In a landmark fiscal reform, the Federal Government of Nigeria has officially empowered the newly established Nigeria Revenue Service (NRS) with borrowing rights and financial autonomy under the recently enacted Tax Administration Act, 2025. The new law, signed by President Bola Tinubu last month, is set to take effect from January 2026.
This development marks a significant shift in Nigeria’s tax administration framework, positioning the NRS not just as a collector of revenue but also as a strategic player in national economic policy.
Under Section 28 of the Act, the NRS is now legally authorized to obtain loans, overdrafts, or other credit facilities from any source to fund its operations.
“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,” the Act states.
Additionally, Section 22(a) grants the NRS access to 4% of total non-petroleum revenues it collects. These funds are appropriated by the National Assembly for both capital and recurrent expenditures, further guaranteeing financial sustainability.
Beyond borrowing, the Act introduces multiple income streams for the NRS. It can now accept grants-in-aid, donations, gifts, and endowments from both local and international donors. It also allows for monetizing its assets through leasing, sales, or hire arrangements.
In exchange for these extensive financial powers, the NRS is bound by stringent transparency requirements:
Annual audited reports must be submitted to the Finance Minister by June 30.
The reports must reach the Federal Executive Council and the National Assembly within 30 days.
Budget estimates for each fiscal year must be prepared by September 30.
These measures are designed to ensure that the financial independence granted to the NRS does not lead to fiscal mismanagement.
The Tax Act also assigns broader responsibilities to the NRS, transforming it from a passive tax collector to a proactive revenue authority. The Service is now empowered to:
Investigate tax fraud and evasion
Seize or freeze assets derived from tax violations
Maintain a national tax database
Monitor global tax trends
Advise on waivers and revenue losses
Furthermore, the law compels the NRS to collaborate with other government agencies to review tax regimes, suggest reforms, and use taxation as a tool to attract investment and stimulate economic growth.
Industry stakeholders have largely welcomed the new provisions. According to tax consultant Dr. Aminu Usman, “This law is a step in the right direction. It gives the Service the independence it needs to truly drive compliance and innovation in revenue generation.”
However, others have expressed caution. “With greater power comes the risk of abuse. What matters now is implementation and oversight,” said fiscal policy analyst Nkechi Obi.
The Tax Administration Act, 2025, represents a pivotal restructuring of Nigeria’s tax ecosystem. By empowering the NRS with borrowing rights and granting it greater autonomy, the Federal Government aims to enhance revenue collection efficiency, reduce dependency on oil income, and solidify tax as a tool for national development.
If successfully implemented, this reform could significantly improve Nigeria’s fiscal stability, boost investor confidence, and set a precedent for broader institutional autonomy in the public sector.