Nigeria is seeking to recover 11.92 billion dollars through taxation, with technology playing a crucial role in its success.
Nigeria is embarking on a digital transformation journey to enhance its tax and customs revenues, with a target of reaching ₦17.85 trillion ($11.92 billion) by 2026. This ambitious plan, spearheaded by the Federal Inland Revenue Service (FIRS), aims to leverage technology to streamline processes and improve compliance.
The majority of the revenue is expected to come from value-added tax, corporate income tax, customs levies, and the electronic money transfer levy. In 2025, the country aims to raise ₦16.05 trillion ($10.72 billion) from these sources, with a higher target of ₦19.73 trillion ($13.18 billion) set for 2027.
To achieve this, the FIRS is implementing various digital strategies. For instance, they are conducting desk reviews, audits, and investigations using a real-time online data mining portal. This portal allows them to validate information provided by taxpayers and identify non-compliant taxpayers.
Moreover, the FIRS is linking its database to those of business or money-facing agencies like NIBSS, NCS, NCC, and CAC for third-party intelligence gathering. This move is aimed at enhancing the FIRS's ability to gather intelligence and ensure compliance.
The customs modernization project, aimed at automating and simplifying customs processes, including payments, is also a key part of this digital transformation. However, the project, valued at $3.2 billion, has faced issues. In 2024, the Federal High Court in Abuja dismissed a suit challenging the legality of the concession agreement related to the customs modernization project.
To address issues such as multiple taxation of businesses, Nigeria enacted new laws in 2025. The government also launched the TaxPro Max platform, which allows taxpayers to register, file, pay, and download tax clearance certificates online.
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. Banks and financial institutions will also face tighter monitoring as FIRS reconciles remittances of the EMTL.
The FIRS has developed a real-time portal to track all VAT-eligible electronic transactions and is mandating integration from banks, card schemes, fintechs, and payment service providers. The government is also automating VAT collection in supermarkets, hotels, and other retail outlets, using real-time portals to prevent leakages.
The digital transformation of Nigeria's tax administration is not without its challenges. Historically, weak administration, low compliance, and manual, paper-based systems have left room for leakages, inefficiency, and corruption. However, the government is optimistic that digital tools will help improve tax compliance, reduce collection costs, and increase revenue.
According to Taiwo Oyedele, better tax administration will depend on "modernisation and improved technology adoption". The government is looking to emulate the success of countries like Rwanda and Kenya in digitizing customs processes and tax platforms. As Nigeria progresses with its digital transformation, it remains to be seen how these strategies will contribute to its revenue goals.
NIBSS processed over ₦1 quadrillion ($667.79 billion) in transactions in 2024, a testament to the potential of digital platforms in Nigeria's economy. The International Monetary Fund has also stated that there is a positive relationship between firm digitalization and domestic tax revenues. As Nigeria continues to digitize its tax collection processes, it is expected to reap the benefits of improved efficiency and increased revenue.
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