The cost of revenue collection by major Nigerian agencies surged by 32.8% in the first half of 2025, with the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) collectively retaining N575.14bn, up from N432.97bn in the same period of 2024.
This significant increase, reported by the National Bureau of Statistics (NBS), comes amid a stronger revenue collection drive by the agencies. The cost of collection, which includes statutory deductions retained by these agencies, rose as a result of higher revenue generation.
In the first half of 2025, the FIRS collected N231.25bn, marking a 12.4% increase from last year’s N205.65bn. The NUPRC retained N147.06bn, a 36.1% rise from the previous year’s N108.02bn, while the NCS saw the largest growth, retaining N196.83bn, a massive 64.9% increase compared to N119.30bn in 2024.
The NCS’s boost in revenue collection points to an uptick in import duty collections, partly driven by a recovery in cross-border trade, alongside the inflationary effect of the weakened naira, which increased the naira value of import tariffs.
The retention amounts are percentage-based, meaning higher revenue directly results in higher deductions for operational costs. For instance, the NCS now retains a larger share of the total cost of collection, representing 34.2% in H1 2025 compared to 27.5% in H1 2024. Similarly, FIRS’s share of the total cost of collection fell to 40.2% from 47.5% in 2024. NUPRC’s share slightly increased from 24.9% to 25.6%.
The highest monthly payout occurred in June 2025, where the total cost of collection peaked at N111.91bn, driven by FIRS’s N58.59bn. March, however, recorded a dip to N84.23bn, the lowest figure for the year.
This growing cost of revenue collection has implications for Nigeria’s fiscal health, especially with the increasing government debt obligations. Since the deductions are automatically tied to revenue growth, they result in reduced funds available for distribution across federal, state, and local governments.
In response to this, President Bola Tinubu has directed a review of revenue retention practices by key revenue-generating agencies, including FIRS, NCS, NUPRC, Nigerian Maritime Administration and Safety Agency (NIMASA), and the Nigerian National Petroleum Company (NNPC). The goal is to optimize public savings and spending efficiency.
