The Federal Government has granted the newly established Nigeria Revenue Service the legal authority to borrow funds for its operations from any source.
It also approved for the service to receive four per cent of the revenue collected to sustain its operations. These details were revealed in the signed copy of the Nigeria Tax Act, 2025, obtained by our correspondent on Sunday.
Recall that last month, President Bola Tinubu signed the Tax Administration Act 2025 into law, after months of intensive deliberation, the landmark legislation that significantly enhances the financial and operational independence of the Nigeria Revenue Service.
The new law, which takes effect in January 2026, enables the Service to raise fundfirss through loans, overdrafts, and other financial instruments to meet its statutory obligations.
According to Section 28 of the Act, “The Service may borrow by way of loan, overdraft or otherwise from any source, such sums as it may require for the performance of its functions and meeting of its obligations under this Act.”
Another major financial provision in the new law is the statutory 4 per cent retention of total non-petroleum revenues collected by the Service, as provided under Section 22(a) of the Act.
It stated, “The Service shall establish and maintain a fund which shall consist of, and to which shall be credited- Funds of the Service: 4 per cent of the total revenue, less petroleum royalty, collected by the Service, which shall be appropriated by the National Assembly for the capital and recurrent expenditures of the Service.”
Beyond borrowing and allocation, the law opens additional revenue channels for the NRS, allowing it to receive grants-in-aid, gifts, endowments, and contributions from both domestic and foreign sources, provided such donations are not at odds with its objectives.
It also allows the agency to raise money by leasing, selling, or hiring its properties, further widening its income streams. It said, “All sums of money accruing to the Service by way of grants-in-aid, gifts, testamentary dispositions, endowments, and contributions from any source;
“Such moneys as may be granted to the Service by the Federal, State, or Local Governments or other donor agencies, provided such grants are not intended for purposes contrary to the objective of the Act or functions of the Service; and
“All other moneys which may accrue to the Service from other sources, including charges for assistance in tax collection, the disposal, lease or hire of, or any other dealing with, any property vested in or acquired by the Service.”
In exchange for this autonomy, the Act imposes stricter transparency requirements. The NRS is now mandated to submit audited financial reports to the Minister of Finance annually, not later than June 30, with the reports to be forwarded to the Federal Executive Council and the National Assembly within 30 days.
It must also prepare yearly budget estimates by September 30 for parliamentary appropriation and ensure all accounts are audited within six months after each financial year. These measures, stakeholders believe, will provide guardrails against misuse of funds while encouraging strategic investment in tax collection and enforcement.
The law also reinforces the Service’s central role in economic development policy, mandating it to collaborate with ministries and agencies in using tax policy to stimulate growth, review tax regimes, and promote investments.
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