NRS takes over Royalty collection to curb mining revenue leakages

The Federal Government has unveiled a sweeping new framework aimed at transforming Nigeria’s solid minerals sector into a major revenue driver.

Under the reforms, the Nigeria Revenue Service (NRS) has assumed responsibility for the collection of mineral royalties and related fees, while the Ministry of Solid Minerals Development (MSMD) retains its role as sector regulator.

The government said the era of weak compliance, illegal mining, and poor revenue capture must come to an end.

Speaking at a joint stakeholder sensitization program organized by the Nigeria Revenue Service and the Ministry of Solid Minerals Development, the Executive Chairman of the NRS, Zaccheus Adedeji, declared that Nigeria could no longer tolerate a system where vast mineral wealth failed to translate into economic prosperity and social development.

The sensitization program, themed “From Resources to Revenue: Aligning Solid Minerals Operations with the 2025 Tax Reform Act,” brought together mining operators, regulators, investors, license holders, and government agencies to clarify operational procedures under the new royalty framework.

Adedeji, who was represented by the Executive Director of Finance and Corporate Services at the NRS, Muhammad Lawal, said the implementation of the 2025 Tax Reform Act marked a historic turning point for the mining industry.

According to him, the reform was designed not merely to increase government revenue, but to establish a transparent, efficient, and sustainable royalty administration system capable of boosting investor confidence and strengthening accountability across the mining value chain.

He said, “Nigeria is richly blessed with abundant solid mineral resources spread across every region of this country, yet for far too long, the full economic value of these resources has not been optimally captured for national development.”

“As a nation, we can no longer afford a system in which enormous natural wealth fails to translate into measurable prosperity, infrastructure, jobs, and improved social outcomes for our people.”

He explained that under the new framework, which took effect from January 1, 2026, the NRS has become the sole authority responsible for royalty assessment, collection, review, and enforcement in the solid minerals sector, while the Ministry of Solid Minerals Development retains oversight of mineral titles, operational regulation, and official reference pricing.

Adedeji said, “The reforms are designed not merely to increase revenue but to establish fairness, efficiency, and sustainability across the value chain.”

“For us at NRS, this engagement is not about enforcement alone. It is about partnership, education, and shared prosperity. We recognize that effective compliance goes with clarity, trust, and continuous engagement with stakeholders.”

Adedeji further assured operators that the revenue agency would work closely with the Ministry of Solid Minerals Development and other relevant agencies to ensure a seamless transition into the new tax regime.

“Our objectives are clear: to strengthen voluntary compliance; close leakages in royalty and tax administration; improve transparency across the mining value chain; create a more investment-friendly environment; and ensure that Nigeria derives maximum value from its natural resources,” he added.

He maintained that the new system would significantly improve domestic revenue mobilization, enhance investor confidence, support responsible mining practices, and contribute to overall economic growth.

Adedeji explained that all mining operators are now required to register with the NRS and obtain Tax Identification Numbers (TINs), while monthly royalty returns must be filed on or before the 21st day of every month.

Under the framework, royalty payments will be computed based on the quantity of minerals sold or used, multiplied by the official reference price published by the ministry and the applicable royalty rate.

The NRS Chief warned that operators who default on payments could face stiff sanctions, including a 10 percent penalty, compound interest, demand notices, and possible license revocation through referrals to the ministry.

Also speaking at the event, the Minister of Solid Minerals Development, Dele Alake, lamented Nigeria’s overdependence on imports and the collapse of local production capacity, which he said contributed significantly to the weakening of the naira and the broader economy.

“I was privileged to have lived in this country when the naira was strong, and in the early ’80s I bought one dollar for 80 kobo. That was not the official rate. The official rate was 52 kobo,” Alake recalled.

He added, “It was at that rate because the production capacity of the country was higher factories were all over the country. We had factories in Kano, Ibadan, Port Harcourt, Lagos, Enugu, and Onitsha. Factories were producing goods and employment was rife.”

The Minister blamed the country’s economic decline on what he described as an importation bonanza that shifted attention away from local production.

“But when the importation bonanza came, we forgot about production and we started importing,” he said.

Alake disclosed that the administration of President Bola Tinubu identified solid minerals as one of the strategic sectors capable of reviving the Nigerian economy and diversifying government revenue away from crude oil dependence.

According to him, the Federal Government has already begun creating incentives and policies to stimulate private sector investments in mineral processing and value addition.

“Today, I can tell you another gold refinery is ready and up and running in Abuja. Two more are still being built,” the Minister revealed.

“As we speak, we are in the process of also enabling another private sector investor to bring a refinery to Jos. Without the Federal Government creating the enabling environment through incentives and policies, these factories would not have been possible,” Alake added.

Alake also highlighted the government’s crackdown on illegal mining activities, describing the establishment of Mining Marshals as a major milestone in restoring order to the sector.

“Illegal operators were operating with impunity for decades, so we had to create a special security architecture around illegal mining. That is what led to the creation of Mining Marshals,” he explained.

Also speaking, the Executive Director of the Government and Large Taxpayers Directorate (GLTD) at the Nigeria Revenue Service, Amina Ado, said that Nigeria’s mining sector has operated in the shadows for too long.
Ado warned that weak institutions and poor regulation had denied the country the full value of its vast mineral wealth for more than a century.

She said Nigeria’s challenge was not the absence of mineral resources, but the failure to build systems capable of translating those resources into lasting national development.