Amongst other factors, the global dip in oil prices and the resulting economic recession in Nigeria resulted in an increased focus on revenue generation through taxation in Nigeria. Following the mandate by the Federal Government, the Federal Inland Revenue Service (FIRS) intensified its drive for tax collection and has so far reported giant strides in its collection efforts. However, the tax-to-Gross Domestic Product (GDP) ratio has continued to hover around an abysmal 6% despite the reported tax revenue increase by the FIRS. While the tax-to-GDP ratio is nothing more than the portion of a country’s output (i.e. domestic product) that is attributable to tax receipts, it is one of the most widely used tool for measuring the efficiency of a country’s tax system. Recent data from the National Bureau of Statistics indicates that Nigeria’s GDP stood at ₦31.79 trillion in the first quarter of 2019 (Q2 2019) while the total government collection in taxes was barely ₦1.5 trillion in that quarter. In this article, we have evaluated Nigeria’s tax-to-GDP ratio vis-à-vis the metrics for determining the current rate. We have also highlighted the underlying factors for the going rate and proffered recommendations on how both the tax revenue and the ratio can be improved. The Nigerian Tax to GDP ratio: When tax revenue grows at a slower rate than the GDP, the tax-to-GDP ratio drops; when tax revenue grows faster than GDP, the ratio increases. In most instances, the ratio of tax-to-GDP stays relatively consistent because tax collection is closely connected with the rate of economic activity. Thus, the general expectation is that GDP should grow parallel to tax revenue. However, low tax-to-GDP ratio is not an uncommon phenomenon with developing economies including Nigeria. Prior to the economic recession in Nigeria in 2016, the Nigerian GDP figures were rebased and the new figures were greatly celebrated as the news that the Nigerian GDP had grown to be the largest in Africa was widely published. Notwithstanding the reported growth, the tax-to-GDP ratio has remained at 6% which is even relatively lower when compared to other developing economies. In certain studies conducted on the Indian economy, also a developing economy, certain factors were identified as contributing to low tax-to-GDP ratio. These factors include unorganized informal sector, narrow tax base, tax exemption and subsidy policies as well as loopholes in tax laws. We have discussed some of these factors as they apply to Nigeria below: Narrow Tax Base: Undoubtedly, a small tax base places huge burdens on honest and compliant taxpayers. According to the International Monetary Fund (IMF), out of the Nigerian labour force of 77 million persons, only 10 million persons are registered for tax purposes. This situation has adversely affected government’s revenue generation through taxes. On a broader note, in Q2 2018, the oil sector was recorded to have contributed 8.55% to the total real GDP in Nigeria while the non-oil sector was recorded to have contributed 91.45% to GDP. In contrast, total government revenue in taxes from the oil sector (Petroleum Profits Tax) totaled about ₦524 billion (39.26% of total tax revenue) while non-oil taxes totaled about ₦810 billion (60.74%).