Nigeria rolls out sweeping tax reforms

 

President Bola Tinubu has signed four new finance bills into law, marking a major overhaul of Nigeria's tax system. The reforms aim to simplify tax collection, ease the burden on low-income earners and small businesses, and increase government revenue through efficiency rather than higher taxes. The four laws include the Nigeria Tax Act, which consolidates numerous taxes into a single code and removes over 50 small levies; the Tax Administration Act, which sets unified rules for tax collection at all government levels; the Nigeria Revenue Service Act, replacing the Federal Inland Revenue Service with a more independent body; and the Joint Revenue Board Act, which enhances coordination among federal, state, and local governments. It also creates a Tax Ombudsman and Appeal Tribunal. The changes are expected to significantly benefit low-income households, small enterprises, and informal traders. Individuals earning up to one million naira annually will receive rent relief, effectively removing their income tax obligation. Basic goods and services like food, rent, and education will be exempt from VAT. Small businesses earning under 50 million naira per year will no longer pay company income tax and can file simplified returns. Larger businesses will benefit from lower corporate tax rates, dropping to 27.5 percent in 2025 and 25 percent in later years. They will also qualify for VAT credits on expenses and assets. Charitable and educational organizations will enjoy tax incentives if their income is non-commercial. Public reaction is cautiously optimistic. Many small business owners welcome the changes but express concern over enforcement. Experts warn that poor implementation could undermine the reforms. Despite some skepticism, officials hope the changes will raise Nigeria’s tax-to-GDP ratio from 10 to 18 percent by 2026, funding public services without burdening the poor.

See also: (In Nigeria) Darknaija Ranked Among Top 15 Most Visited Websites in May 2025 with 3.1 Million Visits