The Nigeria Revenue Service, NRS, has said money collected through taxes should not be treated as funds available solely to the Federal Government.
NRS Chairman Zacch Adedeji made the clarification in an interview on Channels Television’s Sunday Politics, as he addressed questions about government revenue and spending.
He said a significant share of federation revenue is shared with state governments, making the amount collected by the revenue service different from the money available for Federal Government projects.
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Adedeji also said revenue collection and budget spending are separate parts of the government’s financial system.
“No, and that is the understanding that people should get. There is a total difference between the budgeting system and the expenditure framework,” he said.
His comments responded to claims that higher government revenue had not produced matching capital spending, with some lawmakers raising questions about budget implementation and projects carried over from previous budgets.
Revenue shared with states
Adedeji said the NRS revenue should not be viewed as money belonging entirely to the Federal Government.
He said a significant portion of federation revenue is shared with states, meaning the money collected enters a system that serves the three levels of government.
The chairman also cited major infrastructure projects being pursued by the administration, including the Lagos-Calabar Coastal Highway and the Sokoto-Badagry Superhighway.
His explanation separates the work of collecting revenue from decisions on how government funds are budgeted and spent.
Adedeji said the two systems should not be treated as the same thing.
The NRS chairman also discussed the wider purpose of the tax system, saying the service wants businesses and individuals to earn more.
He said higher earnings would result in higher tax payments, giving the revenue service a financial interest in business performance.
“When business does well, the Nigerian revenue will do well, so we are not there to extract. That is not our focus. That is why you see more of my job as Chief Tax Officer is to make sure that businesses are doing well, because if you make 100 naira, I will take 30 naira. If you make 200, I will take 60. If you make 300, I will take 90.
“So, if I want to make more, I must work for you to make more. And that is why it is in the best interest of us in the Nigeria Revenue Service that businesses are doing well and individuals are doing well,” he said.
Tax rules changed in 2026
The comments came under Nigeria’s new tax regime, which took effect on January 1, 2026.
The regime replaced several existing tax laws with four principal laws covering taxation, tax administration, revenue collection and disputes involving taxpayers.
Individuals earning up to ₦800,000 yearly are exempt from personal income tax under the new system.
People earning above that amount face progressive tax rates of up to 25%. Eligible workers can also claim limited rent relief.
For businesses, companies with yearly turnover below ₦100 million are exempt from Companies Income Tax.
Larger companies generally pay 30% Companies Income Tax and a four per cent development levy. Large multinational companies also face a 15% minimum effective tax rate.
The Value Added Tax rate is 7.5%. Basic food items, medicines, healthcare and education are among essential goods and services receiving zero-rating.
The tax changes also cover capital gains from assets such as cryptocurrencies and other digital assets.
The system requires stricter compliance, including the use of the National Identification Number as a Tax Identification Number.
Adedeji said the government’s economic policies are also intended to create conditions that allow businesses and individuals to earn more.
He cited reforms in the power sector and higher allocations to state governments as part of the changes.
He said states have a major responsibility in reducing poverty because they are closer to citizens, particularly through primary and secondary education.
The chairman also cited the Nigerian Education Loan Fund, NELFUND, as a Federal Government intervention aimed at helping people improve their economic prospects.
“For us in Nigeria Revenue Service, it’s not about extracting. It’s about making the country prosperous. Mr President has said it publicly. We are not here to tax poverty. We are here to tax prosperity. That is what our duty is, to make sure people prosper. That is our responsibility,” he said.
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