Abuja, Nigeria – The Nigeria Revenue Service (NRS) has unveiled an ambitious plan to raise ₦40 trillion in annual revenue over the next three years, hinging on aggressive tax administration reforms, digitalization of collection systems, and a dramatic expansion of the tax net. The new target, announced during the national fiscal strategy consultation, represents a 210% increase from 2024’s total federally collected revenue of approximately ₦12.9 trillion.

Speaking at the stakeholders’ forum, the Chairman of the NRS emphasized that achieving the ₦40 trillion goal would require moving beyond oil-dependent streams and unlocking value from the informal sector, which currently contributes less than 5% of total direct taxes despite comprising over 65% of economic activity. “Compliance is the missing link. We are deploying AI-driven taxpayer identification and seamless digital payment integration to ensure every eligible business and high-net-worth individual pays their fair share,” he stated.

Data from the NRS and the Federal Inland Revenue Service (predecessor agency) show that between 2020 and 2024, the number of active taxpayers grew from 25 million to 41 million, aided by the integration of bank verification numbers (BVN) and tax identification numbers (TIN). However, the compliance gap remains vast: an estimated 35 million eligible individuals and small businesses are still outside the tax net. The new strategy targets onboarding 20 million new taxpayers by 2027 while leveraging technology to reduce evasion and improve collection efficiency.

The NRS blueprint, reviewed by Data Unveiled, includes sector-specific compliance drives: technology companies, the real estate sector, and the rapidly growing digital economy will face new withholding tax regimes. Additionally, a taxpayer-friendly incentive system — including faster VAT refunds and penalty waivers for early filers — aims to boost voluntary compliance. The agency also plans to deploy 5,000 specialized tax auditors and leverage data from financial institutions, mobile money operators, and property registries to cross-check declared incomes.

Economic analysts, however, caution that aggressive revenue targets must be balanced against the risk of overburdening formal businesses and triggering inflationary pressure. According to the International Monetary Fund (IMF), Nigeria could raise an additional ₦8–10 trillion annually by closing the VAT gap alone — currently estimated at 45% of potential collections. The NRS insists that the new target is achievable if digital infrastructure reforms (including the unified taxpayer database and the National Single Window) become fully operational by Q1 2027.

This data journalism piece examines the revenue trajectory, compliance gaps, and fiscal transformation needed for Nigeria to meet its ambitious ₦40 trillion goal — and what it means for public services and economic stability.