From left, Chairman, Nigerian Revenue Service, Dr Zacch Adedeji, Governor Central Bank of Nigeria Olayemi Cardoso and Minister of State for Finance, Dr Doris Uzoka-Anite, after discussions on fiscal-monetary coordination, in Abuja.

The Central Bank of Nigeria (CBN) has projected that taxes will account for 20.84 percent of the Federal Government’s estimated N35.51 trillion retained revenue in 2026, as authorities intensify reforms aimed at strengthening non-oil revenue mobilisation.

In its latest macroeconomic outlook for 2026, the apex bank said the revenue projection reflects expectations of stronger tax administration, improved compliance, and the anticipated implementation of the Nigeria Tax Act, 2025, which takes effect on January 1, 2026.

The CBN explained that, while resource-based revenue, including oil, minerals and mining, is expected to remain dominant at 57.01 percent, the government is also banking on stronger tax receipts from key sources such as company income tax (CIT), value-added tax (VAT), customs duties, and Federation Account levies.

The report also showed that grants and donor funding are projected to contribute 1.75 percent, while other revenue sources are expected to account for 20.40 percent of total retained revenue.

The CBN noted that the fiscal outlook for 2026 remains broadly positive, supported by reforms in both the oil and non-oil sectors.

It stated that oil revenue projections are anchored on the continued implementation of the Petroleum Industry Act (PIA) 2021 and expectations of increased domestic crude oil production.

For non-oil revenue, the bank said the improvements recorded in the last three years across CIT, VAT, customs duties, and independent government revenue are expected to be sustained, driven by stronger tax efforts and the prospects of a successful rollout of the Nigeria Tax Act.

“Increased remittances by MDAs to the Consolidated Revenue Fund (CRF) is expected to continue, following sustained measures aimed at promoting transparency and accountability in government operations,” the CBN said.

The apex bank described the Nigeria Tax Act, 2025 as a major reform that could strengthen fiscal policy and reduce the country’s heavy dependence on oil receipts.

Under the framework, tax collection is expected to be consolidated, while the country’s tax laws will be harmonised to eliminate overlaps and inefficiencies.

A key provision of the Act is the establishment of a single tax authority, the Nigeria Revenue Service, which will serve as the sole tax-collecting agency, in a move expected to enhance efficiency and accountability.

The CBN said the reform would expand the tax base and improve compliance, ultimately increasing the share of non-oil revenue in government earnings.

It added that ensuring large companies pay a minimum tax rate of 15 percent could significantly boost government revenue, improve funding for public programmes, and strengthen fiscal sustainability.

The bank further noted that higher tax revenue would help narrow Nigeria’s fiscal deficit, reduce borrowing needs, and ease pressure from debt servicing.

“The Act presents a transparent and predictable tax framework which will boost investor confidence and foreign investment,” the report said.

However, the CBN warned that despite the positive outlook, downside risks remain, particularly from the oil market.

It noted that a sustained decline in global oil prices below the budget benchmark or an unexpected drop in crude oil production could weaken projected revenues. (TRIBUNE)

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