Nigeria’s ambitious plan to rake in N40 trillion in revenue by 2026 is now facing a serious reality check, as officials warn that tax leakages and poor compliance could derail the target.

According to cbinews.tv, the Nigeria Revenue Service (NRS) has raised a red flag over what it describes as persistent tax leakages, delayed remittances, and patchy compliance from some government bodies and sub-national entities — all of which could put the country’s massive N40 trillion revenue goal for 2026 at risk.

The concern was voiced at a National Workshop on Strengthening Tax Compliance Under the New Tax Regime in Abuja, where government officials, MDAs, states, and revenue authorities came together to look for practical ways to tighten up the system.

At the event, the Executive Director for Large Taxpayer and Government Directorate at the NRS, Ms Amina Ado, didn’t sugar-coat things. She revealed that audits and monitoring exercises have uncovered significant gaps in how taxes are being deducted and remitted.

While she acknowledged that some states and institutions are doing a solid job, she stressed that structural leakages — especially around VAT and Withholding Tax — are still a major headache.

In her words, the situation is creating a kind of imbalance in Nigeria’s fiscal system, where some regions consistently contribute properly while others fall short but still benefit from the shared national pool.

She also pointed out that the NRS wants to move away from a “compliance by force” approach towards something more collaborative, technology-driven, and transparent, where government institutions actually work together instead of at cross purposes.

On his part, the Executive Chairman of the NRS, Dr Zacch Adedeji (represented at the event), described the N40 trillion target as a “Herculean task” but insisted it is achievable if compliance improves.

He explained that the broader goal is to keep the Federation Account Allocation Committee (FAAC) well-funded, since it supports all three tiers of government and helps finance key national development projects.

He also noted that the workshop was designed to close compliance gaps, improve awareness of tax obligations among MDAs and government-owned enterprises, and reduce confusion caused by the new tax framework.

Importantly, he made it clear that Nigeria needs to shift towards a system where compliance is voluntary and consistent, not forced and reactive. He also warned that uneven compliance across states and agencies is damaging fairness and weakening the country’s tax culture.

Looking ahead, he added that the NRS is even planning to introduce a recognition scheme from 2026 to reward the most tax-compliant states — a bit of healthy competition to encourage better performance.

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