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Federal Government projects ₦1.9tn revenue in 2026 from the newly introduced development levy under Nigeria’s 2025 tax reforms.
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Levy consolidates multiple existing charges, including TETFund, NITDA, NASENI and Police Trust Fund levies, into a single four per cent charge on assessable profits.
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Funds to support education, technology, security and infrastructure, with collections expected to rise to over ₦7tn between 2026 and 2028.
The Federal Government is projecting to generate about ₦1.9 trillion in revenue from the newly introduced development levy in 2026, marking its first appearance in the federal budget following the sweeping 2025 tax reforms.
Figures contained in the 2026 Budget Call Circular indicate that expected collections from the levy will stand at ₦1.899 trillion in 2026, rising to ₦2.41 trillion in 2027 and ₦3.13 trillion in 2028, making it one of the fastest-growing non-oil revenue sources over the medium term.
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The development levy, imposed at four per cent of companies’ assessable profits under the Nigeria Tax Act 2025, is scheduled to take effect from January 1, 2026.
The law applies to companies chargeable to tax in Nigeria, excluding small companies and non-resident firms that meet exemption thresholds.
Under the new framework, the levy replaces several existing charges previously imposed separately, including the Tertiary Education Tax, the NITDA levy, the NASENI levy and the Police Trust Fund levy.
Authorities say the consolidation is designed to simplify compliance, reduce administrative overlap and eliminate multiple agency-driven levies on businesses.
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Budget documents show that ₦120.75 billion from the levy has been earmarked for recurrent expenditure in 2026, while ₦1.80 trillion will fund capital projects. Capital spending from the levy is projected to rise to ₦2.29 trillion in 2027 and ₦2.98 trillion in 2028.
The law stipulates that proceeds from the levy will be shared among seven beneficiaries, including TETFund, the Nigerian Education Loan Fund, NITDA, NASENI, the National Board for Technological Incubation, the National Cybersecurity Fund and the Defence and Security Infrastructure Fund.
Over the three-year period from 2026 to 2028, the Federal Government expects to mobilise about ₦7.07 trillion from the levy.
The Nigeria Revenue Service, set to replace the Federal Inland Revenue Service under the new tax regime, will oversee enforcement and administration through enhanced digital systems and coordinated audits.
Tax authorities have maintained that the reforms are aimed at strengthening fiscal stability, improving Nigeria’s investment climate and simplifying tax compliance, amid ongoing public debate over the new tax laws.
