Central to Nigeria’s tax administration system is the Federal Inland Revenue Service (FIRS), now renamed the Nigeria Revenue Service (NRS), which remains the country’s apex tax regulator.
The agency generated N7.44 trillion in tax revenue during the first quarter of 2026, placing it at the centre of the Federal Government’s revenue mobilisation drive under President Bola Ahmed Tinubu’s administration.
However, the tax authority is also involved in multiple legal disputes relating to tax obligations, revenue collection powers, withholding claims, and jurisdictional disagreements involving individuals, companies, and state governments.
These disputes have resulted in a growing number of civil and criminal court matters where the agency appears as a defendant, respondent, or interested party.
Bayelsa State versus FIRS
One of the most prominent ongoing disputes involves the Bayelsa State Revenue Service and the FIRS.
According to reports, the Supreme Court has fixed July 27, 2026, for judgment in an appeal filed by the FIRS challenging earlier decisions of both the Court of Appeal and the Federal High Court.
The lower courts had reportedly ordered the FIRS to pay N5.5 billion to the Bayelsa State Revenue Service over funds allegedly wrongly collected and withheld.
The Attorney-General of the Federation, Lateef Fagbemi, who is leading the Federal Government’s legal team, is asking the Supreme Court to overturn the judgment.
What the dispute is about
The matter highlights the continuing tensions between federal and state tax authorities over:
- Revenue collection rights
- Tax jurisdiction boundaries
- Sharing of tax proceeds
- Administrative authority over certain tax categories
Such disputes have become more common as both federal and sub-national governments intensify efforts to boost internally generated revenue amid mounting fiscal pressures.
More insights
Nigeria’s tax ecosystem has witnessed increased litigation in recent years due to:
- Aggressive revenue mobilisation efforts
- Expanding tax enforcement activities
- Disputes over VAT administration and collection powers
- Compliance disagreements involving corporations and state authorities
- Broader fiscal reforms introduced by the Federal Government
Legal experts note that several of these cases could shape future interpretations of:
- Fiscal federalism
- Tax administration powers
- Revenue-sharing arrangements
- Constitutional authority between federal and state institutions
What you should know
The FIRS recently transitioned into the Nigeria Revenue Service following broader tax reform efforts aimed at strengthening tax administration and expanding revenue collection efficiency.
Nigeria’s tax authorities have intensified enforcement actions as the government seeks to:
- Reduce reliance on oil revenue
- Expand the tax base
- Improve non-oil revenue generation
- Strengthen fiscal sustainability
At the same time, businesses and state governments have increasingly challenged certain tax assessments and collection practices in court, contributing to a growing number of tax-related judicial proceedings across the country.
