President Bola Tinubu on Wednesday revealed that Nigeria’s tax-to-GDP ratio has risen to 13.5 per cent from around 10 per cent.
Nigeria previously had a tax-to-GDP of 10.8 per cent, and Mr Tinubu, on assumption of office, vowed to boost this to 18 per cent above African peers like Cote d’Ivoire, Cameroon, and Senegal, among others, who have between 15 per cent and 16 per cent.
Tax-to-GDP ratio is a measure that compares all the money the government collects from taxes (tax revenue) to the total value of goods and services produced in the country within a period (GDP). According to analysts, low ratios often indicate widespread tax evasion, narrow tax bases, or weak collection systems.
During his Independence Day speech yesterday, the President said the worst was over as evidenced by Nigeria’s economy recovering rapidly, with a 4.23 per cent gross domestic product (GDP) growth in the second quarter (Q2) of 2025.
“Our tax-to-GDP ratio has risen to 13.5 per cent from less than 10 per cent. The ratio is expected to increase further when the new tax law takes effect in January.
“The tax law is not about increasing the burden on existing taxpayers but about expanding the base to build the Nigeria we deserve and providing tax relief to low-income earners,” he stated.
Mr Tinubu on June 26, 2025, signed four keenly contest tax bills into law, these laws back reforms to establish a new foundation for taxation, administration, and revenue collection.
The four legislations are: Nigeria Tax Act (NTA), 2025, Nigeria Tax Administration Act (NTAA), 2025, Nigeria Revenue Service (Establishment) Act (NRSEA), 2025, and the Joint Revenue Board (Establishment) Act (JRBEA), 2025.
While the implementation timeline for the Nigeria Tax Act and Nigeria Tax Administration Act takes effect on January 1, 2026, the Nigeria Revenue Service (Establishment) Act and Joint Revenue Board (Establishment) Act have become effective since June 26, 2025.
“These reforms aim to simplify Nigeria’s tax system, support small businesses, attract investment, and strengthen fiscal stability, aligning with President Tinubu’s Renewed Hope Agenda to diversify revenue away from oil,” the presidency said in a gazette statement to the effect, last month.