President Bola Tinubu has signed four tax reform bills into law, aiming to unify Nigeria’s fragmented tax system, eliminate wasteful duplications, and boost transparency and coordination. The new laws will establish the Nigeria Revenue Service as the sole body responsible for collecting federally chargeable taxes.
The new laws will unify the tax system, eliminating multiple taxation and reducing the burden on businesses and individuals.
The reforms exempt minimum wage earners from personal income tax and introduce a zero-rate VAT framework on essential items like food, education, and healthcare.
The government aims to close the tax gap by reducing tax evasion and eliminating wasteful incentives, which are estimated to be around 70% of the tax gap.
The new laws will take effect on January 1, 2026, allowing for a six-month transition period for planning, education, and alignment with the fiscal calendar.
More than one-third of workers in both the private and public sectors will be exempt from paying personal income tax.
Over 90% of small and micro businesses will no longer have to worry about paying corporate income tax or charging VAT.
The new system will require government agencies to be more transparent in their reporting and make information accessible to the public.
NECA has welcomed the signing of the tax reform bills, describing it as a significant step towards ending multiple taxation on businesses in Nigeria.
Olu Verheijen has stated that the new laws have codified four key executive orders aimed at stimulating investment in Nigeria’s oil, gas, and clean energy sectors, which has already helped unlock over $6 billion in fresh investments [2].
