President Bola Tinubu has signed into law four landmark tax reform bills, marking a decisive shift in Nigeria's fiscal architecture. These reforms consolidate all federally chargeable taxes under the newly empowered Nigerian Revenue Service (NRS), effectively removing tax collection powers from agencies like the Nigeria Customs Service and the Nigerian Upstream Petroleum Regulatory Commission — a move expected to overhaul the nation’s revenue infrastructure.
At the State House signing ceremony, Tinubu described the reforms as signals of Nigeria’s readiness for modern economic growth and stronger global investment. He acknowledged the difficulty of tax reforms but praised stakeholders for their leadership, stating that the reforms will eliminate outdated systems and obsolete tax-to‑GDP formulas.
These bills trace back to a presidential directive in July 2023 establishing the Presidential Committee on Fiscal Policy and Tax Reforms, headed by Taiwo Oyedele of PwC. The committee, launched in August 2023, recommended consolidating over 200 taxes into ten and conducted wide stakeholder consultations before presenting the harmonised bills to the National Assembly in late 2024.
Initially resisted—especially by state governors in the North over concerns about revenue-sharing shifts—the reforms retained the VAT rate at 7.5 percent and introduced exemptions for low-income earners. By May 2025, both the Senate and House passed harmonised versions of the the Nigeria Tax Bill (Fair Taxation), the Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board Bill.
These laws now unify the fragmented tax landscape, eliminate duplication, streamline red tape, boost investor confidence, and promote transparency, Tinubu affirmed. Zacch Adedeji, Executive Chairman of the NRS, announced that the reforms will take effect on January 1, 2026, allowing six months for stakeholder preparation.
Oyedele described the reforms as "pro‑poor," noting that over a third of Nigerian workers will now be exempt from personal income tax. Most small businesses, including micro and nano enterprises, will also be exempt from PIT, VAT, and withholding tax. Additionally, VAT exemptions apply to essentials such as food, education, healthcare, transport, accommodation, and housing.
The reforms feature an automated NRS system integrated with National ID, phone, and banking data to close tax evasion loopholes. The system also emphasizes public transparency through standardized and timely reporting.
Senator Sani Musa, Chairman of the Senate Finance Committee, said the laws reflect Nigerians' aspirations and a balanced legislative process. House Finance Committee Chairman, James Faleke, hailed the reforms as a national achievement that strengthens efficiency without creating new levies.
Reacting at NECA’s Employers Summit in Abuja, Director‑General Adewale‑Smatt Oyerinde praised the reforms for ending over a decade of multiple taxation, though he stressed that successful implementation remains crucial. NECA President Ifeanyi Okoye echoed this and urged the government to ensure policy coherence and enforcement.
Special Adviser on Energy Olu Verheijen added that codifying previous executive orders in the tax bills has unlocked over $6 billion in new energy-sector investments, providing long-term policy clarity.
Fiscal projections suggest a substantial increase in government revenue from reduced tax evasion and removal of inefficient incentives—without raising tax burdens on citizens. The reforms are also expected to generate growth-driven revenues from private-sector expansion.
Economists warn that implementation must be carefully managed to avoid inflationary risks and institutional gaps. But proponents see this overhaul as a major milestone in Nigeria’s transition to a streamlined, transparent, and investment-friendly tax framework aligned with international best practices.
ADEOLA KUNLE
