Tax revenue is surging under Zacch Adedeji. Can citizens trace where it goes? Inside Nigeria’s audit gap

By Daniel Nduka Okonkwo

Tax Revenue Is Surging Under Zacch Adedeji. Can Citizens Trace Where It Goes? Inside Nigeria’s Audit Gap

By Daniel Nduka Okonkwo

Nigeria is collecting more public revenue than ever before. Under Zacch Adedeji, the revenue machinery has undergone a major expansion in collection, digital administration, and enforcement, producing figures that would have been difficult to imagine only a few years ago. The Federal Inland Revenue Service recorded ₦12.36 trillion in 2023 against a target of ₦11.55 trillion, and ₦21.7 trillion in 2024 against a target of ₦19.7 trillion. The Nigeria Revenue Service then reported ₦28.3 trillion in 2025, above its ₦25.2 trillion target, and ₦21.6 trillion in the first half of 2026 alone, compared with ₦14.27 trillion in the same period of 2025. The numbers tell one story clearly: the state has become significantly better at collecting money. But Nigeria’s own legal framework does not stop at collection. It requires revenue to be accounted for. That is where the harder question begins: as government becomes more capable of identifying, assessing, and collecting the naira, can citizens and the institutions charged with oversight trace that same naira through the Federation Account, budgets, releases, procurement, and actual public expenditure? The issue is not whether revenue should be collected. It is whether the public can follow the money after it has been collected, and whether Nigeria’s audit system is equipped, independent, and sufficiently empowered to verify where it goes.

Over the same period, the Federal Audit Service Bill, which would modernise the country’s audit framework, has remained without presidential assent. The Senate approved the bill on December 18, 2025, completing its passage through the National Assembly. Almost five months after the bill had been transmitted to the President, it had neither been assented to nor vetoed. A recent report has continued to describe the President as yet to assent to it. The United States Department of State’s 2024 Fiscal Transparency Report listed Nigeria as meeting its minimum fiscal transparency requirements for the 2023 review period. The 2026 assessment, covering 2025, found that Nigeria did not meet the minimum requirements. Public reporting on the assessment also said Nigeria made no significant progress. The Presidency responded that the report should be understood as a compliance benchmark rather than a comprehensive assessment of all of Nigeria’s public-finance reforms.

The contrast raises a question that goes beyond tax collection: as the state becomes increasingly effective at seeing money arrive, how effectively can citizens see where it goes?

The collection story deserves its credit first. Tax administration has moved onto digital platforms, including TaxPro-Max, e-invoicing, and other technology-driven systems, while the revenue authority has continued to expand digitalisation and data use. According to its official platform, the Nigeria Revenue Service offers taxpayers digital services for e-invoicing, self-filing, payments, tax clearance, assessments, and refunds, and provides access to tax laws and revenue-performance information.

A 16-storey headquarters that had stood unfinished for more than two decades was, according to published reports, completed and commissioned by President Bola Tinubu in April 2026. Four major laws, the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Establishment Act, and the Joint Revenue Board Establishment Act, took full effect on January 1, 2026. The Nigeria Tax Administration Act sets out the framework for the assessment and collection of taxes under the new regime.

The stated design is pro-poor. Under the new tax framework, the first ₦800,000 of annual chargeable personal income is taxed at zero per cent, while the new regime also provides relief for small businesses and for specified essential goods and services. VAT remains at 7.5 per cent, while the law relieves specified basic food, medical, and educational items and services from the tax.

Dr Zacch Adedeji has repeatedly said his aim is to tax prosperity and not poverty. Measured by reported collections, the revenue authority has recorded a substantial increase. One caution belongs beside the headline figures. The 2026 revenue target of ₦40.71 trillion is 44 per cent above the 2025 target, and comparisons across years must account for changes in the scope of revenue administration, including the consolidation of petroleum and mineral royalties under the NRS, work previously handled by more than 60 federal agencies. That means the collection figures are significant, but they should not be treated as perfect like-for-like measures of tax performance across every year.

The harder question is what that revenue performance has delivered to the people the reforms were designed to serve.

That question begins with prices.

The National Bureau of Statistics recorded headline inflation of 34.80 per cent in December 2024, up from 28.92 per cent a year earlier. The index was subsequently rebased, which lowered later readings, so the 34.80 per cent figure is a snapshot of 2024 rather than a description of today’s inflation rate. But it covers the period in which tax collections were rising sharply.

Higher tax collections did not cause that inflation, and the available records do not establish such a causal relationship. They do, however, show the difference between a statutory exemption and its practical effect on household welfare. A legal exemption on food may remove VAT from a transaction, but the benefit to a household is ultimately experienced in the price it pays at the market.

The Federation Account records show what happens next, and they are less dramatic than some political claims.

FAAC shared ₦2.300 trillion for May 2026, of which the Federal Government received ₦818.680 billion, state governments ₦759.141 billion, and local government councils ₦534.277 billion, with a further ₦188.132 billion going to oil-producing states as derivation. A year earlier, the May 2025 sharing was ₦1.659 trillion, with the Federal Government receiving ₦538.004 billion, states ₦577.841 billion, and local governments ₦419.968 billion.

By simple arithmetic, the shared pool was about 39 per cent higher year on year, the Federal Government’s share about 52 per cent higher and the states’ share about 31 per cent higher.

That is a real increase. It is nowhere near the several-fold jumps sometimes claimed in public debate.

It also means the question for governors is what a roughly one-third rise in monthly allocation has produced in hospitals, roads, and water. The answer sits in state budgets, releases, procurement records, and audited accounts.

The gross revenue available in May was ₦3.395 trillion, from which ₦123.546 billion was deducted as cost of collection and ₦971.610 billion was allocated to transfers, interventions, and refunds before the ₦2.3 trillion was shared.

Nearly a trillion naira in a single month passed through that category before reaching any tier of government.

Nothing in the public summaries establishes impropriety, and the deductions are made under existing arrangements. But a category of that size deserves to be itemised in public.

The investigative question is not whether the deduction was automatically improper.

It is what each component represents, who received it, under what authority, and where the supporting records can be independently examined.

The federal budget records explain part of the distance between record collections and visible delivery, and they raise sharper questions of their own.

The Budget Office’s third-quarter report for 2025 shows total federal revenue of ₦18.63 trillion for January to September 2025 against a prorated target of ₦30.67 trillion, a gap of ₦12.04 trillion, with debt service of ₦12.52 trillion taking more than 67 per cent of that revenue.

The Finance Ministry has attributed the pressure largely to oil, saying Federation oil and gas revenue was projected at ₦37.4 trillion for 2025 but actual inflows were about ₦7 trillion, roughly 19 per cent of the projection.

The approved 2026 budget puts expenditure at ₦68.32 trillion, with projected revenue of about ₦36.87 trillion and a deficit of about ₦31.46 trillion. Debt service is projected at approximately ₦15.8 trillion, while capital expenditure is about ₦32.29 trillion. Gross Federation Account resources are shared across the Federal Government, states, local governments, and other statutory recipients, rather than accruing exclusively to the Federal Government.

Two things follow.

Record NRS collections are gross figures shared across three tiers of government, and the Federal Government’s own fiscal position is constrained by the difference between projected and realised revenues, debt service, and other obligations.

The accountability question, therefore, cannot stop at the tax office.

It extends to why federal budgets are built on revenue assumptions that can be missed so substantially, how the resulting shortfalls are financed, and whether the borrowing and expenditure that follow can be independently traced.

The spending records show another part of the problem: releases can lag appropriations.

In February 2026, the Accountant-General of the Federation announced that only 30 per cent of the 2025 capital budget would be implemented up to November 30, 2026, with the remaining 70 per cent rolled over into the 2026 capital budget. The Senate extended the implementation period for the 2025 capital budget three times, most recently to September 30, 2026.

During the 2026 budget defence, Health Minister Mohammed Pate told lawmakers that only ₦36 million of ₦218 billion allocated for his ministry’s 2025 capital projects had been released, while Transport Minister Saidu Alkali said about one per cent of his ministry’s ₦256.73 billion capital budget was released, forcing nearly 70 per cent of projects to be rolled over.

The Finance Ministry has offered a different aggregate picture, saying capital spending for 2025 was about ₦11.7 trillion as of November, roughly 76 per cent, and that the 2024 capital budget was largely implemented in 2025.

These figures should not automatically be treated as contradictory. They cover different institutions, periods, and accounting bases. But they create an apparent discrepancy that the public should be able to reconcile.

That is precisely the kind of discrepancy an independent audit institution should be able to examine and resolve.

The reforms are also still being reviewed.

On September 17, 2026, Finance Minister Taiwo Oyedele inaugurated a Technical Subcommittee on Fiscal Policy and Tax Reforms and gave it six weeks to report. The subcommittee is to review VAT thresholds, withholding tax, capital gains treatment, and multiple taxation, and to help inform the Finance Bill 2027.

The exercise follows public submissions and concerns about implementation, ambiguities, and unintended consequences that have emerged since the new laws took effect. The government received 134 formal submissions from across the six geopolitical zones. Oyedele said the exercise is not intended to reverse the 2025 reforms, but to preserve their core principles while responding to lessons from implementation and emerging economic realities.

The review, therefore, raises a legitimate question about how implementation risks were assessed before the laws took effect and how those risks were communicated to taxpayers.

The international record adds another layer.

The U.S. Department of State’s 2024 Fiscal Transparency Report, which assessed the 2023 review period, listed Nigeria among the governments meeting the minimum requirements of fiscal transparency. The Department’s criteria included public availability and reliability of key budget documents, the independence of the supreme audit institution, its access to government financial statements, and the public disclosure of audit reports. The Department also expressly cautioned that a failure to meet minimum fiscal-transparency requirements does not, by itself, establish significant corruption.

U.S. Department of State’s 2026 assessment, covering 2025, reached a different conclusion. Nigeria was among the governments reported as not meeting the minimum requirements, while public reporting said the country made no significant progress. The assessment reportedly identified weaknesses in budget disclosure, revenue and expenditure reporting, audit independence, and procurement transparency, while acknowledging progress in the availability of budget documents and debt information. It reportedly found that budget documents did not give a substantially complete picture of revenues and expenditures, that the executive budget proposal was not published within the required timeframe, and that the Auditor-General’s office did not meet international standards of independence and had not published substantive reports.

The Presidency responded in August. President Tinubu’s media adviser, Sunday Dare, argued that the report should be understood as a limited compliance assessment rather than a comprehensive audit of all public-finance reforms, pointing to the Open Treasury platform and other disclosures.

The significance is not that a U.S. report automatically determines the state of Nigeria’s public finances. It does not.

The significance is that an external fiscal-transparency benchmark identified weaknesses in public financial disclosure and audit-related standards at precisely the point when Nigeria’s domestic revenue collection was reaching record reported levels.

What the record also shows is that the institution, the Department, does not meet international standards of independence, which is the one the Federal Audit Service Bill is intended to strengthen.

That makes the audit question harder to avoid.

The issue confronting Nigeria is not whether every government financial record is invisible. It is whether the available records are sufficiently connected, complete, and independently verified for a citizen to follow public money from collection to expenditure.

Nigeria has an Open Treasury system, published budgets, FAAC records, Budget Office implementation reports, procurement information, and other fiscal disclosures.

The question is whether those separate records can be reconciled into one independently verifiable trail.

The bill’s own record explains why that matters.

The Federal Audit Service Bill is designed to strengthen the institutional framework through which federal public expenditure is audited. Civil society groups have described the existing audit framework as outdated and argued that the proposed legislation would establish a modern Federal Audit Service with expanded powers for the Auditor-General for the Federation.

The bill would establish an autonomous Federal Audit Service and a Federal Audit Board, strengthen the independence and functions of the Auditor-General, and introduce statutory timelines for the submission and auditing of government financial statements.

The reporting goes further. It reports that the bill would require accounting officers of statutory corporations, agencies, and other bodies established by an Act of the National Assembly to submit audited financial statements to the Auditor-General within 90 days of the end of the financial year, with a fine of ₦500,000 for failure. It also reports that the bill would give the Auditor-General additional financial and enforcement powers, including the ability to surcharge public officers for expenditures not duly brought into account and to withhold the emoluments of anyone who does not reply to an audit query within 30 days.

It also reports that the latest published audited consolidated federal financial statements before the National Assembly were still those for 2022, and that the Auditor-General had yet to receive the government’s statements for 2023, 2024, and 2025. In February, the House Public Accounts Committee directed the Accountant-General and the Auditor-General to submit audited statements for those three years by October 2026. In May, the Accountant-General reportedly promised to submit the 2023 statements to the Auditor-General within two weeks. As of the paper’s filing, that had not been done, which left the Auditor-General without the material to audit. The paper also noted, citing experts, that no statutory deadline currently binds the Accountant-General to submit the federal statements, whereas the bill would set June 30 of the following year.

That deadline falls next month.

On that account, the federal government’s accounts for three financial years had not reached the Auditor-General, and the audit institution had nothing to examine.

The Constitution gives the President thirty days from presentation of a bill to assent to it or withhold assent and communicate the reasons to the National Assembly.

It has been almost five months since the Federal Audit Service Bill was transmitted to President Bola Tinubu, and it has neither been assented to nor vetoed. The report also said efforts to obtain comments from presidential spokespersons were unsuccessful.

The Centre for Social Justice wrote to Senate President Godswill Akpabio in June asking the National Assembly to consider an override under Section 58(5), saying it was not in the public domain that the President had sent lawmakers any reasons for declining assent, and noting that earlier versions of the bill were withheld by Presidents Obasanjo, Jonathan, and Buhari.

The documentary question remains simpler:

What is the current status of the bill, and what action, if any, has been formally communicated to the National Assembly?

The contrast with the government’s revenue reforms is striking, but it should be stated carefully.

The laws that widened and reorganised the machinery for tax administration took effect on January 1, 2026.

The legislation designed to strengthen the institutional framework for federal auditing has, according to the latest public reporting examined for this investigation, remained without presidential assent after transmission.

The machinery for collecting public money has undergone substantial statutory and technological change, while the legislative framework intended to strengthen scrutiny of federal expenditure remains unresolved.

At the unveiling of the Auditor-General’s strategic plan for 2024 to 2028, President Tinubu, represented by the Secretary to the Government of the Federation, George Akume, said he would sign the Federal Audit Service Bill as soon as it reached him, presenting the measure as part of his determination to strengthen the fight against corruption.

The bill has since reached the presidency.

The relevant question is whether that commitment has been fulfilled and, if not, what formally explains the delay.

Civil society has also struggled to fill the accountability gap.

A coalition of nine civil society organisations that had previously raised allegations against the revenue authority’s leadership later apologised, saying the earlier claims were based on unverified information, and praised the agency’s reforms.

Separately, another coalition of more than 72 groups publicly defended Adedeji and accused unnamed interests of paying groups to attack him.

Those competing positions illustrate a wider problem.

Without access to complete forensic records, watchdogs can struggle either to substantiate serious allegations or conclusively dispose of them, leaving the public to navigate competing petitions, denials, endorsements, and counterclaims.

The solution is not to choose one side.

It is to make the records strong enough that neither side can substitute assertion for evidence.

That is why the records, rather than the competing statements, must settle the matter.

The FAAC communiques, Budget Office implementation reports, Treasury records, procurement documents, state audit reports, and National Assembly records can show whether the money reconciles from the Nigeria Revenue Service to the Federation Account, through FAAC into budgets, releases, and contracts, and on to completed roads, hospitals, water projects, and schools.

Where two official figures differ, both belong in the record.

The difference should be calculated.

The basis for each figure should be identified.

If the records reconcile, the investigation should say so.

If they do not, the difference should be quantified.

If an explanation exists in an official document, that explanation should be examined.

If the public record does not explain the difference, the gap should remain a gap rather than being filled with assumptions.

That is the difference between an allegation and an investigation.

Adedeji has shown that Nigeria can collect.

The reported figures demonstrate a substantial increase in revenue collection, from ₦12.36 trillion in 2023 to ₦21.7 trillion in 2024 and ₦28.3 trillion in 2025, with ₦21.6 trillion reported in the first half of 2026.

But collection is only the beginning of the financial trail.

A naira collected by the revenue authority is not automatically a naira available to the Federal Government for discretionary spending.

It may pass through the Federation Account.

It may be distributed through FAAC.

It may enter a federal, state, or local government budget.

It may be released.

It may be committed through procurement.

It may be paid to a contractor.

It may appear as expenditure.

And ultimately, it should be possible to establish whether the project or service for which the money was appropriated actually exists and functions.

That is where the audit system matters.

The question is therefore no longer simply how much Nigeria collects.

It is what happens to the money after collection.

If the state can increasingly trace a naira on its way into the treasury, can citizens trace that same naira on its way out?

Nigeria has become better at seeing money come into the public purse.

The real test of fiscal accountability is whether citizens can see, with the same precision, where it goes.

Daniel Nduka Okonkwo is an investigative journalist, human rights advocate, and policy analyst based in Nigeria. He is the founder and publisher of Profiles International Human Rights Advocate (PIHRA), a platform documenting the courage of human rights defenders and examining issues of governance, accountability, security, and fundamental rights.

His reporting on Nigerian governance, security-sector accountability, public finance, and human rights has appeared in Sahara Reporters, Vanguard, Daily Trust, African Defence Forum, Opinion Nigeria, and Daily Intel.

Read more of his work on the PIHRA website:
https://www.profilesinternationalhumanrightsadvocate.com.ng/

For tips, feedback, or collaboration, contact him at dan.okonkwo.73@gmail.com.