documents presented by the Nigeria Revenue Service at Federation Account Allocation Committee meetings showed that collections between January and March stood at ₦7.44tn against a prorated target of ₦9.68tn, representing a performance rate of 76.87 per cent.

The latest figures marked a sharp reversal from the corresponding period in 2025 when the then-Federal Inland Revenue Service exceeded its quarterly revenue target.

Records showed that tax revenue rose year-on-year by ₦1.40tn from ₦6.04tn recorded in the first quarter of 2025, reflecting a 23.2 per cent increase in collections despite the significant shortfall against projections.

Analysis of the data indicated that Companies Income Tax and related non-oil taxes accounted for the largest revenue gap during the quarter.

Collections from Companies Income Tax, Capital Gains Tax, and Stamp Duties stood at ₦3.75tn against a target of ₦5.05tn, resulting in a shortfall of ₦1.30tn and a performance rate of 74.25 per cent.

Companies Income Tax from upstream operations also underperformed, generating ₦349.95bn compared to the target of ₦523bn.

Petroleum royalties recorded one of the weakest performances during the quarter, with collections reaching ₦1.12tn against a target of ₦2.03tn, leaving a deficit of ₦909.25bn.

However, Value Added Tax remained relatively stable during the period, generating ₦2.42tn compared to a target of ₦2.49tn, reflecting a performance rate of 97.04 per cent.

Oil taxes emerged as one of the strongest-performing revenue categories in the quarter.

Petroleum Profits Tax and Hydrocarbon Tax collections rose to ₦1.62tn, exceeding the target of ₦1.30tn by ₦318.23bn and recording a performance rate of 124.42 per cent.

Despite the stronger oil tax performance, gains from the sector were insufficient to offset weaknesses across Companies Income Tax, royalties, and other revenue streams.

The report also showed that mineral royalties and other mineral revenue categories recorded no inflows during the quarter despite combined targets of ₦24bn.

For March 2026 alone, the Nigeria Revenue Service generated ₦2.31tn against a target of ₦3.23tn, representing a shortfall of ₦915.09bn and a performance rate of 71.64 per cent.

Although the March figure missed target, it reflected an increase of ₦120.66bn compared to the ₦2.19tn collected in February.

Oil taxes generated ₦614.96bn in March, slightly above the monthly target of ₦608.75bn.

“The reason for the decrease in the PPT collections when compared with previous month is due to decrease in receipt from PSC,” the report stated.

Companies Income Tax, Capital Gains Tax, Stamp Duties, and gas income generated ₦477.54bn in March, significantly below the monthly target of ₦1.07tn.

“The increase in performance is as a result of increase in CIT and other tax payments received from taxpayers filing returns outside the peak period of the month of June,” the report added.

Value Added Tax collections for March stood at ₦664.42bn against a target of ₦829.92bn, with the agency attributing the weaker performance to declining consumption of VATable goods.