Nigeria’s tax revenue climbed to N7.44 trillion in Q1 2026, but still fell short of its budget benchmark by N2.24 trillion despite ongoing reforms under the new tax regime.

Data presented by the Nigeria Revenue Service at the Federation Account Allocation Committee meetings and obtained by Nairametrics showed that total collections between January and March 2026 reached N7.44 trillion against a prorated target of N9.68 trillion, reflecting a 76.87 per cent performance level.

The performance represents a notable drop compared to Q1 2025, when the then-Federal Inland Revenue Service surpassed its revenue target for the same period.

FAAC records for April 2025 showed that the FIRS generated N6.04 trillion in the first quarter of 2025, exceeding its N5.82 trillion target by N218.02 billion, representing a 103.74 per cent performance rate.

This points to a year-on-year increase of N1.40 trillion (23.2 per) cent) with collections rising from N6.04 trillion in Q1 2025 to N7.44 trillion in Q1 2026. However, despite the higher revenue, performance shifted from surpassing targets in 2025 to a significant shortfall against projections in 2026.

An analysis of the Q1 2026 revenue figures shows that Companies Income Tax and other non-oil taxes were the main drivers of the shortfall.

Companies Income Tax, Capital Gains Tax, and Stamp Duties collectively generated N3.75 trillion in the first quarter, falling short of the N5.05 trillion target by N1.30 trillion, reflecting a performance rate of 74.25 per cent.

Similarly, Companies Income Tax from upstream operations brought in N349.95 billion against a target of N523 billion, resulting in a N173.05 billion deficit.

Petroleum royalties also underperformed, with collections of N1.12 trillion compared to a N2.03 trillion target, leaving a shortfall of N909.25 billion and a performance rate of 55.10 per cent

VAT remained one of the more stable revenue streams during the quarter.

Total VAT collections stood at N2.42 trillion against a target of N2.49 trillion, representing a relatively marginal shortfall of N73.71 billion and a strong performance rate of 97.04 per cent.

In contrast, oil-related taxes outperformed most other revenue categories.

Petroleum Profits Tax and Hydrocarbon Tax rose to N1.62 trillion in Q1 2026, exceeding the N1.30 trillion target by N318.23 billion and recording a performance rate of 124.42 per cent.

However, gains from oil taxes were not enough to offset underperformance in Companies Income Tax, royalties, and several other revenue lines.

The report further revealed that mineral royalties and other mineral-related revenues recorded no inflows during the quarter, despite a combined target of N24 billion.