Federation account inflows hit N23tn in 10 months – RMAFC

RMAFC Chairman, Dr Mohammed Shehu, delivering his address at the event. Photo: RMAFC.

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The Revenue Mobilisation Allocation and Fiscal Commission has said inflows into the Federation Account rose to N23.06 trillion in the first 10 months of 2025, attributing the increase to fiscal reforms, stronger audits and improved coordination among revenue agencies.

The Chairman of the commission, Mohammed Shehu, disclosed this on Monday in Abuja while delivering his keynote address at a two-day National Stakeholders’ Discourse on Enhancing Fiscal Efficiency and Revenue Growth under the Nigeria Tax Act, 2025.

Shehu said, “The ten months accruals into the Federation Account in the period January to October, 2025 was N23,058,248,707,725.50 only,” describing the figure as evidence of growing fiscal discipline and improved revenue mobilisation.

According to him, the surge in inflows marked a steady improvement over previous years, with total gross accruals standing at N11.93tn in 2023 and N21.43tn in 2024.

He explained that the growth was driven by “fiscal reforms, tracking and coordination among revenue agencies, stronger audits, digital tracking, and fiscal reforms,” noting that the measures had expanded the revenue pool available for distribution to the Federal, State and Local Governments.

Shehu said the trend reflected progress towards a more resilient and sustainable public finance system with reduced dependence on oil earnings, adding that volatile crude prices had historically exposed the country to boom-and-bust revenue cycles that undermined fiscal stability and long-term planning.

“The Nigerian economy had suffered from boom-bust cycles driven by volatile oil prices, creating unpredictable revenue streams that undermine long-term planning and fiscal stability,” he said.

The RMAFC chairman said the Nigeria Tax Act, 2025, which will take effect on January 1, 2026, was designed to address these structural weaknesses by harmonising previously fragmented tax laws into a single statute.

He said the Act would eliminate duplication and obsolete provisions, reduce compliance burdens for taxpayers and enhance the ease of doing business across the country.

“The Nigeria Tax Act, 2025, has not only harmonised the hitherto Nigeria’s fragmented tax laws into a single statute, but it has also reduced or eliminated duplication and obsolete provisions while enhancing ease of doing business,” Shehu stated.

He added that the reforms would create a more coherent and predictable fiscal environment while eliminating regional differences in tax administration.

Shehu also linked the improving revenue profile to broader macroeconomic developments under the current administration, citing declining inflation and relative stability in the foreign exchange market.

He said inflation had dropped consecutively over four months, from 21.88 per cent in July to 16.05 per cent in October, while the naira exchange rate strengthened from N1,534 to the dollar in July to N1,428 in October.

According to him, the economy continues to grow, driven largely by the services and non-oil sectors, even though oil still accounts for over 90 per cent of export earnings while contributing less than 10 per cent to gross domestic product.

On the role of the commission, Shehu said RMAFC would intensify monitoring of revenue collections and disbursements from the Federation Account through enhanced oversight, forensic audits and stronger collaboration with subnational governments on non-oil revenue mobilisation.

Also speaking at the event, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Prof. Taiwo Oyedele, said the Nigeria Tax Act, 2025, was designed to correct decades of structural weaknesses in the country’s tax system and promote fairness, efficiency and economic growth.

Oyedele said Nigeria’s tax system had become overly complex and punitive, stressing that incremental fixes were no longer sufficient.

“These reforms should have been done 20 or 30 years ago. Things got so bad with our tax system that incremental fixing would no longer solve the problem. We needed a transformation,” he said.

He explained that the reforms repealed major existing tax laws and replaced them with new ones to stop what he described as “taxing poverty, capital and investments” using outdated statutes inherited from the colonial era.

According to him, the core objectives of the reforms include fairness, harmonisation, ease of doing business, transparency in the use of tax revenues and overall economic development.

Oyedele said the committee deliberately focused on efficiency rather than introducing new taxes, warning that the proliferation of levies across tiers of government had created leakages, corruption and heavy burdens on small businesses and vulnerable citizens.

He disclosed that under the new tax laws, low-income earners, including those on the national minimum wage, would be exempted from personal income tax from January 2026, while middle-income earners would see reductions in their PAYE obligations.

He added that the reforms also targeted lower living costs by zero-rating essential consumptions such as food, transport, health, education and rent for value-added tax, explaining that businesses would be refunded VAT incurred in producing such goods to prevent hidden taxes being passed on to consumers.

He also said the reforms were structured to raise government revenue without introducing new taxes, by closing tax gaps, removing wasteful incentives and improving compliance.

“We found a wide tax gap in Nigeria. Many people were not paying the right amount of tax based on the law. When you fix that problem and remove wasteful incentives, you make more money and make the economy work better,” he said.

On capital markets, Oyedele said the new tax laws exempted most investors from capital gains tax, adding that the reforms were aimed at deepening the market and supporting long-term economic growth.

He cautioned against misinformation, noting that false narratives around the reforms had previously triggered market panic and eroded public trust.

Also speaking at the discourse, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Dr Jani Ibrahim, said the Nigeria Tax Act, 2025, was a major step towards strengthening revenue mobilisation, improving tax administration and promoting fiscal sustainability across all tiers of government.

In a goodwill message, Ibrahim commended the commission for convening what he described as a “high-level engagement” at a “pivotal moment” in Nigeria’s economic trajectory.

He said NACCIMA, as the apex body representing the organised private sector with over 100 city, state and bilateral chambers of commerce, believes a modern, efficient and equitable tax system is critical to economic growth.

According to him, clear and predictable tax policies would help businesses invest, expand and create jobs, while boosting national revenue.

He also welcomed RMAFC’s commitment to collaboration, transparency and evidence-based policymaking, describing them as essential to strengthening trust and long-term partnership between government and the private sector.

In his welcome address, a Federal Commissioner at the RMAFC and Chairman of the Fiscal Efficiency and Budget Committee, Desmond Akawor, described the discourse as a defining moment in Nigeria’s fiscal journey.

Akawor said the decisions taken at the event would have long-term implications for the country’s public finances.

“The choices we make today will shape the stability, sustainability and resilience of Nigeria’s public finances for many years to come,” he said.

He explained that the Nigeria Tax Act, 2025, was designed to modernise tax administration, strengthen compliance frameworks, close revenue leakages and expand the revenue base across all tiers of government.

Goodwill messages at the opening ceremony indicated broad stakeholder support for the reforms.

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, who was represented by the Deputy Governor for Financial System Stability, Mr Philip Ikeazor, said the reforms were aimed at broadening the tax base, improving compliance and reducing Nigeria’s dependence on oil revenues.

He added that the reforms would also strengthen transparency through a modernised and digitalised tax administration system.

The surge in Federation Account inflows comes amid concerns by Cardoso over the inflationary risks associated with rising liquidity in the financial system.

The PUNCH in July 2025 reported that Cardoso had warned that increasing statutory revenue disbursements through the Federation Account Allocation Committee could undermine the Central Bank’s disinflation efforts if they are not complemented by tight monetary conditions.

In his personal statement released after the 300th meeting of the Monetary Policy Committee held on May 20, 2025, and published on the CBN’s website, the apex bank governor noted that although inflation had begun to moderate, growing liquidity injections into the economy posed emerging risks that required sustained monetary vigilance.

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