Tax

The Lagos State Internal Revenue Service (LIRS) has announced plans to begin enforcing its statutory power of substitution to recover outstanding tax liabilities directly from banks and other third parties connected to defaulting taxpayers.

The disclosure was made in a public notice issued by the agency, citing Section 60 of the Nigeria Tax Administration Act (NTAA) 2025, which empowers tax authorities to recover unpaid taxes through third-party deductions where liabilities have become final and remain unpaid.

The move comes amid the ongoing implementation of the NTAA by the federal government, despite public controversies surrounding alleged alterations to portions of the law in the gazetted version.

What LIRS is saying

According to LIRS, the power of substitution allows tax authorities to legally redirect funds belonging to a taxpayer—held by third parties—towards settling unpaid tax obligations.

Under Section 60 of the NTAA 2025, where a taxpayer fails to pay an assessed and final tax liability when due, LIRS may issue a substitution notice to any third party holding funds on behalf of that taxpayer or owing money to them.

“The Power of Substitution is a lawful collection mechanism designed to ensure efficient recovery of unpaid taxes, including Personal Income Tax (PIT), Capital Gains Tax (CGT), Stamp Duties, and Withholding Tax (WHT) administered by LIRS,” the agency stated.

LIRS emphasized that the provision applies strictly to established tax liabilities that are final, due, and unpaid, and is not intended for disputed or unresolved assessments.

How the substitution process works

The tax authority explained that substitution notices may be issued where a taxpayer neglects or refuses to settle a confirmed tax obligation. Once invoked, LIRS may serve notices on a broad range of third parties linked to the taxpayer, including:

• Banks and other financial institutions holding the taxpayer’s funds

• Employers, tenants, customers, agents, or business partners

• Debtors or entities owing money to the taxpayer, whether immediately payable or expected to accrue

Upon receipt of a substitution notice, the affected third party is legally required to remit the specified amount to LIRS from funds belonging to or payable to the taxpayer. Any amount paid under this directive is deemed to have settled the taxpayer’s liability to the extent of the remittance.

Obligations on banks and financial institutions

LIRS placed particular emphasis on the responsibilities of banks and financial institutions, warning that compliance with substitution notices is mandatory under the law.

According to the notice:

• Banks must remit the stated amount to LIRS without delay once a substitution notice is received

• Compliance must be confirmed through the LIRS e-Tax platform

• Financial institutions may be required to disclose account balances and any existing encumbrances on the taxpayer’s accounts

• Failure to comply with a substitution directive constitutes an offence under the NTAA 2025

The Service stressed that substitution notices are legally binding and must be treated as enforceable directives, not discretionary requests.

Why this matters

The enforcement action signals a tougher stance by Lagos State on tax compliance, particularly as Nigeria rolls out a restructured tax administration framework aimed at improving revenue collection and reducing leakages.

The power of substitution significantly strengthens the ability of tax authorities to recover unpaid taxes without prolonged litigation, especially where funds are readily traceable through banks or commercial relationships.

What you should know

The move comes as the federal government begins implementing four major tax reform laws, which took effect in January 2026. These include:

• The Nigerian Revenue Service Establishment Act

• The Joint Revenue Service Establishment Act (effective June 26, 2025)

• The Nigerian Tax Act (NTA)

• The Nigerian Tax Administration Act (NTAA)

The NTAA provides a unified legal framework for tax administration across federal and state authorities, introducing standardized enforcement mechanisms—such as the power of substitution—now being activated by LIRS.

For individuals and businesses operating in Lagos, the announcement underscores the importance of settling tax obligations promptly, as unpaid liabilities may now be recovered directly from bank accounts, employers, customers, or other third parties without further warning.

KPMG has clarified that its recent newsletter analysing Nigeria’s newly enacted tax laws was designed to promote understanding and smooth implementation of the reforms, rather than to criticise government policy or undermine confidence in the country’s fiscal direction. The professional services firm said the clarification became necessary following what it described as varied public reactions and interpretations that did not accurately reflect the intent or substance of the publication.

In a statement issued on Saturday, KPMG explained that the newsletter was part of its long-standing practice of providing technical guidance on new legislation, particularly complex reforms with far-reaching implications for businesses, taxpayers, and tax administrators. According to the firm, the document was never intended to question the credibility of Nigeria’s tax reform agenda, but rather to support stakeholders as they navigate the practical realities of implementation.

The clarification follows reports and public commentary suggesting that KPMG’s analysis amounted to criticism of the government’s newly enacted tax laws. Earlier, Nairametrics reported that the Presidential Fiscal Policy and Tax Reforms Committee had taken issue with some of KPMG’s observations on the reforms. The committee is chaired by Taiwo Oyedele, who has been a prominent voice in shaping Nigeria’s current fiscal reform framework.

Responding to the controversy, KPMG stressed that its objective was to encourage clarity, consistency, and efficiency in tax administration. “For the avoidance of doubt, the purpose of the newsletter is to facilitate clarity in the interpretation of the tax laws, enhance effective and efficient tax administration, reduce or eliminate unintended consequences or disputes, and promote confidence in the tax system by encouraging timely clarification and refinement of the tax laws,” the firm stated.

KPMG noted that Nigeria’s recent tax reforms, now fully codified into law, represent a significant and potentially transformational step in the country’s fiscal and economic management. If effectively implemented, the firm believes the reforms could improve revenue mobilisation, strengthen institutional capacity within tax authorities, and support a more sustainable fiscal trajectory for Africa’s largest economy.

However, the firm also emphasised that complex and wide-ranging legislation, particularly tax laws, typically requires continuous review after enactment. According to KPMG, post-enactment evaluation is a standard global practice aimed at identifying ambiguities, closing loopholes, and ensuring that laws achieve their intended policy objectives without creating avoidable administrative or compliance challenges.

It explained that its newsletter highlighted certain areas where further clarification or refinement might be helpful during implementation. These observations, the firm said, were not criticisms but constructive inputs meant to reduce the risk of disputes between taxpayers and tax authorities, especially in the early stages of enforcement.

KPMG further pointed out that calls for legislative refinement after passage are common in many jurisdictions and should not be viewed as opposition to reform. Instead, such engagement often strengthens reforms by ensuring that they are practical, enforceable, and aligned with economic realities.

In its earlier commentary, KPMG had flagged several provisions of the new tax laws that may require closer attention, including the taxation of share disposals, the commencement dates for certain measures, rules around indirect transfer of shares, and the VAT treatment of insurance premiums, among others. These issues, according to the firm, could give rise to uncertainty if not clearly addressed.

Nigeria’s tax reforms form part of a broader government strategy to improve revenue generation, reduce fiscal deficits, and enhance economic stability. As part of this process, professional services firms routinely publish technical notes and analyses to guide businesses and policymakers. Alongside KPMG, firms such as PwC and Deloitte are known to issue similar commentaries following major regulatory or legislative changes.

KPMG concluded by reiterating its support for Nigeria’s reform agenda and its willingness to continue engaging constructively with policymakers, tax authorities, and the private sector. According to the firm, open dialogue and technical feedback are essential to ensuring that the new tax laws deliver their intended benefits for government revenue, businesses, and the wider economy.

The Nigerian Tax Act 2025 has formally removed gaming “stakes” from the scope of Value Added Tax (VAT), providing long-awaited clarity for operators in the country’s fast-growing gaming and lottery industry. The exemption, contained in Section 185, Subsection (m) of the Act, resolves years of uncertainty over whether the amount wagered by players on games of chance should attract VAT.

Under the new law, “money, stakes or securities, including interest in money or securities,” are expressly listed as VAT-exempt items. The Act further defines a “stake” as the amount wagered on a game, leaving little room for ambiguity. For gaming and lottery operators, this clarification means that the sums placed by players as bets are no longer subject to VAT, and systems and billing processes must be adjusted accordingly to reflect the exemption.

The change is being widely interpreted as a deliberate attempt to align Nigeria’s VAT framework with global best practices. According to tax experts, VAT is generally designed to apply to the supply of goods and services, not to the mere transfer of money. In a gaming context, a stake represents the temporary transfer of funds for wagering purposes, rather than consideration for a taxable supply.

Industry analysts note that this position has now been reinforced by professional services firms. PwC, in its analysis of the Act, stated that the explicit exemption confirms that wagering stakes fall outside the VAT net. The firm explained that this treatment is consistent with general VAT principles, which typically exclude cash transfers that do not constitute payment for a good or service.

Despite the VAT exemption on stakes, the Act makes it clear that gaming and lottery businesses are not exempt from tax obligations altogether. Section 62 of the same legislation confirms that income derived from gaming and lottery activities remains taxable under corporate income tax rules. In determining taxable profits, operators are permitted to deduct certain costs, including winnings paid out to players, agency commissions, and statutory regulatory levies. This approach underscores the government’s intention to tax profits and value creation, rather than the initial flow of wagered funds.

The Act also introduces broader definitional clarity around gaming and lottery activities. “Gaming” is defined to include all forms of gambling and wagering, encompassing both traditional and digital formats such as video poker, online betting platforms, and slot machines. “Lottery” is described as schemes involving elements of chance or skill, including those linked to real or virtual sporting events. These expansive definitions ensure that the VAT exemption for stakes applies uniformly across physical and digital gaming channels.

Policy direction on the reforms has been closely associated with the work of the Presidential Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele. The committee has consistently argued for clearer, simpler tax rules that reduce disputes and improve compliance. Observers say the explicit exemption of stakes reflects this broader reform philosophy.

For operators, the practical implication is the need to clearly separate VAT-exempt stakes from taxable revenue streams such as service charges, platform fees, advertising income, or other ancillary services. PwC has advised gaming companies to maintain clear accounting distinctions to avoid inadvertent VAT charges and potential regulatory penalties.

The exemption is particularly significant given Nigeria’s recent history of regulatory tension in the gaming sector. In previous years, differing interpretations by operators and tax authorities led to inconsistent VAT treatment of stakes, sometimes resulting in disputes and compliance challenges. The Federal Inland Revenue Service has also stepped up oversight of digital platforms, issuing compliance guidelines aimed at improving tax collection as online gaming expands.

Overall, the VAT exemption on gaming stakes is expected to ease operational friction for licensed operators and improve certainty for investors in the sector. As digital gaming continues to grow rapidly in Nigeria, stakeholders believe the clearer tax framework will support smoother compliance, reduce litigation risks, and allow regulators to focus on taxing actual profits rather than transactional cash flows.

Economic analyst Kalu Aja has moved to clear widespread misconceptions surrounding Nigeria’s new tax laws, stating unequivocally that money entering a bank account is not automatically subject to tax. According to him, what the law targets is income, not every inflow recorded in an individual’s or business’s bank account.

Aja made this clarification while speaking during an X Space hosted by Nairametrics on Thursday. The session, themed “How the new tax law affects your pay, business and daily spending,” focused on addressing public anxiety following the implementation of Nigeria’s revised tax framework, which officially took effect on January 1, 2026.

His comments come amid growing fears among individuals, freelancers, and small business owners that bank deposits—regardless of source—could now be taxed directly by authorities. Aja described this belief as inaccurate and stressed that misunderstanding the reforms could cause unnecessary panic.

Only income, not inflows, attracts tax

Explaining the core principle behind the reforms, Aja said the tax system has not changed its fundamental definition of what is taxable. What has changed, he noted, is the enforcement structure and the responsibility placed on taxpayers.

“People are worried that once money enters your account, tax will be deducted. That is not how the law works,” he said. “If money comes into your account as income, then it is taxable. If it is not income, it is not taxable.”

He explained that income broadly covers salaries and wages, business profits, professional fees, interest, digital earnings, and other gains arising from economic activity. This definition applies to employees, entrepreneurs, freelancers, and small and medium-sized enterprises (SMEs).

In his words, “Literally, any income you make as a taxpayer—whether from work, business, or investments—is taxable. But the key word here is income.”

What does not count as taxable income

Aja was emphatic that several common inflows are explicitly excluded from taxable income under the law. These include:

• Gifts

• Inheritance

• Loans

• Life insurance payouts

Using a practical example, he explained that borrowed funds cannot be taxed because they are liabilities, not earnings. “If I take a loan from a bank and the money enters my account, that is not income. I owe it back, so it is not taxable,” he said.

Similarly, gifts—no matter how large—do not attract income tax. “If someone sends me money as a gift, it is not income to me, and I will not include it as taxable income,” Aja added.

Why tax filing now matters more than ever

According to Aja, the real risk under the new tax regime is not receiving money, but failing to file tax returns properly. He explained that the revised framework removes automatic reliefs that previously applied to taxpayers, shifting responsibility squarely onto individuals and businesses.

Under the old system, taxpayers benefited from a fixed 20% relief plus ₦200,000 automatically, even if they did not actively file returns. That structure, Aja said, no longer exists.

“They’ve changed the structure,” he explained. “Now, the onus is on you to file and claim exemptions. If you don’t, you expose that income to taxation.”

Filing tax returns, he noted, is what creates a legal record explaining the source and nature of funds entering a taxpayer’s account.

How tax authorities view bank data

Addressing concerns about surveillance, Aja clarified that while tax authorities may have visibility into bank inflows, they cannot tax those inflows automatically.

“They don’t tax inflow. They tax income,” he said. “When you file, you give context to the money that came into your account. That’s when the tax authority can either accept your filing or challenge it.”

However, he warned that failing to file leaves room for assumptions. “If you don’t file, the tax man may see money coming in and assume it is income, then ask you to pay tax on it,” he cautioned.

No automatic deductions without due process

Aja also dismissed fears that tax authorities could arbitrarily debit bank accounts under the new law. According to him, enforcement actions still require due process.

“They cannot enter your account and take money just because they think you owe tax,” he said. “Even after filing, they would still need legal backing, including a court order, before any enforcement.”

Key takeaway for taxpayers

Summing up, Aja stressed that the new tax laws do not introduce fresh personal taxes but instead tighten compliance by removing automatic reliefs and relying more heavily on accurate self-reporting.

“Anything that comes into your account, apart from gifts, inheritance, insurance payouts, and loans, is income. Filing your taxes is what protects you,” he concluded.

What you should know

Earlier in the week, tax expert Kenneth Erikume, a Partner at PwC Nigeria, urged businesses and finance teams to urgently automate compliance processes to avoid penalties under the new tax regime. Speaking at FirstBank of Nigeria’s Nigeria Economic Outlook 2026, he warned that the revised tax laws impose stricter sanctions for errors, making manual processes increasingly risky.

The House of Representatives has released the certified true copies of four major tax reform Acts recently signed into law by President Bola Ahmed Tinubu, following rising public controversy over alleged alterations and the circulation of unauthorised versions of the laws.

The decision was announced in a statement issued on Saturday by the House’s spokesperson, Akintunde Rotimi, who said the move was intended to address growing concerns about the authenticity of different versions of the tax laws circulating in the public domain. According to the House, making the certified copies publicly available is a critical step toward restoring confidence in the legislative process and reaffirming the integrity of Nigeria’s lawmaking institutions.

The controversy emerged amid claims that some of the tax reform laws, as gazetted and circulated, differed materially from the versions debated, harmonised, and passed by the National Assembly. These concerns triggered public debate, scrutiny from policy analysts, and calls in some quarters for the suspension of the implementation of the new tax regime.

Why the House intervened

The House disclosed that the immediate release of the certified Acts was ordered after allegations of discrepancies were formally raised on the floor of the chamber under a point of privilege. A member of the House reportedly flagged inconsistencies between various versions of the tax laws, prompting leadership to act swiftly to protect the credibility of the legislature.

Following this development, the Speaker of the House, Abbas Tajudeen, directed an internal verification exercise and authorised the public disclosure of the certified documents. According to the Speaker, the intervention underscores the National Assembly’s commitment to transparency, due process, and the sanctity of official legislative records.

He stressed that the National Assembly is fundamentally an institution of records, governed by established constitutional and parliamentary procedures that ensure traceability and accountability at every stage of lawmaking.

The tax reform Acts released

The four laws released form the core of Nigeria’s current tax reform architecture and are central to the Federal Government’s broader fiscal and revenue mobilisation strategy. They include:

• The Nigeria Tax Act, 2025

• The Nigeria Tax Administration Act, 2025

• The National Revenue Service (Establishment) Act, 2025

• The Joint Revenue Board (Establishment) Act, 2025

According to the House, these Acts are designed to modernise Nigeria’s tax system, improve compliance, eliminate duplication across revenue agencies, and strengthen coordination between federal and subnational tax authorities. The reforms are also expected to enhance efficiency in revenue administration and support fiscal sustainability at a time of mounting public finance pressures.

Assurance on legislative integrity

Speaker Abbas reassured Nigerians that the legislative process is guided by strict documentation and verification standards, noting that every bill and amendment follows a clearly defined constitutional pathway from introduction to assent.

“The National Assembly is an institution built on records, procedure, and institutional memory. Every Bill, every amendment, and every Act follows a traceable constitutional and parliamentary pathway,” the Speaker said.

He emphasised that the only valid and enforceable versions of the tax laws are those officially certified and released by the National Assembly, urging the public to disregard any unauthorised documents in circulation.

The House further disclosed that the Clerk to the National Assembly has worked closely with the Federal Government Printing Press to align the certified Acts, ensuring uniformity, accuracy, and conformity across all official copies. Hard copies of the laws have since been produced, circulated to lawmakers, and made available to the public for reference and verification.

In addition, an ad-hoc committee chaired by Rep. Muktar Aliyu Betara has been mandated to investigate how unauthorised versions of the laws entered the public space and to recommend safeguards to prevent similar incidents in the future.

Background to the controversy

The issue gained prominence last month after Hon. Abdulsammad Dasuki (PDP, Sokoto) raised concerns that the gazetted versions of the tax reform laws differed from what was passed by both chambers of the National Assembly. He claimed that his review revealed material discrepancies, fuelling calls from some stakeholders for the suspension of the laws’ implementation.

Despite the controversy, President Tinubu, speaking in late December, maintained that the new tax laws would take effect as scheduled from January 2026, dismissing calls for a delay. The release of the certified copies by the House now appears aimed at drawing a clear line under the dispute, reaffirming legislative transparency, and ensuring Nigerians have access to the authentic texts of the landmark tax reforms.

Nigeria’s proposed tax reform agenda is facing a credibility challenge—not because its technical foundations are weak, but because its rollout has failed to sufficiently account for a critical, often overlooked factor: tax morale. Across the country, citizens are struggling to connect with the intent and promise of the new tax regime. The resistance, confusion, and controversy that followed the bill’s passage point to a deeper problem—one rooted less in policy design and more in trust.

At the heart of the debate is a disconnect between the state and taxpayers. While government officials and policy experts have largely framed the reform as a technical necessity to broaden the revenue base and strengthen fiscal sustainability, many Nigerians see it through a social lens shaped by lived realities of hardship. Hunger, poverty, unemployment, and limited access to quality education continue to dominate daily life for millions. In such an environment, tax compliance cannot be assumed; it must be earned.

The work of the Presidential Fiscal Policy and Tax Reform Committee, chaired by Taiwo Oyedele, deserves recognition for its depth, rigour, and professionalism. On paper, the committee addressed long-standing inefficiencies in Nigeria’s tax framework, including overlaps, distortions, and the burden of compliance. However, the reform process adopted a largely technocratic approach, focusing on structures, rates, and administrative efficiency, while underestimating the importance of public buy-in and perception.

Tax systems do not operate in a vacuum. They are sustained by a social contract in which citizens agree to contribute resources in exchange for public goods, services, and accountable governance. When that contract is weak or broken, tax morale suffers. This is the core issue confronting Nigeria’s tax reform today. Citizens are being asked to comply more rigorously with tax obligations at a time when trust in institutions remains fragile.

The controversy surrounding the bill’s passage through the National Assembly, followed by reported discrepancies between the version passed by lawmakers and the gazetted version, has only deepened scepticism. Instead of serving as a unifying moment to reset Nigeria’s taxation framework, the reform has entered the implementation phase amid confusion and competing narratives. This has eroded confidence and raised legitimate questions about transparency and process.

This moment calls for a reset. Implementation should not proceed as if public confidence is intact when evidence suggests otherwise. The government must recognise that policy legitimacy is as important as policy accuracy. The newly constituted National Tax Policy Implementation Committee, chaired by Kayode Tegbe, has a critical role to play. Its task should go beyond execution to include engagement—deep, sustained, and genuine dialogue with citizens, civil society organisations, and the private sector.

Education must be central to this effort. Nigerians need clear, accessible explanations of what the new tax regime entails, how it differs from the old system, and—most importantly—what benefits it promises in tangible terms. Tax reform should not be communicated solely in the language of revenue optimisation, but in terms of improved public services, infrastructure delivery, and shared national progress.

Equally important is the need for government to demonstrate seriousness in addressing the structural issues that undermine tax morale. When citizens see credible action on poverty reduction, food security, education, and basic welfare, willingness to comply with tax obligations naturally improves. Trust grows when people believe their contributions are being used responsibly and equitably.

Leadership from the executive arm, under Bola Ahmed Tinubu, is essential in setting this tone. Tax reform should be framed not as a fiscal extraction exercise, but as part of a broader national renewal agenda anchored on accountability, transparency, and shared sacrifice.

Several practical steps are urgent. First, discrepancies between the bill passed by the National Assembly and the gazetted version must be resolved transparently and swiftly. Second, stakeholder engagement should be institutionalised, not treated as an afterthought. Third, a nationwide tax education campaign must be launched to build understanding and reduce misinformation. Finally, government must visibly confront the socio-economic challenges that shape citizens’ attitudes toward taxation.

The Federal Government has unveiled plans to introduce tax exemption cards for small businesses and informal operators across Nigeria, as part of its sweeping tax reform agenda aimed at protecting low-income earners and reducing the burden of multiple taxes and levies. The initiative is designed to provide practical relief to micro-enterprises while curbing harassment by tax officials at federal, state, and local government levels.

The disclosure was made by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during an interview on Channels Television. Oyedele explained that the proposed exemption cards would serve as a clear, verifiable signal that certain categories of businesses are legally exempt from paying specific taxes under the new framework.

According to him, the reforms are deliberately structured to move Nigeria away from what he described as a regressive tax system—one that places a disproportionate burden on the poorest segments of society—towards a more equitable and growth-supportive model.

Shifting focus to high-yield taxpayers

Oyedele argued that Nigeria’s limited tax enforcement capacity makes it inefficient and unfair to aggressively pursue low-income earners and micro-businesses. Instead, he said the government’s focus should be on high-yield taxpayers who earn substantial incomes but often remain outside the tax net.

To underscore this point, he cited data from the Nigeria Deposit Insurance Corporation (NDIC), which shows that about 98% of bank account holders in Nigeria have balances below N500,000. According to Oyedele, this statistic highlights how misplaced fears around the tax reforms are, especially claims that ordinary Nigerians’ bank accounts would be arbitrarily targeted.

“Those are the people fighting the reform,” he said, adding that resistance is often driven by misinformation and, in some cases, deliberate manipulation by wealthy individuals seeking to avoid paying their fair share of taxes. He noted that some content creators and professionals earning significant monthly incomes have framed the reforms as an attack on the poor, despite standing to lose the most under stricter enforcement.

Oyedele dismissed claims that the reforms empower the government to debit bank accounts directly, stressing that the system relies on self-declaration. “At the end of the year, you tell the government your income. If you’re exempted, you simply declare your income and state that you are exempt,” he explained.

Tax exemption cards for micro and informal businesses

A major highlight of the reforms is the explicit protection of small businesses and informal operators. Oyedele explained that under the new presumptive tax regime, businesses with an annual turnover of N12 million or less will be deemed to lack the capacity to pay tax.

He clarified that turnover is not the same as profit, noting that many small businesses must first cover basic operating costs before earning any meaningful income. To prevent abuse and arbitrary enforcement, the reforms go further by clearly listing categories of micro-businesses that are effectively non-taxable.

These include roadside food vendors, vulcanisers, petty traders, and similar informal operators whose activities generate minimal income even at full capacity. For such businesses, the proposed exemption cards—or stickers—will act as official proof of exemption.

“What we are planning to do is for them to get tax exemption stickers, so nobody will bother them,” Oyedele said, emphasizing that the goal is to restore dignity to small business owners and allow them to operate without constant fear of extortion.

Harmonising taxes across states and councils

Oyedele also linked the exemption card initiative to broader efforts to harmonise taxes and levies at the sub-national level. While acknowledging that the Constitution limits the Federal Government’s ability to dictate tax policy to states, he said a harmonised tax framework has been developed in collaboration with the Joint Revenue Board to guide states and local governments.

Several states, including Ekiti State, Zamfara State, Anambra State, and Kano State, have already taken steps to adopt harmonised taxes and levies laws, with Lagos State also indicating plans to follow suit. The objective, he said, is to eliminate arbitrary charges and end the harassment of small business owners.

What you should know

The exemption card proposal aligns with the broader national tax reform agenda of Bola Ahmed Tinubu, which seeks to simplify Nigeria’s tax system, widen the tax base, and promote economic inclusion. At the sub-national level, states such as Anambra and Zamfara have already enacted harmonised revenue laws, while Ekiti recently became the first state to domesticate the Nigeria Tax Administration Act through its Ekiti State Revenue Administration Law, 2025.

If successfully implemented, the tax exemption card scheme could mark a turning point for millions of small businesses, offering clarity, protection, and relief—while allowing the government to concentrate enforcement efforts where they matter most.

President Bola Ahmed Tinubu has firmly reiterated the Federal Government’s resolve to implement Nigeria’s newly enacted tax laws according to the original timeline, dismissing mounting calls from critics and interest groups for a suspension or delay. The President made his position clear in a message shared on X (formerly Twitter) on Tuesday, signalling that his administration views consistency and policy certainty as essential pillars of economic reform.

According to Tinubu, the tax reforms—some of which took effect on June 26, 2025, while others are scheduled to commence on January 1, 2026—are central to rebuilding Nigeria’s fiscal architecture and will not be halted by public pressure or political controversy. He stressed that the reforms are not designed to impose additional burdens on Nigerians, but rather to correct long-standing structural weaknesses in the country’s tax system.

The President described the reforms as a long-term intervention aimed at fairness, competitiveness, and sustainability, arguing that Nigeria must modernise its tax framework to meet current economic realities. He characterised the exercise as a “once-in-a-generation opportunity” to reset the tax system and strengthen the fiscal foundation of Africa’s largest economy.

What the President is saying

In his statement, Tinubu emphasised that the administration has carefully sequenced the reforms, with two of the laws already in effect and the remaining ones slated for implementation from January 1, 2026. He made it clear that this schedule would be maintained.

“The new tax laws, including those that took effect on June 26, 2025, and the remaining acts scheduled to commence on January 1, 2026, will continue as planned,” the President said.

He further explained that the objective of the reforms is not to raise tax rates arbitrarily, but to harmonise Nigeria’s fragmented tax system, eliminate inefficiencies, and strengthen the social contract between the government and citizens. According to him, a fairer and more transparent tax regime would ultimately protect human dignity while ensuring that government has the resources needed to deliver public goods.

Tinubu acknowledged the ongoing public discourse and criticism surrounding alleged changes to certain provisions of the tax laws. However, he maintained that no substantial issue has been identified that justifies halting or reversing the reform process.

“Our administration is aware of the public discourse surrounding alleged changes to some provisions of the recently enacted tax laws. No substantial issue has been established that warrants a disruption of the reform process,” he said, adding that trust in governance is built through consistent, well-considered decisions rather than reactive policy reversals.

What this means for Nigeria

The President’s firm stance sends a strong signal to investors, businesses, and international partners that Nigeria is committed to policy continuity, even in the face of domestic criticism. Analysts note that such consistency is often viewed as critical for boosting investor confidence, particularly at a time when Nigeria is seeking to attract capital and stimulate economic growth.

By insisting on proceeding with the reforms, the Tinubu administration is positioning the tax overhaul as a cornerstone of its broader economic agenda—one focused on shared responsibility, fiscal discipline, and long-term prosperity. While debates around specific provisions of the laws are likely to continue, the government appears determined to address concerns through engagement and implementation reviews rather than outright suspension.

What you should know

The controversy centres on four major pieces of legislation: the Nigeria Tax Act, 2025; the Nigeria Tax Administration Act, 2025; the Joint Revenue Board of Nigeria (Establishment) Act, 2025; and the Nigeria Revenue Service (Establishment) Act, 2025. These laws were signed by President Tinubu on June 26, 2025, and collectively represent the most comprehensive overhaul of Nigeria’s tax system in decades.

With full implementation scheduled from January 1, 2026, the reforms are expected to reshape tax administration, improve coordination among revenue authorities, and lay the groundwork for a more efficient and inclusive fiscal system—one the government believes is essential for Nigeria’s long-term economic stability and growth.

From January 1, 2026, Nigerians will no longer need to worry about lengthy or repetitive procedures to obtain or confirm their Tax Identification Number (Tax ID). In a major step toward simplifying tax administration, the Joint Revenue Board (JRB), formerly known as the Joint Tax Board, alongside the Nigerian Revenue Services (NRS), previously the Federal Inland Revenue Service, has announced the official launch of the Nigerian Tax ID Portal.

The new digital platform is designed to allow both individuals and businesses to retrieve their Tax ID seamlessly using already existing identification credentials. For individuals, the National Identification Number (NIN) will now serve as the Tax ID, while registered businesses can use their Corporate Affairs Commission (CAC) registration number. This reform takes effect nationwide from January 1, 2026, aligning with broader fiscal reforms under President Bola Ahmed Tinubu’s administration.

According to the revenue authorities, the portal eliminates the need for Nigerians to undergo an entirely new registration process to obtain a Tax ID. This addresses earlier public concerns that the introduction of new tax laws would create additional bureaucratic hurdles, particularly for citizens seeking to open bank accounts or comply with tax requirements.

The Tax Identification Number is a unique, system-generated 13-digit number assigned to every taxable individual or entity in Nigeria. It is used for tax filing, payments, and monitoring compliance across federal and state revenue systems. Under the new framework, the National Identity Management Commission (NIMC)-issued NIN has been fully integrated into the tax system for individuals, while CAC numbers perform the same role for corporate entities.

How individuals can retrieve their Tax ID

For individual Nigerians, the process has been simplified into a few clear steps:

First, visit either www.taxidjtb.gov.ng or www.taxidnrs.gov.ng using an internet-enabled device. On the homepage, select the “Individual” option. You will then be prompted to choose National Identification Number (NIN) as your identification method.

Next, enter your 11-digit NIN and click on “Retrieve Tax ID.” To confirm your identity, you will be required to input your first name, last name, and date of birth exactly as they appear in NIMC’s database. Once verified, click “Continue,” and your 13-digit Tax ID will be displayed on the screen instantly.

How businesses can retrieve their Tax ID

For registered companies and other non-individual entities, the steps are equally straightforward. Visit the same portal addresses and click on the “Corporate” tab. Select the appropriate organisation type—such as limited liability company, business name, or incorporated trustee—and enter the relevant CAC registration number. After clicking “Retrieve Tax ID,” the system will generate and display the entity’s 13-digit Tax ID.

Why this matters

The launch of the Tax ID portal is part of a wider effort to modernise Nigeria’s tax system, reduce duplication, and improve compliance through clarity rather than coercion. By leveraging existing national databases, the government aims to reduce administrative costs, curb fraud, and ensure that taxpayers are correctly identified across federal and state platforms.

This development is also closely tied to the four tax reform laws enacted under the Tinubu administration. Two of these laws came into effect in June 2025, while the remaining two take effect on January 1, 2026. Despite public debate and legislative scrutiny surrounding aspects of the reforms, the government has reiterated its commitment to full implementation.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has stated that the new tax regime will deliver broad-based relief across the economy. According to him, about 98 percent of Nigerian workers will either pay no Pay-As-You-Earn (PAYE) tax or pay significantly reduced amounts. Similarly, roughly 97 percent of small businesses will be exempt from corporate income tax, value-added tax, and withholding tax, while larger companies will benefit from lower effective tax burdens.

Oyedele noted that the reform bills spent nine months at the National Assembly, from October 2024 to June 2025, allowing ample time for preparation. Since the laws were signed, the government has focused on system upgrades, capacity building, and stakeholder sensitisation to ensure a smooth rollout.

With the Tax ID portal now live from January 2026, Nigerians can expect a more transparent, efficient, and user-friendly tax administration system that supports economic growth, inclusivity, and shared prosperity.

Nigeria’s ongoing effort to modernise its tax and revenue framework is gathering pace at the sub-national level, as more states align their fiscal policies with the Federal Government’s reform agenda. In the latest development, Anambra State has become the third state in the country to adopt the Harmonised Taxes and Levies Law, joining a growing list of states seeking to simplify revenue administration, reduce inefficiencies, and ease the burden on citizens and businesses.

The law was signed on Tuesday in Awka by Anambra State Governor, Charles Chukwuma Soludo, according to a statement issued by the Joint Revenue Board. The move places Anambra firmly within the emerging national consensus around tax harmonisation and structured revenue collection.

Just days earlier, Zamfara State took a similar step when Governor Dauda Lawal signed a comprehensive revenue reform law. Taken together, the actions by Anambra and Zamfara reinforce a broader alignment with the national tax reform agenda championed by President Bola Ahmed Tinubu, which prioritises clarity, fairness, and efficiency in public finance management.

These recent enactments build on the earlier passage of a revenue administration law in Ekiti State, marking a coordinated shift by state governments towards harmonised, transparent, and people-focused revenue systems. Analysts see this as a significant break from the past, where fragmented and overlapping tax regimes at the state and local government levels often created confusion, discouraged investment, and fuelled public resentment.

According to the Joint Revenue Board, Governor Soludo’s assent formally makes Anambra the third state to domesticate the Harmonised Taxes and Levies Law, which standardises the list of taxes and levies that can be collected by state authorities. In Zamfara, the newly signed law goes further by repealing and re-enacting consolidated revenue statutes, establishing a Zamfara State Internal Revenue Service, and creating a legal framework for the harmonisation of both tax and non-tax revenues.

The Zamfara law also provides detailed guidelines for tax assessment, collection, accounting, and enforcement, ensuring that all revenues accruing to the state government are managed under a single, coherent system. Collectively, these reforms are designed to dismantle outdated practices and replace them with technology-driven, transparent, and economically efficient processes.

“The enactment of these laws reflects a clear policy direction by state governments to dismantle fragmented and outdated revenue practices, replacing them with a pro-people, coherent and harmonised system that leverages technology, prioritises fairness and equity, certainty, and economic efficiency,” the statement noted. It added that aligning approved taxes and levies within the national framework would significantly reduce multiple and overlapping charges that have long imposed undue strain on individuals and businesses.

For businesses and investors, the implications are far-reaching. Beyond improving administrative efficiency, harmonised tax regimes are expected to curb arbitrary collections and the activities of unauthorised revenue agents, which have been a persistent challenge in many states. Small and medium-scale enterprises (SMEs), often the most vulnerable to informal levies and enforcement abuses, are likely to benefit the most from clearer rules and predictable obligations.

The reforms are also consistent with a broader fiscal philosophy that seeks to improve compliance through clarity rather than coercion. By simplifying tax structures and clearly defining what can and cannot be collected, governments aim to restore public trust and ensure that revenue systems support development rather than function as purely extractive mechanisms.

Momentum is building across the federation, with the Joint Revenue Board noting that several other states, including Lagos State, Katsina State, and Bauchi State, have advanced legislative processes toward enacting similar harmonised tax and levies laws. As more states come on board, observers believe Nigeria could be on the cusp of a more unified, transparent, and investor-friendly sub-national tax environment—one that supports economic growth while easing long-standing pressures on citizens and businesses alike.