Tax

Former Vice President Atiku Abubakar has called for a fresh round of legislative consideration of the tax reform laws introduced by the administration of President Bola Tinubu, citing what he described as serious constitutional flaws arising from discrepancies between the versions passed by the National Assembly and those subsequently gazetted.

In a statement issued late Sunday, Atiku argued that the only lawful remedy available is to return the affected tax laws to the National Assembly for proper reconsideration, passage, and presidential assent. His intervention comes at a critical moment, as the Federal Government plans to implement the remaining tax reform laws from January 1, 2026, despite mounting concerns from lawmakers and legal commentators.

According to Atiku, the controversy took a decisive turn after the Senate confirmed that the gazetted version of the Tax Act does not fully reflect what was debated, harmonised, and approved by both chambers of the National Assembly. He described this confirmation as a constitutional red flag that cannot be brushed aside through administrative fixes or expedited re-gazetting.

Atiku stressed that under Section 58 of Nigeria’s 1999 Constitution, the lawmaking process is explicit and sequential. A bill must be passed by both the Senate and the House of Representatives, receive presidential assent, and only then be gazetted. In his view, gazetting is merely an administrative act that gives public notice to an already valid law; it does not have the power to amend, correct, or validate a defective or altered piece of legislation.

He warned that any law published in a form that was never approved by the National Assembly is legally invalid. “Any post-passage insertion, deletion, or modification without legislative approval amounts to forgery, not a clerical error,” Atiku said, adding that legality cannot be restored by speed, discretion, or internal directives.

The former Vice President was particularly critical of reports suggesting that authorities may be considering a rushed re-gazetting of the tax laws while legislative investigations into the alleged alterations are still ongoing. He argued that such a move would undermine parliamentary oversight and set a dangerous constitutional precedent. In his view, neither the Senate President, Godswill Akpabio, nor the Speaker of the House of Representatives, Tajudeen Abbas, has the authority to validate or regularise laws that were not properly passed in identical form by both chambers.

“The only lawful path,” Atiku maintained, “is fresh legislative consideration, re-passage in identical form by both chambers, fresh presidential assent, and proper gazetting.” Anything short of this, he argued, risks eroding constitutional order and exposing the tax reforms to prolonged legal challenges.

The controversy itself emerged after members of the House of Representatives raised concerns that the gazetted versions of certain tax reform laws differed materially from the versions approved by lawmakers. The laws at the centre of the dispute are the Nigerian Tax Act and the Nigerian Tax Administration Act, both scheduled to take effect on January 1, 2026. Subsequent Senate confirmation that discrepancies exist has intensified calls for corrective legislative action.

Why the matter carries weight is tied to the central role of the tax reforms in the Tinubu administration’s economic agenda. The reforms are designed to ease the tax burden on low-income earners and small businesses, while improving long-term government revenue through economic expansion, improved compliance, and a broader tax base. However, unresolved constitutional defects could render the laws vulnerable to court challenges, potentially stalling implementation and undermining investor and public confidence.

Atiku acknowledged that fresh legislative consideration would likely delay the rollout of the new tax regime but argued that such a delay is preferable to implementing laws that may later be struck down by the courts. In his view, a transparent and constitutionally sound process would ultimately strengthen the credibility of the reforms and protect the rule of law.

For context, four tax reform laws have been enacted under the Tinubu administration. Two of them took effect in June 2025, while the remaining two are scheduled for January 1, 2026. Despite the controversy, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has insisted that implementation will proceed as planned. He has, however, indicated that the Federal Government remains open to working with the National Assembly should remedial action become necessary.

As the debate continues, Atiku’s intervention adds political and constitutional weight to the growing calls for caution, underscoring the tension between reform momentum and adherence to due legislative process.

Nigeria’s sweeping tax reform agenda will move forward as scheduled, with two major fiscal laws set to take effect on January 1, 2026, despite concerns raised by the House of Representatives over alleged alterations to the gazetted versions of the legislation. This assurance was given by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, following a meeting with President Bola Ahmed Tinubu in Abuja.

Speaking to journalists after the briefing, Oyedele said the Federal Government remains firmly committed to the implementation timeline of the Nigerian Tax Act and the Nigerian Tax Administration Act. According to him, the reforms are designed to ease the tax burden on ordinary Nigerians, improve fairness in the system, and stimulate sustainable economic growth. While acknowledging the concerns expressed by lawmakers, he stressed that the overall objectives of the reforms outweigh the current controversy and that the commencement date will not be shifted.

The comments come amid ongoing deliberations by the House of Representatives, whose committee is reviewing allegations that some provisions in the gazetted tax laws differ from what was originally debated and passed by the National Assembly. Lawmakers have argued that any discrepancies should be addressed before full implementation, with some calling for a temporary suspension of the new laws.

Oyedele clarified that four separate tax reform laws have been enacted as part of the administration’s broader fiscal overhaul. Two of these—the Nigerian Revenue Service Establishment Act and the Joint Revenue Service Establishment Act—already came into force on June 26, 2025. He explained that these earlier commencements were intentional, allowing new institutions to be set up, staffed, and operational ahead of the more comprehensive rollout scheduled for 2026.

The remaining two laws, he said, are legally and administratively ready to take effect on January 1. “The plan to commence the new laws on January 1, 2026, will go ahead as scheduled because these reforms are designed to provide relief to the Nigerian people,” Oyedele stated. He added that the executive arm is open to working with the National Assembly if any remedial or clarificatory action is required, but such engagements will not derail the implementation timeline.

A major pillar of the reforms is broad-based tax relief for workers and businesses. Oyedele disclosed that under the new framework, about 98 percent of Nigerian workers will either pay no Pay-As-You-Earn (PAYE) tax or pay significantly lower rates. For businesses, the impact is even more pronounced at the lower end of the economy: approximately 97 percent of small businesses will be exempt from corporate income tax, value-added tax, and withholding tax. Large companies, while still contributing, are expected to benefit from reduced and more predictable tax liabilities.

Beyond immediate relief, Oyedele emphasised that the reforms are not designed to boost government revenue through higher tax rates. Instead, the focus is on expanding the economy, widening the tax base, eliminating wasteful and distortionary incentives, and improving compliance. He noted that better tax awareness, simpler processes, and a stronger tax culture will ultimately drive revenue growth in a more sustainable way.

Providing context, Oyedele explained that the tax reform bills spent about nine months in the National Assembly between October 2024 and June 2025, giving stakeholders ample time to prepare. Since the laws were signed, the government has invested the past six months in capacity building, system upgrades, and nationwide sensitisation to ensure a smooth transition.

The controversy was sparked earlier in December when a lawmaker alleged discrepancies between the gazetted laws and the versions passed by both chambers of the National Assembly. In response, the House inaugurated a committee to review the legislative and administrative process surrounding the Acts. While that review continues, Oyedele maintained that tax reform is an evolving process and that Nigeria cannot afford to delay changes aimed at promoting growth, inclusivity, and shared prosperity.

Nigeria’s National Assembly has ordered an immediate review and re-gazetting of the country’s recently published tax reform laws following public backlash and allegations that some provisions in the gazetted versions differ from what lawmakers debated and approved. The move, announced on Friday, December 26, 2025, signals an effort by the legislature to protect the integrity of the lawmaking process and restore public confidence in the nation’s evolving tax framework.

In a statement issued in Abuja, the spokesperson of the House of Representatives, Akin Rotimi, said the leadership of the National Assembly had taken decisive institutional steps to address the controversy. According to him, the Green Chamber, under the leadership of Speaker Tajudeen Abbas, has inaugurated an ad hoc committee to investigate the matter thoroughly.

Rotimi explained that the committee’s mandate is to review the legislative and administrative handling of the tax reform Acts, establish the sequence of events that led to their gazetting, and identify any lapses, irregularities, or possible external interferences that may have occurred in the process. He stressed that the review is designed to safeguard public interest and uphold the credibility of Nigeria’s legislative institutions.

The controversy centres on four major laws that were recently signed by President Bola Ahmed Tinubu and subsequently published in the Federal Government’s Official Gazette. These are 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. Public commentary and concerns from within the legislature have questioned whether the versions gazetted accurately reflect the bills passed by both chambers of the National Assembly.

In response, the National Assembly has directed the Clerk to the National Assembly to re-gazette the Acts and issue Certified True Copies of the versions duly passed by both chambers — the House of Representatives and the Senate. Rotimi said this step is intended to clarify the official legislative record and eliminate any confusion about the authentic content of the laws.

According to the statement, the review process is being conducted strictly within the framework of the Constitution of the Federal Republic of Nigeria, the Acts Authentication Act, the Standing Orders of both chambers, and established parliamentary practice. The House emphasised that the exercise does not imply any admission of wrongdoing by the legislature, nor does it concede any defect in the exercise of its legislative authority.

Rotimi urged Nigerians to allow the institutional processes of the National Assembly to run their course without speculation or conjecture. He noted that the review is purely procedural and administrative, and does not prejudice the powers or actions of any other arm of government, including the executive branch that granted presidential assent to the bills.

The decision follows concerns raised on the floor of the House on December 17, 2025, by Hon. Abdulsammad Dasuki (PDP, Sokoto), who invoked a matter of privilege to draw attention to alleged discrepancies between the gazetted tax laws and the versions passed by lawmakers. Dasuki said his personal review revealed material differences, suggesting that the published laws did not fully reflect what was debated, harmonised, and approved by both chambers.

The leadership of the National Assembly said the review will help establish clarity, preserve the integrity of the legislative process, and ensure that Nigeria’s ambitious tax reforms rest on a sound legal foundation. By ordering a re-gazetting of the laws, lawmakers aim to reassure citizens, investors, and stakeholders that due process remains central to governance, especially at a time when tax policy is critical to revenue mobilisation and economic reform.

Lagos State Governor Babajide Sanwo-Olu has reassured Nigerians that the ongoing federal tax reforms are designed to protect small businesses and low-income earners, not to burden the poor or tilt the system in favour of the wealthy. According to the governor, the reforms aim to correct long-standing inefficiencies in Nigeria’s tax framework and create a fairer, more transparent system that works for everyone.

Sanwo-Olu gave this assurance on Tuesday at the Lagos Tax Reform Summit held in Ikeja, just days ahead of the planned implementation of Nigeria’s new Tax Act, which is scheduled to take effect on January 1, 2026. The reforms have sparked public debate in recent weeks, with some stakeholders calling for a pause in implementation amid allegations that sections of the tax laws passed by the National Assembly were altered in the final gazetted copies.

Addressing these concerns directly, the governor acknowledged that apprehension among citizens and business owners was understandable, especially in an economy already grappling with inflationary pressures and high operating costs. However, he insisted that fears about the reforms disproportionately hurting the poor were misplaced.

“I know some people fear that these reforms will hurt the poor and favour the wealthy. That is simply not true,” Sanwo-Olu said. “The goal of the new tax law is simple: protect small businesses, ensure that the wealthy meet their obligations, close revenue leakages, and bring more people fairly into the tax system.”

He described the reforms as a necessary intervention to fix a tax structure that has been inefficient and fragmented for decades. In his view, the new framework focuses less on raising tax rates and more on improving compliance, eliminating duplication, and widening the tax net in a balanced way.

Sanwo-Olu also praised Bola Ahmed Tinubu for championing the reforms at the federal level, describing the effort as a bold and courageous move. He noted that meaningful reform is rarely painless, but stressed that the country is already beginning to see signs of progress.

“These changes are not easy, but the hardest part is already giving way to real progress,” the governor said. “It takes experience and confidence to fix a system that has been broken for too long, and I commend President Tinubu for taking that step.”

Reaffirming Lagos State’s alignment with the federal agenda, Sanwo-Olu pledged the state’s full cooperation in implementing a harmonised tax system that promotes economic growth, fairness, and predictability. He emphasized that Lagos, as Nigeria’s commercial nerve centre, has a strong interest in ensuring that tax reforms encourage enterprise rather than stifle it.

“The reforms championed by the Federal Government are not about increasing tax burdens,” he explained. “They are about fixing inefficiencies, eliminating multiple taxation, and rebuilding trust in the tax system. Lagos will continue to work closely with federal authorities to ensure a tax environment that is fair, predictable, and beneficial to all.”

The summit, themed “The Lagos Implementation Road Map – From Reforms to Results: Creating a Tax Environment that Works for All,” was jointly organised by the Office of the Special Adviser on Taxation and Revenue and the Lagos State Treasury Office. It brought together policymakers, regulators, business leaders, and other stakeholders to discuss how federal tax policies can be effectively translated into people-centred outcomes at the state level.

Special Adviser on Taxation and Revenue, Mr. Abdulkabir Ogungbo, revealed that Lagos has already set up a state-level committee to work closely with the Presidential Committee on Fiscal Policy and Tax Reforms. This collaboration has involved extensive consultations with ministries, revenue agencies, financial institutions, transport operators, and local governments to ensure broad-based buy-in.

Similarly, Commissioner for Finance, Mr. Abayomi Oluyomi, stressed that synergy between federal and state governments would be critical to the success of the reforms. He noted that improved tax efficiency would directly impact governments’ ability to fund infrastructure, deliver public services, and improve living standards.

On his part, Chairman of the Lagos State Internal Revenue Service, Mr. Ayodele Subair, said the new framework would simplify tax obligations for small and medium-sized enterprises, protect low-income earners, and reduce compliance costs. He added that Lagos is embedding the principles of the federal reforms into its governance processes in line with the state’s THEMES Plus development agenda.

Delivering the keynote address, Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, said the reforms are designed to unify Nigeria’s tax system, enhance transparency, and restore taxpayer confidence nationwide.

While concerns remain, including warnings from some analysts about the potential impact of provisions such as higher capital gains tax and new levies, Lagos State officials insist that the overarching goal of the reforms is long-term economic sustainability. According to Sanwo-Olu, effective implementation and continuous stakeholder engagement will be key to ensuring that the reforms deliver growth without leaving vulnerable citizens behind.

Ekiti State has taken a landmark step in Nigeria’s ongoing fiscal reforms by becoming the first subnational government to domesticate the Nigeria Tax Administration Act (NTAA), reinforcing its commitment to modern, transparent, and efficient revenue administration. The move positions the state at the forefront of tax governance reform and signals a broader shift toward harmonised tax practices across the federation.

Governor Biodun Oyebanji formalised this transition on Wednesday with the signing into law of the Ekiti State Revenue Administration Law, 2025. The signing ceremony, held at the Executive Council Chamber in Ado-Ekiti, marked a double milestone for the state, as the governor also assented to the 2026 Appropriation Bill, tagged the “Budget of Sustainable Governance,” with a total size of N415.57 billion.

According to the state government, the newly enacted revenue law domesticated the NTAA at the subnational level, aligning Ekiti’s tax administration framework with national standards and ongoing federal tax reforms. By doing so, Ekiti has effectively set a template for other states seeking to streamline their tax systems, reduce leakages, and improve compliance.

Key highlights of the new revenue law

The Ekiti State Revenue Administration Law, 2025, repeals the Ekiti State Board of Internal Revenue Law of 2019, replacing it with a more robust and technology-driven framework. One of the most significant changes introduced by the law is the transition to a fully digital tax system. All tax payments, billing, and receipting processes in the state are now strictly electronic, eliminating cash-based transactions that have historically encouraged leakages and inefficiencies.

Under the new framework, the Ekiti State Internal Revenue Service (EKIRS) is established as the sole authority for revenue collection, effectively curbing the activities of unauthorised consultants and third-party collectors. This centralisation is expected to improve accountability and ensure that revenues due to the state flow directly into government coffers.

The law also empowers EKIRS with prosecutorial authority, allowing it to enforce compliance through administrative penalties and legal action against defaulters. In addition, Ekiti has adopted the harmonised list of taxes approved by the Joint Revenue Board, providing clarity and certainty for businesses operating within the state and reducing the risk of multiple taxation.

Speaking at the ceremony, Governor Oyebanji said the reforms were aimed at building trust between the government and taxpayers. “From today, Ekiti adopts a strictly electronic payment system. This will eradicate leakages and ensure that all payments go directly into the state’s coffers,” he stated, adding that transparency and fairness would remain central to the administration’s fiscal philosophy.

The Executive Secretary of the Joint Revenue Board, Segun Adesokan, commended Ekiti for fulfilling a commitment made during the Board’s retreat in Ikogosi last September. He described the move as historic, noting that Ekiti is the first state to domesticate the NTAA. Adesokan expressed optimism that other states would follow suit, paving the way for a more professional, autonomous, and efficient subnational revenue system nationwide.

The 2026 fiscal outlook

Alongside the tax reform, Governor Oyebanji also signed the 2026 budget into law. The N415.57 billion spending plan reflects a balanced fiscal strategy, with 53 per cent allocated to recurrent expenditure and 47 per cent dedicated to capital projects. According to the governor, the budget prioritises the completion of ongoing projects, while also strengthening critical sectors such as infrastructure and agriculture to drive inclusive growth.

He explained that the improved revenue administration framework would play a key role in funding development initiatives without placing undue burden on residents or businesses. The ceremony was attended by top state officials, including Deputy Governor Monisade Afuye and Speaker of the Ekiti State House of Assembly Adeoye Aribasoye, highlighting broad political support for the reforms.

What you should know

The Nigeria Tax Administration Act is a cornerstone of the Federal Government’s 2025 tax reform agenda. It introduces a unified procedural framework for tax assessment, collection, and enforcement across all tiers of government, replacing fragmented legacy laws. The Act is scheduled to take effect from January 2026.

Despite its objectives, some provisions of the NTAA have generated debate among stakeholders, particularly in emerging sectors. Players in the cryptocurrency industry, for instance, have raised concerns over proposed taxation of digital asset transactions. The Act introduces stringent compliance requirements for Virtual Asset Service Providers, including mandatory registration, extended KYC data retention, and compulsory reporting of large or suspicious transactions to tax authorities and the Nigerian Financial Intelligence Unit.

By domesticating the NTAA early, Ekiti State has not only aligned itself with national reforms but also sent a clear signal of its readiness to embrace modern tax governance and sustainable fiscal management.

The Economic Community of West African States (ECOWAS) has unveiled a landmark policy that will see all air ticket taxes scrapped across the sub-region beginning January 1, 2026. The decision, expected to sharply reduce airfares and stimulate greater regional mobility, marks one of the most ambitious aviation reforms ever undertaken within West Africa.

The development was disclosed by Chris Appiah, ECOWAS Director of Transport and Communications, during an engagement with journalists at the ECOWAS Council of Ministers meeting held in Abuja. Appiah explained that the policy emerges from an extensive aviation reform agenda endorsed by the Authority of Heads of State and Government in December 2024, designed to remove structural barriers that have kept air travel in West Africa among the most expensive in the world.

High Taxes Blamed for Sky-High Airfares

Appiah revealed that multiple studies conducted over nearly ten years consistently identified punitive taxes and aviation-related charges as the single largest driver of high airfares in the region. These costs have made intra-regional travel prohibitive for millions of citizens and uncompetitive for businesses.

“On a typical airline ticket within West Africa, between 64% and 70% of the fare paid by travelers is purely taxes and charges,” he said. “From 1st January 2026, the Heads of State have agreed that all member states should remove taxes on air transport.”

He stressed that several of these taxes violate the International Civil Aviation Organisation (ICAO) guidelines, which discourage burdensome levies that restrict passenger movement. Rather than supporting the aviation ecosystem, Appiah argued, the excessive fees have been suppressing demand and weakening the region’s air transport market.

A Boost for Regional Integration and Economic Connectivity

At the heart of the reform is ECOWAS’ long-standing objective to strengthen regional integration through enhanced cross-border connectivity. Appiah noted that transportation—particularly air travel—is a crucial facilitator of economic growth, trade, tourism, and access to essential services such as education and healthcare.

“ECOWAS stands for regional integration, and regional integration thrives on connectivity,” he said. “If a trader wants to buy goods from Lagos to Dakar, for example, he will not pay less than $3,000 for tickets, and a significant portion of that is taxes.”

The removal of these aviation taxes is expected to ease the burden on traders, small businesses, and frequent travelers, while also improving the competitiveness of airlines operating within the region.

Engagements Underway to Ensure Airlines Reduce Fares

ECOWAS is already holding discussions with airlines to ensure that the elimination of taxes translates directly into lower airfares. According to Appiah, the bloc is determined to prevent a situation where airlines retain the cost savings without passing on the benefit to passengers.

“We are working with the airlines to make sure that when the taxes and charges are removed, they also reduce their ticket prices, so the citizens of West Africa can travel freely,” he said.

He added that West Africa currently ranks as the most expensive region for air travel on the continent. Airlines operating in East, Central, and Southern Africa enjoy lower operational charges and therefore offer more competitive pricing.

Preparations for Smooth Implementation by 2026

ECOWAS is working closely with national governments, parliaments, and aviation regulators to ensure the policy is fully implemented by the January 2026 deadline. The bloc aims to harmonise regulatory frameworks, eliminate conflicting national charges, and streamline airport operations to support the tax removal.

Appiah noted that West African charges are in some cases “67% higher than any other region,” contributing to the underperformance of airlines in the sub-region when compared to carriers like Ethiopian Airlines, Royal Air Maroc, and South African Airways.

A Historic Reform Amid Rising Political Instability

The announcement comes at a time when ECOWAS is taking several high-stakes policy decisions as the region grapples with intensifying political and security challenges. On Tuesday, the bloc declared a state of emergency across West Africa following a string of military coups and failed power seizures. A day earlier, ECOWAS directed the deployment of its standby force to the Republic of Benin after a foiled coup attempt.

Despite these challenges, the removal of air ticket taxes stands out as one of the most consequential economic reforms the bloc has undertaken in years—one expected to reshape regional mobility, unlock economic opportunities, and deepen integration among West African nations.

FG, SEC, and NGX Align Strategy on Capital Gains Tax Reform to Support Market Stability

The Federal Government has moved to provide clarity and market stability around the implementation of Nigeria’s recently enacted capital gains tax (CGT) provisions by inaugurating the National Tax Policy Implementation Committee (NTPIC). The committee is expected to guide the rollout of the new tax regime in a way that protects investors, strengthens confidence, and ensures that tax reforms support rather than disrupt the country’s growing capital market ecosystem.

The decision reflects weeks of technical consultations with the Securities and Exchange Commission (SEC) and the Nigerian Exchange Group (NGX Group), both of which advised the government to adopt an evidence-based approach that balances fiscal ambition with market realities. With Nigeria seeking to attract deeper pools of domestic and foreign capital, regulators cautioned that the implementation of the tax must be calibrated to preserve liquidity, protect investor sentiment, and maintain the competitiveness of the market relative to regional peers.

A Structured Approach to Capital Gains Tax Reform

By establishing the committee, the Federal Government signaled a shift from rapid legislative rollout toward a more structured, predictable, and stakeholder-led model of tax implementation. The NTPIC is chaired by Joseph Tegbe, a respected tax and fiscal policy expert, and is tasked with preparing a clear execution framework for the CGT provisions, including guidelines, timelines, and engagement processes with market operators.

The committee’s mandate centers on three strategic priorities:

1. Clarity and transparency in implementation rules, ensuring investors understand how the tax will apply across various asset classes.

2. Broad stakeholder consultation, incorporating feedback from the capital market, corporate sector, and advisory community.

3. Minimal market disruption, with reforms introduced in phases to avoid sudden shocks to liquidity or valuation.

Speaking at the inauguration, Tegbe emphasized that government would avoid tax enforcement models that undermine business activity. “Implementation of the new tax laws will be fair, transparent, and humane,” he stated. “We will not roll out these policies in a way that cripples businesses or investors. Stakeholder engagement will be central to this process.”

Regulators Push for Data-Driven Reform

The committee’s creation follows sustained engagement by the SEC and NGX Group, during which the exchanges highlighted potential risks associated with a rapid CGT rollout. Key concerns included the potential tightening of market liquidity, shifts in investor behavior during tax recalibration, and the risk that unclear implementation could erode the appeal of Nigerian assets to foreign investors at a time when cross-border flows are vital for market depth.

Temi Popoola, Group Managing Director and CEO of NGX Group, welcomed the government’s decision, noting that the reform approach reflects constructive dialogue between policymakers and market leaders. He stressed that NGX supports modernization of the tax system, but that reforms “must be carefully calibrated to protect liquidity, sustain participation, and maintain competitiveness.”

According to Popoola, sustaining investor confidence in emerging markets depends not only on policy design but also on execution. He warned that misaligned reforms risk pushing investors toward competing markets that offer clearer tax environments and lower risk.

Aligning Tax Policy with Market Development Goals

The shift toward a structured implementation model intensified after the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, visited NGX Group. During the visit, market operators provided detailed analysis on the potential effects of abrupt CGT enforcement, including distortions in trading volume, portfolio rebalancing behaviors, and pricing of long-term assets.

Analysts describe the committee’s inauguration as an encouraging sign that the government intends to anchor fiscal reform in consultation and evidence rather than speed alone. For the capital market, the move signals that tax reforms are being aligned with broader development objectives—such as attracting institutional investors, deepening liquidity, and supporting the growth of private capital.

Both SEC and NGX Group have committed to ongoing collaboration with the NTPIC, stating that they will continue to support a reform process that strengthens investor confidence, broadens participation, and integrates the capital market into Nigeria’s long-term economic transformation agenda.

A new economic assessment by the Alliance for Economic Research and Ethics LTD/GTE has raised significant concerns over the Nigeria Tax Act, 2025, warning that several provisions in the newly enacted law could weaken business competitiveness, dampen investor confidence, and reduce Nigeria’s attractiveness as an investment destination in Africa.

Signed into law in June 2025 and scheduled for nationwide implementation on January 1, 2026, the Nigeria Tax Act represents one of the most extensive attempts at tax reform in the country’s recent history. It consolidates more than a dozen existing tax laws into a unified framework aimed at modernizing tax administration, boosting transparency, and expanding government revenue amid persistent fiscal pressures.

A Major Restructuring of Nigeria’s Tax Framework

According to the Alliance’s analysis, the government’s stated objectives include reducing tax leakages, tightening compliance, curbing evasion, and ensuring that all sectors of the economy contribute equitably to national development. The reforms are also intended to stabilize revenue inflows in the face of declining oil earnings and rising public debt.

However, the report notes growing unease among businesses, investors, and industry stakeholders, many of whom believe the scale of the changes—and the speed of implementation—could impose severe financial and administrative burdens. Analysts argue that the absence of adequate transitional arrangements may disrupt business planning, heighten uncertainty, and increase the cost of doing business in Nigeria.

The Alliance summarized its concerns succinctly: “The severe increase in the Capital Gains Tax, the imposition of a new Development Levy, the uncertainty cast upon the Free Trade Zones, and the unusual domicile of the Single Window Trade Platform threaten to cripple the very investment and business growth that Nigeria desperately needs to secure its long-term economic future.”

Key Provisions Drawing Criticism

One of the most contentious elements of the Act is the sharp increase in Capital Gains Tax (CGT) for companies, from 10% to 30%. This aligns CGT with the corporate income tax rate—a shift that analysts describe as unprecedented in modern Nigerian tax policy. According to the report, the move represents “a seismic shock to the investment landscape,” as higher CGT could reduce investor returns, discourage mergers and acquisitions, and diminish venture capital and private equity activity.

Another significant change is the introduction of a 4% Development Levy on assessable profits. While the government argues that consolidating multiple small levies into a single charge will improve efficiency, experts warn that the new levy could strain companies operating on thin margins, including manufacturers, retailers, agribusiness firms, and logistics operators.

The Act also introduces a 15% minimum tax rate for multinational corporations with turnover above €750 million, as well as for large domestic companies earning over N50 billion annually. Though aligned with global OECD standards, the requirement is expected to increase compliance costs and administrative workload for affected corporations.

Equally controversial is the removal of longstanding tax incentives for Free Trade Zone (FTZ) operators. Previously considered a cornerstone of Nigeria’s investment promotion strategy, FTZ incentives attracted manufacturers, exporters, and logistics firms to Nigeria. The report describes their abrupt abolishment as “ambiguous and destabilizing,” warning that Nigeria may lose investors to regional competitors offering more predictable incentives.

The Act also expands taxation on digital assets, updates personal income tax bands to become more progressive, and centralizes several administrative functions under a Single Window Trade Platform—a decision the report says lacks clarity on governance structure.

Potential Economic Risks Identified

The Alliance warns that the cumulative effect of the new measures could have far-reaching consequences for Nigeria’s economy. The 200% CGT increase, for instance, is projected to slow long-term capital formation, discourage startup investment, and weaken the deal-making environment essential to innovation-driven growth.

Similarly, the 4% Development Levy may worsen inflationary pressures, particularly for sectors already facing high energy and logistics costs.

Removing FTZ incentives, analysts argue, could redirect investment flows to emerging African markets such as Ghana, Rwanda, and Ethiopia, which are currently lowering business costs and simplifying regulatory frameworks to attract foreign direct investment (FDI).

Large corporations will also face increased reporting obligations under the minimum tax regime, raising compliance costs and potentially reducing operational efficiency.

Opportunities Amid the Concerns

Despite the criticisms, the report acknowledges that the Tax Act contains provisions that could improve long-term fiscal sustainability. The 15% minimum tax may help level the playing field between multinational firms and domestic competitors. Consolidating several levies into a single Development Levy simplifies the tax system, while existing exemptions for SMEs ensure that micro and small enterprises retain room for reinvestment and growth.

If effectively implemented, the reforms could expand Nigeria’s tax base, reduce leakages, and strengthen public-sector accountability.

Regional Competitiveness Under AfCFTA

The report compares Nigeria’s tax direction with ongoing reforms in other African economies:

• Ghana is removing nuisance taxes to attract investment.

• Ethiopia is cutting tariffs for AfCFTA members.

• Rwanda continues to prioritize regulatory stability to attract FDI.

Analysts warn that Nigeria’s heavier tax burden could erode its competitiveness under the African Continental Free Trade Area (AfCFTA), particularly as manufacturing and export-oriented firms seek lower-cost bases across the continent.

Recommendations and Conclusion

To mitigate risks, the Alliance recommends moderating the CGT increase through a phased approach beginning at 15%, redesigning FTZ incentives rather than abolishing them, issuing comprehensive implementation guidelines through the Federal Inland Revenue Service (FIRS), and aligning tax reforms with AfCFTA competitiveness goals.

Ultimately, the report cautions that if strategic adjustments are not made, the Nigeria Tax Act, 2025 may “function more as a constraint than a catalyst” for economic growth. With other African markets aggressively improving their business environments, Nigeria must carefully recalibrate its approach before the Act takes effect in January 2026.

President Bola Ahmed Tinubu has approved the creation of the National Tax Policy Implementation Committee (NTPIC), a high-level body tasked with coordinating and executing Nigeria’s newly enacted tax laws as the country prepares for a major fiscal transition beginning January 1, 2026.

The decision was announced on Friday in a statement released by Presidential spokesperson, Bayo Onanuga, who described the committee as a critical component of the administration’s broader strategy to modernize Nigeria’s tax system and strengthen public financial management.

According to the statement, the committee will be chaired by Mr. Joseph Tegbe, an experienced tax professional and Fellow of both the Institute of Chartered Accountants of Nigeria (ICAN) and the Chartered Institute of Taxation of Nigeria (CITN). The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, will provide executive oversight, while Mrs. Sanyade Okoli, the Special Adviser to the President on Finance and Economy, will serve as Secretary.

Also named as members were Ismaeel Ahmed and Rukaiya El-Rufai, though the full list of the committee’s composition has not yet been released.

A Central Pillar of the Administration’s Economic Reform Agenda

President Tinubu described the NTPIC as vital to achieving his administration’s economic renewal objectives. He emphasized that the new tax laws—signed earlier this year—are designed to improve fairness, transparency, efficiency, and digital compliance across Nigeria’s revenue ecosystem.

“These new Tax Acts reflect our commitment to building a fair, transparent, and technology-driven tax system that supports economic growth while protecting the interests of citizens and businesses,” Tinubu said. He added that the committee will ensure “coherent, effective, and well-aligned implementation across all levels of government.”

The committee’s mandate is broad. It includes ensuring seamless coordination among federal agencies, harmonizing policy implementation across states, and engaging with private sector stakeholders, civil society groups, and professional bodies. The NTPIC will also drive public awareness campaigns to support nationwide understanding of the new laws before they take effect.

Strengthening Coordination and Policy Alignment

Nigeria’s complex, multi-layered tax system has long been criticized for duplication, inefficiencies, and inconsistent enforcement. The NTPIC is expected to address these challenges by aligning the operational work of key revenue institutions—especially the Federal Inland Revenue Service (FIRS), which will transition into the new National Revenue Service (NRS) under the updated legal framework.

The committee will also be responsible for synchronizing existing tax practices with the provisions of the four new tax reform laws:

• Nigeria Tax Bill

• Nigeria Tax Administration Bill

• Nigeria Revenue Service (Establishment) Bill

• Joint Revenue Board (Establishment) Bill

These reforms stem from the recommendations of the Taiwo Oyedele–led Presidential Fiscal Policy and Tax Reforms Committee, inaugurated in 2023 to overhaul Nigeria’s revenue architecture and reduce the country’s overreliance on borrowing.

Broader Fiscal Context

Earlier this month, President Tinubu appointed Dr. John Nwabueze as Nigeria’s first Tax Ombudsman, an office created under the new Joint Revenue Board Act to protect taxpayers’ rights and resolve disputes.

Meanwhile, FIRS Chairman Zacch Adedeji—who will lead the transition to the National Revenue Service—confirmed that the tax reform laws will become operational on January 1, 2026. He noted that the six-month window before implementation is intended for planning, stakeholder sensitization, and alignment with Nigeria’s fiscal calendar.

The establishment of the NTPIC underscores the administration’s intention to move swiftly toward a more efficient, predictable, and investment-friendly tax environment—one that supports sustainable revenue growth without imposing undue burdens on businesses and citizens.