Nigeria Tackles N8 Trillion Revenue Gap with Tax Reforms, E-Invoicing Mandate
Nigeria's House of Representatives has launched a review of tax incentives and waivers amid annual revenue losses of N8 trillion, while the Nigeria Revenue Service sets Q2 2026 deadline for large firms to implement e-invoicing systems.
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Nigeria's federal government is implementing a multi-pronged approach to address substantial revenue leakages, with the House of Representatives commencing a structured review of tax incentives and waivers that contribute to annual losses estimated at N8 trillion, according to Business Day.
The House Ad-hoc Committee investigating revenue losses and leakages has initiated the review process, targeting the administration of tax incentives that have resulted in significant fiscal shortfalls. The N8 trillion annual loss represents approximately 2.8% of Nigeria's GDP based on 2025 estimates, highlighting the scale of revenue optimization opportunities available to the federal government.
Digital Compliance Deadline Set for Large Corporations
The Nigeria Revenue Service has established Q2 2026 as the compliance deadline for large firms to implement e-invoicing systems, marking a significant shift toward digital tax administration. According to Business Day, the NRS announcement came during a tax stakeholder consultation in Abuja led by eTranzact, a digital payments solutions provider.
The e-invoicing mandate aims to enhance tax collection efficiency and reduce revenue leakages through real-time transaction monitoring. Large corporations will be required to integrate their accounting systems with NRS platforms, enabling automated reporting of invoices and strengthening the tax authority's ability to track commercial transactions. The phased implementation approach targets large firms first, with potential expansion to medium and small enterprises in subsequent phases.
E-invoicing systems have proven effective in other African jurisdictions, with Kenya's eTIMS platform contributing to improved VAT compliance since its 2022 rollout. Nigeria's adoption of similar technology represents part of broader efforts to modernize tax administration and expand the country's tax-to-GDP ratio, which stood at 10.86% in 2024 according to National Bureau of Statistics data.
Customs Service Delays Agent Fee Increases
The Nigeria Customs Service has postponed planned increases to licensing rates for customs agents pending completion of stakeholder consultations, Business Day reported. The decision to delay the fee adjustments reflects sensitivity to concerns raised by licensed customs agents regarding operational costs and the potential impact on trade facilitation.
Customs agents serve as critical intermediaries in Nigeria's import-export ecosystem, handling documentation and compliance requirements for businesses engaged in international trade. The NCS had initially proposed raising licensing fees as part of revenue enhancement measures, but opted to extend consultation periods before implementing changes that could affect the estimated 3,500 licensed customs agents operating across Nigerian ports and border stations.
The postponement indicates the government's attempt to balance revenue optimization objectives with maintaining operational efficiency in trade corridors. Nigeria's ports handled approximately $80 billion in trade value during 2024, with customs agents facilitating a substantial portion of clearance processes.
Coordinated Revenue Reform Strategy
The simultaneous initiatives from the House of Representatives, Nigeria Revenue Service, and Nigeria Customs Service represent coordinated efforts to address systemic revenue challenges. The N8 trillion annual loss from tax incentives and waivers has drawn particular scrutiny, with legislators examining whether existing exemptions deliver sufficient economic benefits to justify foregone revenues.
Nigeria's federal government collected N12.33 trillion in revenue during the first nine months of 2025, according to Central Bank of Nigeria data, falling short of budget targets amid persistent oil production challenges and widespread tax avoidance. The revenue reforms under consideration could significantly narrow fiscal deficits if successfully implemented.
The e-invoicing compliance deadline for Q2 2026 provides large corporations with approximately four months to complete system integration and staff training. Industry observers anticipate the NRS will issue detailed technical specifications and compliance guidelines in coming weeks to facilitate smooth implementation across affected businesses.
The House committee's review of tax incentives will likely examine sectoral exemptions, pioneer status provisions, and special economic zone benefits that have proliferated across multiple administrations. Rationalizing these incentives while maintaining investment attractiveness presents a delicate policy challenge for Nigerian authorities seeking to optimize revenue without deterring economic activity.