Yes, but only in one direction. Nigeria's four tax reform Acts, effective 1 January 2026, have transformed how much the Nigeria Revenue Service can see about the average taxpayer. Structured e-invoicing, a unified Taxpayer Identification Number, and mandatory reporting by banks and fintechs mean your transactions are now visible to the Service in something close to real time. What has not changed at anything like the same pace is how much you can see about the Service, and about what happens to the money once it has been collected.
That asymmetry is not a complaint about the reform. It is a design gap, and it is probably the single largest factor determining whether the current revenue surge holds.
The numbers are real, and they deserve context
Federal collections rose from N12.3 trillion in 2023 to N21 trillion in 2024 and N28.3 trillion in 2025. In the first half of 2026 alone, NRS reported about N21.6 trillion, a 49 per cent increase on the same period of 2025, with non-oil sources making up roughly 76 per cent of the total. The tax-to-GDP ratio has moved from 10.3 per cent in mid-2023 to around 13 per cent, against an 18 per cent target.
Those are serious numbers and the Service deserves credit for them. But part of the rise reflects general inflation, the rebasing of national accounts, naira depreciation and the executive order changing oil revenue remittances, rather than the tax statutes alone, which only took effect on 1 January 2026. Being honest about what actually drove the gain matters if the objective is to sustain it.
There are three kinds of tax transparency, not one
Most of the public debate treats transparency as a single thing. It is not. Separating it into three distinct flows makes the gap obvious immediately.
Administrative transparency, what the Service tells taxpayers: consolidated law, published guidance, advance rulings, audit selection criteria, a statement of taxpayer rights. This improved substantially across 2025 and 2026.
Taxpayer transparency, what taxpayers tell the Service: e-invoicing, unified TIN, bank and fintech reporting, beneficial ownership disclosure. This has been transformed, and is now among the most ambitious frameworks in Africa.
Fiscal disclosure transparency, what the state tells citizens about the proceeds: tax expenditure statements, disaggregated revenue statistics, cost of collection, timely audit reports. This has barely moved.
The genuine win: the Office of the Tax Ombud
Part VI of the Joint Revenue Board (Establishment) Act 2025 created the Office of the Tax Ombud as an independent, no-cost forum for taxpayers with complaints about how they have been treated. In May 2026 the Office unveiled a public website, a toll-free contact centre and a technology-driven case management system. It does not determine your tax liability. It examines whether the process you were put through was fair, and it acts as a watchdog against administrative lapses.
For a small or medium business that cannot afford to litigate a disputed assessment, this is the most practically useful thing in the entire reform package. Most business owners still do not know it exists.
Five disclosures Nigeria still does not make
A tax expenditure statement. No law requires government to publish, each year, how much revenue was given away through waivers, exemptions and concessions, to which sectors, and to whose benefit. Tax expenditures remain an unappropriated parallel budget.
Audit case selection criteria. There is no published statement of what triggers an audit. As selection becomes automated and risk-scored off e-invoicing and third-party data, this stops being merely a discretion problem and becomes an algorithmic accountability problem.
Disaggregated revenue statistics. Headline collection figures are announced regularly. Breakdowns by sector, taxpayer size band and state, in a usable and comparable format, are not.
Cost of collection. Nigeria's cost of collection is estimated at about 4 per cent of revenue collected, against a global norm nearer 1 per cent. That figure reaches the public through external analysis, not through routine official reporting.
Timely audit reports. The Fiscal Responsibility Act 2007 contemplates publication of the audit report within six months of the year end. Practice has fallen well short. Nigeria scored 31 out of 100 on budget transparency in the 2023 Open Budget Survey, down from 45 in 2021, with public participation at 19 out of 100.
Why this matters to your business, not just to policy
Compliance research across Africa is consistent on one point. What best predicts willingness to pay is not the penalty regime. It is whether people believe the system treats them fairly and that the money is being put to use. Where that belief is missing, compliance still happens, but it happens through enforcement. Enforced compliance is expensive to maintain, sensitive to any slackening in enforcement intensity, and tends to produce adversarial rather than cooperative taxpayer behaviour over time.
For a business, the practical consequence is blunt. In a system that can see almost everything you do and explains relatively little of what it does, your protection is documentation. Not argument. Documentation.
What to do about it now
Assume every transaction is visible. Bank inflows, invoices and returns are now cross-checked automatically. Reconcile monthly rather than annually, and treat any unexplained lodgement as a question you will eventually be asked.
Close the gap between your books and your filings before NRS finds it. Our step-by-step NRS tax audit preparation checklist sets out exactly what to have ready.
Keep payroll clean. PAYE and withholding tax remain the fastest route to an assessment, because the data is easy for the Service to match. See our Nigeria Tax Act 2025 PAYE compliance checklist.
Use the Tax Ombud where you have been treated unfairly on process. It costs nothing, and it exists precisely for taxpayers who cannot justify the cost of litigation.
Ask for the numbers. Professional bodies, chambers of commerce and organised taxpayer groups have every standing to press for a statutory tax expenditure statement and published audit selection criteria. That is a legitimate ask, and it serves compliant businesses most of all, since they are the ones currently subsidising the opacity.
None of the measures above is expensive. A statutory tax expenditure statement, a disaggregated statistics bulletin, a published audit selection policy, a Tax Ombud with a comply-or-explain power, and audit reports delivered on time would together cost a small fraction of one per cent of the revenue at stake. What they require is not resource. It is a decision to accept scrutiny in exchange for legitimacy. That trade is the whole substance of the fiscal contract, and no amount of enforcement capacity substitutes for it.
VOG Global Consults works with Nigerian companies, from owner-managed businesses to regulated financial institutions, on audit-ready records, IFRS-compliant financial statements, tax computations and dispute support under the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025. If your books have not been reconciled to your filings this year, that is where to start. Contact VOG Global today. Suite 060 to 061, Orago Complex, Area 10, Garki, Abuja.
FAQ
Does the Nigeria Tax Administration Act 2025 really make my transactions visible to NRS? In substance, yes. The Act mandates digital record keeping, structured electronic invoicing for medium and large businesses through the national merchant buyer solution, a unified Taxpayer Identification Number linking individuals and businesses across banking, pension and insurance records, and reporting by banks and fintechs of transactions above prescribed thresholds. Assume that unexplained inflows will be noticed.
What can the Office of the Tax Ombud actually do for me? It reviews and helps resolve complaints about how a tax authority has treated you, at no cost and without litigation. It does not determine how much tax you owe. It looks at process, fairness and administrative conduct, and reports on systemic weaknesses it finds. Its recommendations are not currently binding, which is one of the reforms still needed.
Is Nigeria's tax-to-GDP ratio genuinely improving? The reported ratio has risen from 10.3 per cent in mid-2023 to about 13 per cent, with an 18 per cent target. The direction is right. But the ratio is also affected by GDP rebasing and by inflation running through both numerator and denominator, so a single headline figure should be read alongside the underlying collection data rather than on its own.
This article draws on a longer academic paper by Dr Okey Okoro Udo on transparency and accountability in tax administration, prepared for international conference presentation.