Nigeria’s foreign‑currency tax collections rose sharply to N6.33 trillion ($8.2 billion) in 2025, reflecting heightened naira volatility and a larger share of contributions from multinational enterprises, the Federal Inland Revenue Service (FIRS) announced on Monday.
The increase represents a 53 percent jump from the N4.13 trillion recorded in 2024, and it pushes total tax revenue for the year to N15.79 trillion, accounting for 21 percent of the nation’s gross domestic product (GDP). The surge was driven primarily by the foreign‑exchange (FX) levy imposed on companies that earn income in foreign currencies but remit the proceeds in naira.
According to FIRS data, the FX levy generated N5.58 trillion, up from N3.71 trillion a year earlier. The tax, which applies a 10 percent charge on foreign‑currency earnings, has become a significant source of revenue as the central bank’s interventions have failed to stabilise the naira against the dollar and other hard currencies.
Multinational corporations operating in Nigeria contributed N1.1 trillion to the FX levy, a 28 percent rise from 2024. The sector’s expanded involvement reflects both the growing presence of foreign firms in the country’s oil and gas, telecommunications, and manufacturing industries, and the broader regulatory push to capture earnings generated abroad.
In addition to the FX levy, the government collected N923 billion from other foreign‑currency related taxes, including the Value Added Tax (VAT) on imported goods and excise duties on petroleum products priced in dollars. These figures underscore the reliance of the fiscal framework on cross‑border transactions amid persistent exchange‑rate pressures.
The FIRS attributed the heightened tax intake to a combination of factors: the 2023 amendment to the Companies Income Tax Act that broadened the base of taxable foreign‑currency income, stricter compliance monitoring, and the introduction of an electronic filing system that reduced reporting lags. The agency also highlighted ongoing collaborations with the Central Bank of Nigeria (CBN) to align tax collection with monetary‑policy objectives.
Economists note that while the foreign‑currency levy bolsters short‑term revenue, it may affect foreign investment decisions if firms perceive the tax burden as excessive. The CBN has indicated that stabilising the naira remains a priority, and it is reviewing monetary tools that could mitigate exchange‑rate fluctuations without compromising fiscal targets.
The government has pledged to use the additional revenue to fund infrastructure projects, social welfare programs, and debt servicing. The Ministry of Finance is expected to present a detailed allocation plan in the upcoming budget review, which will assess the sustainability of the FX levy amidst ongoing economic challenges.
Overall, the leap in foreign‑currency tax collections signals both the effectiveness of recent fiscal reforms and the continued volatility of Nigeria’s exchange‑rate environment, factors that will shape the country’s revenue outlook and investment climate in the coming years.
