The Nigeria Revenue Service has warned that persistent tax leakages, delayed remittances and weak compliance by some government institutions and sub-national entities could threaten its target of generating about N40tn in revenue for the federation in 2026.

Nairametrics reported that the agency raised the concern on Tuesday at the National Workshop on Strengthening Tax Compliance Under the New Tax Regime held at the Transcorp Hilton Hotel, Abuja.

Officials from the Federal Government, states, Ministries, Departments and Agencies, and revenue authorities gathered to discuss strategies for improving tax compliance and revenue collection.

Speaking at the event, the Executive Director, Large Taxpayer and Government Directorate at the NRS, Ms Amina Ado, said the service had uncovered significant gaps in tax remittances during its monitoring and audit activities.

She said the ambitious revenue target would require transparency and stronger collaboration among all levels of government.

“This workshop is coming at a time when the Nigeria Revenue Service has taken the huge responsibility of raising about N40tn in tax revenue for the Federation. This historic goal requires us to approach our compliance gaps with sincerity and complete transparency,” she said.

Ado stated that although some sub-national entities had demonstrated strong compliance, the agency had identified structural leakages, particularly in the deduction and remittance of Value Added Tax and Withholding Tax.

“Our field monitoring and audit activities have revealed that while many sub-national entities are exemplary in their civic duties, there are still some significant structural leakages, especially in the prompt deduction and delay in remittance of Value Added Tax and Withholding Tax,” she said.

According to her, the situation had created distortions within the country’s fiscal framework.

“Whereas some jurisdictions work hard to fill the national revenue pool while others participate in the distribution without making their fair contribution, this compliance gap distorts and creates an imbalance in our fiscal federalism,” she added.

She noted that the NRS was seeking to shift its relationship with government institutions from an “enforcement-heavy friction” model to a collaborative compliance framework supported by technology-driven remittance systems and transparent processes.

In his keynote address, the Executive Chairman of the NRS, Dr Zacch Adedeji, represented by the Executive Director, Finance and Corporate Services, Mr Muhammad Lawal, described the N40tn target as a “Herculean task.”

Adedeji said the agency’s focus was to sustainably finance the Federation Account Allocation Committee, which he described as the financial lifeblood of the three tiers of government.

“Our major role at the Nigeria Revenue Service is to sustainably finance the Federation Account Allocation Committee. This fund is the financial lifeblood of the three tiers of government, and it is used to finance the critical developmental projects that our citizens depend on,” he said.

He explained that the workshop was designed to address persistent compliance bottlenecks, improve awareness among MDAs and Government-Owned Enterprises on their statutory tax obligations, and reduce transitional challenges arising from the new tax laws.

“This workshop is also expected to bridge the compliance gaps we regularly find in our monitoring and audit activities, set up direct communication channels to address structural bottlenecks, improve revenue collection and encourage absolute transparency and timeliness in tax remittances,” he said.

Adedeji said the service intended to move away from an enforcement-dependent approach to a framework based on voluntary compliance and institutional collaboration.

“Our goal is to move away from an enforcement-dependent approach and move to a collaborative, voluntary compliance framework where every institutional stakeholder contributes its fair share to our collective national prosperity,” he stated.

He warned that an imbalance in compliance across states and government-owned enterprises was damaging institutional fairness and undermining the broader tax culture.

“We have a report about the imbalance in the compliance existing among states and GOEs, which does great damage to institutional fairness, undermines the broader compliance culture and unfairly burdens compliant States,” he said.

“There must be a change in this story going forward as every level of government has to do its part responsibly to contribute to the national revenue pool that we all draw from.”

The NRS chairman also announced plans to introduce a recognition initiative for the most tax-compliant states beginning from 2026.

“Starting this year, 2026, the Service will launch an initiative to identify the most tax-compliant States across multiple dimensions. Excellence deserves recognition, and we look forward to honouring our top performers at the end of the year,” he added.

The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, who was represented by his Chief of Staff, Mr Tolu Adegbie, said the country’s tax reforms were aimed at reducing dependence on volatile revenue sources and creating a more stable and equitable fiscal system.

“It is my honour to welcome you all to this national workshop on strengthening tax compliance in our new tax regime; collaborating with sub-national governments for enhanced tax collection, an engagement that comes at a critical juncture in Nigeria’s economic development,” he said.

Oyedele said the reforms formed part of wider structural changes being implemented by the Federal Government, including the floating of the naira, fuel subsidy removal and efforts to tackle inflation.

“The new tax regime is a key part of our wider structural reform agenda, designed purposefully to move our economy away from reliance on volatile revenue sources towards a stable, predictable and equitable tax-based platform,” he stated.

He added that the government intended to expand the tax net without increasing the tax burden on Nigerians.

“The opportunity is to reform our tax space, expand the tax net without increasing the tax burden and encourage voluntary compliance and use technology to plug leakages,” he said.

The minister stressed that fiscal federalism could succeed only through accountability and shared responsibility across all tiers of government.

“True fiscal federalism cannot be a one-way street, for it can only flourish on the basis of shared commitment and mutual accountability,” he said.

Also speaking, the Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, said Nigeria needed stronger institutional coordination and efficient domestic resource mobilisation to achieve sustainable development.

He said the success of the new tax regime would depend largely on collaboration between the Federal Government and sub-national entities.

He said technology and innovation must remain central to tax administration reforms.

Ogunjimi added that transparency and accountability in the management of public funds would encourage voluntary tax compliance among citizens.

The Chairman of the Forum of Finance Commissioners and Ekiti State Commissioner for Finance, Akintunde Oyebode, said state governments were committed to strengthening collaboration with the NRS to improve revenue generation.

He said the controversial nature of some tax reforms had ultimately produced stronger laws that improved tax collection nationwide.

Oyebode said states and the Federal Government shared a collective responsibility to increase tax revenue to support national development goals, including power, security, healthcare, education, and job creation.

He added that closer cooperation between state governments and the NRS would help improve data sharing and tax administration, especially within the informal sector.

“Only 10 per cent of the payroll is actually in salary or wage-paying jobs. Ninety per cent of Nigeria’s employers sit in a diverse and often very dark informal sector,” he said.

Oyebode noted that stronger partnerships between federal and state revenue authorities would help expand the tax base, improve voluntary compliance and strengthen overall revenue generation.

The PUNCH earlier reported that the Executive Chairman of the National Revenue Service, Dr Zacch Adedeji, said the agency is targeting N40.7tn in revenue for 2026 from taxes, petroleum earnings, mineral royalties and other sources, citing the impact of the Federal Government’s ongoing tax reforms.