On June 26, President Bola Tinubu signed into law a set of new tax reform bills, now collectively known as the Nigeria Tax Reform Acts. The legislation, developed by the Presidential Committee on Fiscal Policy and Tax Reforms led by Taiwo Oyedele, is expected to transform tax administration and improve revenue generation in the country.
From the beginning of his administration, Tinubu emphasized tax reform as a priority for strengthening Nigeria’s fiscal foundation and supporting long-term economic growth. The new laws consolidate multiple tax statutes into a single framework, simplifying the system, broadening the tax base, enhancing fairness, and improving compliance.
Key statutes replaced under the reform include the Companies Income Tax Act, Personal Income Tax Act, Value Added Tax Act, Capital Gains Tax Act, Petroleum Profits Tax Act, and the Stamp Duties Act.
Personal Income Tax (PIT)
Under the new provisions, individuals earning ₦800,000 or less per year are exempt from PIT. Taxable income above this threshold will be subject to progressive rates, with a maximum of 25%.
While some workers have expressed concern about potential multiple taxation—particularly civil servants already taxed at source through the PAYE system—Oyedele explained that the new tax table, which replaces one that had been in place since 2011, corrects years of “fiscal drag.” He noted that inflation had pushed many low-income earners into higher brackets, making the previous system regressive.
According to Oyedele, over 90% of employees in both public and private sectors will now pay less tax, while only high earners will see higher rates, capped at 25%.
Corporate Tax Incentives
For businesses, the reforms introduce gradual reductions in corporate income tax rates: from 30% to 27.5% in 2025, and then to 25% in 2026. The turnover threshold for small companies exempt from income tax has also been raised from ₦20 million to ₦50 million annually.
Uche Uwaleke, Professor of Capital Market and President of the Capital Market Academics of Nigeria, welcomed the reforms, noting that lower corporate taxes and incentives for small businesses could stimulate economic activity, boost company valuations, and create jobs.
He also highlighted the government’s plan to reduce the number of taxes from over 60 to fewer than 10, saying this would significantly improve Nigeria’s business environment.
Outlook
Experts believe the success of the reforms will depend on effective implementation and the government’s ability to balance revenue generation with economic growth. While some stakeholders remain skeptical, many agree that the new framework has the potential to make Nigeria’s tax system fairer, simpler, and more growth-oriented.