Nigeria aims to collect $11.92 billion in taxes, with technology playing a decisive role in the success of this endeavor.
Nigeria Embraces Digital Transformation in Tax Administration and Customs Processes
Nigeria is looking to emulate the success of countries like Rwanda and Kenya in digitising its customs processes and tax administration, as the government aims to increase tax and customs revenues to ₦17.85 trillion ($11.92 billion) by 2026.
A significant focus on technology is at the heart of this ambitious goal, with the Federal Inland Revenue Service (FIRS) stating that the country's digital economy has experienced exponential growth. In 2024, NIBSS processed over ₦1 quadrillion ($667.79 billion) in transactions, demonstrating the potential for digital transformation in Nigeria's economy.
The FIRS has launched the TaxPro Max platform, which allows taxpayers to register, file, pay, and download tax clearance certificates online. The integration of digital tools is a key focus for improving tax collection efficiency, as stated in a 2023 research paper.
To address issues with its $3.2 billion customs modernisation project, originally conceived in 2015, the government plans to collect ₦16.05 trillion ($10.72 billion) from sources such as value-added tax, corporate income tax, customs levies, and the electronic money transfer levy in 2025. The majority of the revenue is expected to come from these sources.
President Bola Tinubu stated that these changes open the doors to a new economy and business opportunities. In line with this, the government has enacted new laws to address issues such as multiple taxation of businesses in 2025.
To ensure compliance, the FIRS will conduct desk reviews, audits, and investigations using a real-time online data mining portal to validate information provided by taxpayers and reveal non-compliant taxpayers. Large businesses with turnovers above ₦5 billion ($3.34 million) since August 1, 2025, are required to integrate their invoicing systems with the FIRS platform for real-time validation and reporting.
The FIRS is also linking its database to those of business or money-facing agencies such as NIBSS, NCS, NCC, and CAC for third-party intelligence gathering. This move is aimed at improving the efficiency of tax administration and preventing leakages in the system.
The International Monetary Fund stated that there is a positive relationship between firm digitalisation and domestic tax revenues. The government intends to automate VAT collection in supermarkets, hotels, and other retail outlets, using real-time portals to prevent leakages.
Banks and financial institutions will face tighter monitoring as FIRS reconciles remittances of the EMTL. Better tax administration, according to Taiwo Oyedele, depends on "modernisation and improved technology adoption".
The Nigerian government has a higher tax target of ₦19.73 trillion ($13.18 billion) for 2027, indicating a continued focus on digital transformation and improved tax administration. With these initiatives in place, Nigeria is poised to join the ranks of digitally advanced nations in Africa.
In a recent court ruling, the Federal High Court in Abuja dismissed a suit challenging the legality of the concession agreement related to the customs modernisation project. This decision paves the way for the successful implementation of the project.
President Tinubu's vision of opening the doors to a new economy and business opportunities is becoming a reality, as Nigeria embarks on this digital transformation journey. The future of tax administration and customs processes in Nigeria looks promising, with a focus on modernisation, improved technology adoption, and increased revenue generation.
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