FG Launches Major Public Finance Reforms Ahead of New Tax Regime

With less than three months to the rollout of Nigeria’s new tax system, the Federal Government has commenced wide-ranging reforms aimed at transforming public finance through technology, transparency, and institutional restructuring.

The reforms, driven by the Ministry of Finance under President Bola Tinubu’s administration, target increased revenue efficiency, reduced leakages, and the diversification of the economy away from oil dependence.

A key component of the plan is the transition of the Federal Inland Revenue Service (FIRS) to the National Revenue Service (NRS) in January 2026. The new body will consolidate revenue collection functions currently performed by the FIRS, Nigerian Customs Service (NCS), and other agencies.

Finance Minister and Coordinating Minister of the Economy, Wale Edun, described the move as “the beginning of a new era of accountability and transparency.” He said the initiative would help grow Nigeria’s tax-to-GDP ratio from 10 to 18 per cent within three years, surpassing the African average and reducing reliance on debt.

Central to the reforms are digital innovations, including the Federal Treasury Receipt (FTR) and Central Billing System (CBS), tools designed to track all payments into government accounts and standardise service pricing. These systems form part of the Revenue Optimisation and Assurance Project (REV-OP), which provides real-time monitoring of revenue across all government agencies.

Edun said the goal is to ensure every kobo due to the government is digitally recorded and reconciled. “We are safeguarding national resources and creating fiscal space for investments in education, health, and infrastructure,” he added.

The FIRS has already undergone major restructuring, setting a record N21.6 trillion in collections in 2024, 111 per cent of its target. It has also expanded its TaxPro Max platform and deployed artificial intelligence to detect underreporting in sectors like construction and maritime.

Similarly, the Nigerian Customs Service has introduced a fully digital e-Customs platform to automate cargo tracking and reduce corruption at ports, while collaborating with the Nigerian Ports Authority and Central Bank of Nigeria to harmonise trade documentation.

The government has also directed major revenue agencies, including the FIRS, NCS, and NUPRC, to remit gross revenues directly to the treasury, eliminating excessive collection costs, a problem that cost the country over ₦924 billion last year.

Officials say the reforms will not only boost revenue but also rebuild public trust in Nigeria’s financial system, laying a sustainable foundation for the new tax regime set to begin in January 2026.