The Nigeria Revenue Service Act, 2025: Reinventing Nigeria's Tax Authority for the Future.

The Nigeria Revenue Service Act, 2025: Reinventing Nigeria's Tax Authority for the Future

In a strategic overhaul of Nigeria’s tax infrastructure, the National Assembly has passed the Nigeria Revenue Service (Establishment) Act, 2025, repealing the former Federal Inland Revenue Service (FIRS) Act of 2007. This landmark legislation doesn't just change the name; it reinvents the institutional, operational, and legal framework for tax administration in Nigeria. Here's what you need to know.

1. A New Identity, Broader Powers

The newly established Nigeria Revenue Service (NRS) is now:

a)   A corporate entity with legal autonomy. Empowered to assess, collect, and account for all federally accrued revenues, including taxes, levies, duties, royalties, and oil-sector-specific fees. Authorized to assist in tax collection at state and local levels and under international agreements.

2. Expanded Functions for Modern Tax Enforcement

The Act assigns broad responsibilities to the Service, including:

1. Taxpayer assessments (corporate, partnerships, individuals).
2.  Recovery of taxes, investigation of fraud, and seizure of proceeds from tax evasion.
3. Collaboration with ministries, law enforcement, and international bodies
4. Issuance of taxpayer identification numbers and maintenance of a comprehensive taxpayer database
5.   Oversight of tax waivers, fraud analytics, and compliance monitoring.
6.   It also empowers the Service to issue regulations and automate administration via digital platforms.

3. Empowered Governing and Management Structures

The Act establishes:

1.  A Governing Board chaired by the Executive Chairman and populated by key government representatives and private sector experts from each geopolitical zone.
2.   A Technical Committee to advise on complex tax matters.
3.    A Management Committee for operational supervision.
4. The Executive Chairman—appointed by the President—is now the chief accounting officer and administrative head of the Service.

These structures emphasize professionalism, independence, and transparency.

4. Collaboration, Assistance, and International Engagement

The Act enables the NRS to:

1.    Assist states, LGAs, and even foreign governments in tax collection.
2.    Enter mutual agreements for revenue sharing or administrative assistance in line with double taxation treaties.
3.    Charge service fees for administrative support.
   This positions Nigeria to actively participate in global tax cooperation frameworks. This positions Nigeria to actively participate in global tax cooperation frameworks.

5. Funding and Financial Autonomy

The NRS is empowered to:

1.   Retain 4% of total revenue (excluding petroleum royalties) it collects for operational expenses.
2.  Accept grants, borrow funds, and manage its budget and assets with financial independence.
3.    Submit annual reports and financial statements to the Minister and National Assembly for accountability.

6. Confidentiality and Legal Protections

Strict confidentiality provisions cover taxpayer data and internal information. The Act:

1.    Penalizes breaches with fines or imprisonment.
2.    Protects staff against personal liability arising from official actions.
3.    Provides immunity for assets from execution without proper notice.
4.    Prescribes limits for filing suits against the NRS, enhancing institutional protection.

7. Continuity and Transition from FIRS

To ensure a smooth transition:

1.    All assets, staff, contracts, and legal actions under FIRS are transferred to the new NRS.
2.  Ongoing investigations, proceedings, or audits remain valid.
3.  Notices and regulations issued under the old Act remain effective.
   This guarantees legal continuity and avoids disruptions in tax administration.

Conclusion: A Strategic Leap in Tax Governance

The Nigeria Revenue Service Act, 2025 signals a strong commitment to professionalizing and digitizing Nigeria’s tax regime. With expanded powers, clear accountability structures, and the ability to adapt to both local and global dynamics, the Act lays a solid foundation for a modern, responsive, and efficient tax authority.

Abdulwahab Dahiru Esq. ACArb. LLM.

234 706 269 4989