Tax Reforms Yield Early Gains as Non-oil Revenue Hits N2.4trn

Nigeria’s non-oil revenue surged to N2.40 trillion in February 2026, accounting for 76.57 per cent of total federation revenue during the month.

The latest Economic Report released by the Central Bank of Nigeria (CBN) showed that provisional gross Federation Account revenue rose by 16.94 per cent to N3.14 trillion in February from the previous month, driven largely by improved collections from non-oil sources.

The report noted that “provisional data indicated improved revenue performance, largely on account of higher non-oil receipts, which reflected early gains from the 2025 tax reforms.” A breakdown of the figures showed that non-oil revenue increased by 28.85 per cent to N2.40 trillion from N1.86 trillion recorded in January 2026.

According to the report, the growth was “driven mainly by corporate taxes and value-added tax (VAT), which rose by 94.00 and 18.51 per cent, respectively.” Value Added Tax emerged as the largest contributor to non-oil revenue at N1.08 trillion, accounting for 45.07 per cent of total non-oil receipts, while corporate tax contributed N912.38 billion or 37.97 per cent.

In contrast, oil revenue fell by 10.18 per cent to N735.13 billion owing to lower receipts from petroleum profit tax and royalties despite improvements in global crude oil prices during the period. The report noted that “oil revenue, at N0.74 trillion, declined by 10.18 per cent, compared with the level in the preceding month, owing to lower receipts from petroleum profit tax (PPT) and royalties.”

The stronger non-oil performance translated into higher distributable revenue for the three tiers of government. Out of the N3.14 trillion gross federation revenue generated in February, a net sum of N1.90 trillion was distributed to the Federal Government, state governments and local government councils after statutory deductions and transfers.

The Federal Government received N525.23 billion, while states got N767.29 billion and local governments received N517.29 billion. Oil producing states also received N90.19 billion as 13 per cent derivation revenue.

The report further showed that from the gross federation receipt of N3.14 trillion, a net sum of N1.90 trillion was distributed to the three tiers of government after statutory deductions, transfers, and additional revenue adjustments.

Among the states, Lagos emerged as the highest recipient of federation allocation with N195.09 billion, followed by Rivers State with N63.57 billion, Delta State with N61.73 billion, Oyo State with N54.86 billion and Kano State with N52.17 billion.

On the other hand, Ebonyi State received the lowest allocation at N21.56 billion, followed by Nasarawa with N22.41 billion, Gombe with N22.56 billion, Ekiti with N23.00 billion and Taraba with N23.45 billion.