The Federal Government has given the newly established Nigeria Revenue Service (NRS) the legal power to borrow funds from any source and retain 4 per cent of the total non-petroleum revenue it collects. These provisions are part of the new Nigeria Tax Administration Act 2025, signed into law by President Bola Ahmed Tinubu and set to take effect from January 2026.
A copy of the signed Act, obtained on Sunday, outlines wide-ranging reforms that grant the NRS greater financial and operational independence. Section 28 of the Act specifically empowers the Service to borrow funds via loans, overdrafts, or other financial instruments to fulfil its statutory responsibilities.
Section 22(a) further permits the NRS to retain four per cent of the total revenue it collects—excluding petroleum royalties—for its capital and operational expenses. However, the retained sum will still be subject to appropriation by the National Assembly.
“The Service shall establish and maintain a fund… 4 per cent of the total revenue, less petroleum royalty, collected by the Service, which shall be appropriated by the National Assembly,” the law states.
The Act also provides new funding sources for the agency, including grants-in-aid, donations, endowments, and income generated through leasing, hiring, or selling its assets. It allows for support from domestic and international organisations, provided the support aligns with the Service’s objectives.
In return for this expanded financial authority, the NRS must adhere to stricter transparency and accountability guidelines. It is required to submit audited financial statements to the Minister of Finance by June 30 every year. These reports must then be forwarded to the Federal Executive Council and the National Assembly within 30 days. The agency must also present its annual budget estimates by September 30 and complete audits within six months after the close of each financial year.
The new law significantly broadens the NRS’s role beyond revenue collection. It mandates the agency to lead in economic development policy through strategic use of tax instruments. This includes assessing tax waivers, detecting fraud, collaborating with ministries, and supporting policy reviews that stimulate growth and investment.
According to the Act, the NRS is now responsible for investigating tax fraud, tracking and freezing assets tied to tax evasion, and maintaining a comprehensive database on all taxable individuals and entities. The Service is also empowered to monitor global tax trends, engage in information exchange with international tax bodies, and initiate personnel training programmes through collaboration.
A review of Part IV of the Act shows that the Service is now tasked with identifying and assessing tax obligations across all taxable entities in Nigeria—ranging from individuals to corporations—and enforcing full recovery of assessed liabilities.
The law also gives the Service sweeping powers to seize assets linked to tax fraud and enforce compliance with Nigerian tax laws. This includes powers to trace, freeze, or confiscate assets derived from unpaid taxes, in accordance with applicable laws.
In terms of data and research, the Act mandates the Service to build and maintain an up-to-date database of all taxable persons and entities, as well as government revenue-generating agencies. The NRS is also tasked with supporting research to understand the impact of tax waivers, evasion, and fraud on Nigeria’s economy.
To ensure Nigeria keeps pace with global tax administration standards, the NRS will collaborate with international organisations and engage in exchange programmes to develop expertise.
The Tax Administration Act 2025 marks a major shift in Nigeria’s fiscal governance structure. It sets up the NRS as a financially independent, data-driven, and enforcement-focused agency, with the responsibility to drive efficient tax collection, monitor fiscal policy implementation, and ultimately support economic growth.
