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Things To Know About Nigeria’s New Tax Laws

Published

5 months ago

June 27, 2025

President Bola Tinubu on Thursday signed four new tax laws aimed at modernising and streamlining the country’s tax system.

In the new tax law, the Value Added Tax rate remains at 7.5 per cent despite initial proposals to increase to 12.5 per cent, but its scope is expanded.

Essential items—such as food, education, healthcare, public transport, residential rent, and exports—are zero-rated to ease inflationary pressure.

For revenue allocation is restructured: now 30 per cent of VAT proceeds are distributed based on consumption (rather than contribution), 50 per cent equally among states, and 20 per cent to population-based allocation.

With the latest development, it is expected that state revenue streams will increase, and it will also discourage tax evasion.

Overview of the four new laws

Nigeria Tax Act: Consolidates various tax rules into a single, simplified code, eliminating over 50 small, overlapping taxes. This reduces complexity and duplication, making it easier for businesses to comply.

Tax Administration Act: Establishes uniform rules for tax collection across federal, state, and local governments, ensuring consistency and reducing administrative conflicts.

Nigeria Revenue Service Act: Replaces the Federal Inland Revenue Service with the independent Nigeria Revenue Service, aiming for greater efficiency and autonomy in tax administration.

Joint Revenue Board Act: Enhances coordination between different government levels and introduces a Tax Ombudsman and Tax Appeal Tribunal to handle disputes fairly.

Key objectives of the new tax rules

Simplify Tax System: Reduces bureaucratic hurdles and overlapping taxes to make compliance easier, especially for small businesses and informal traders.

Increase Revenue Efficiency: Aims to boost Nigeria’s tax-to-GDP ratio from 10% (below the African average of 16–18%) to 18 per cent by 2026 without raising taxes on essential goods.

Reduce Financial Burden: Provides relief for low-income households and small businesses while ensuring high-income earners and luxury consumers contribute more.

Fund Public Services: Increased revenue will support infrastructure, healthcare, and education, reducing reliance on borrowing.

Who benefits and how
Low-Income Households:
Individuals earning up to ₦1 million ($650) annually receive a ₦200,000 rent relief, reducing taxable income to ₦800,000, exempting them from income tax.

VAT exemptions on essential goods and services (food, healthcare, education, rent, power, baby products) lower living costs.

Small businesses:

Businesses with an annual turnover below ₦50 million ($32,400) are exempt from company income tax.
Simplified tax filing without requiring audited accounts reduces compliance costs.

Large businesses:

Corporate tax rates drop from 30 per cent to 27.5 per cent in 2025 and 25 per cent thereafter.
Tax credits for VAT paid on expenses and assets allow businesses to recover the 7.5 per cent VAT.

Charitable, educational, and religious organisations:

Tax incentives for non-commercial earnings, encouraging community-focused activities.
Impact on different groups
Low-Income Earners: Benefit most from income tax exemptions and lower costs for essentials, increasing disposable income.

Small Businesses and informal traders: Simplified rules and tax exemptions encourage compliance and reduce financial strain, potentially formalising more businesses.

High-income earners and luxury consumers face higher VAT on luxury goods and premium services, plus capital gains tax on large share sales.

Government: Expects increased revenue for public services without overburdening vulnerable citizens.

Why reforms were needed

Nigeria’s tax system was outdated, inefficient, and disproportionately harsh on low-income groups.
The low tax-to-GDP ratio (10%) limited funding for critical services like healthcare and infrastructure.
Overlapping taxes and complex rules deterred compliance, especially among small businesses and informal traders.
Public and expert reactions

Positive sentiment: Small business owners welcome tax exemptions but seek clarity on enforcement to avoid unexpected levies.

Low-income earners appreciate relief on essentials but remain cautious about implementation.
Taiwo Oyedele, head of the Presidential Fiscal Policy and Tax Reform Committee, claims 90% public support, emphasising that success depends on awareness and trust.

The reforms align with Tinubu’s administration’s goal to reduce economic inequality and boost fiscal capacity without overburdening citizens.

By encouraging voluntary compliance and reducing reliance on loans, Nigeria aims to strengthen its economy and fund development projects.

These reforms mark a significant step toward a fairer, more efficient tax system, with a focus on supporting vulnerable groups while fostering economic growth. However, their success hinges on transparent enforcement and public trust. For further details, you can refer to official statements from the Nigerian government or credible news sources covering the reforms.
(PUNCH)

News

Edo Dep. Gov. Idahosa Inducted, Bestowed With Rotary Premium Award

Published

10 hours ago

November 15, 2025

Editor

The Edo State deputy governor, Hon. Dennis Idahosa, has been bestowed with the Rotary Premium Award by the Benin Metropolitan Rotary Club, District 9141 in recognition of his humanitarian disposition.

In a statement by his Chief Press Secretary, Mr Friday Aghedo, the deputy governor was accorded this recognition when the humanitarian organization visited his office to induct him into the club

Idahosa expressed appreciation for the recognition and promised to continue to contribute his best for the betterment of the society and humanity.

“When I was growing up, my prayer to God, was Bless me so that I will be a blessing to the world,” he stated.

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He noted that the recognition was in no doubt, a call for higher responsibilities.

Rotary President, Hon. Elizabeth Ativie who gave reasons for the award and investiture, maintained that the induction was based on Idahosa’s humanitarian disposition which is in line with Rotary Club’s doctrine of service above self, humanitarian and community.

“This is a reflection of where your heart is,” she told Idahosa.

The Assistant District Governor of the Club, (AG) Samson Olayiwola of Zone 20, D 9141, later decorated Idahosa with the “Rotarian pin,” the recognized logo of the Rotary Club worldwide.

This was in addition to the presentation of a certificate of membership and embroidered with a sash that uniquely identifies Idahosa as a member of the “RC Benin Metropolitan District.”

News

Doctors’ Strike Continues As NARD Demands Fair Deal, Better Pay

Published

12 hours ago

November 15, 2025

Editor

The Nigerian Association of Resident Doctors (NARD) has called on the Federal Government to immediately conclude a long-delayed Collective Bargaining Agreement (CBA), as their indefinite strike entered its 15th day on Saturday.

It also demanded a review of the outdated Consolidated Medical Salary Structure (CONMESS).

In a statement posted on X on Saturday, the union said: “Dear Nigerians, Doctors Deserve a Fair Deal! For long we’ve waited for a Collective Bargaining Agreement (CBA), a simple, written promise that ensures fairness, clear work terms, and proper pay. But the government keeps delaying, while doctors face rising costs and crumbling morale.

“We demand the immediate conclusion of the CBA and review of the outdated CONMESS salary structure.”

The strike, which began earlier this month, has affected 91 hospitals nationwide, including federal teaching hospitals, specialist institutions, and federal medical centres, disrupting medical services across the country.

NARD said the union’s 19-point demand list is reasonable and necessary for the welfare of doctors and patients.

The list includes the payment of arrears under the CONMESS salary structure, disbursement of the 2025 Medical Residency Training Fund, prompt payment of specialist allowances, recognition of postgraduate qualifications, and improved working conditions.

The union stressed that these measures are essential to sustain doctors and maintain a functional healthcare system.

President Bola Tinubu has also directed the Ministry of Health to immediately resolve the strike, noting that the government is addressing the doctors’ demands.

Despite the directive, NARD said delays in finalising the CBA and reviewing salaries have continued to demoralise doctors, many of whom face rising living costs while providing critical medical services.

News

VIDEO: Fayose Speaks About Own Death, Burial

Published

12 hours ago

November 15, 2025

Editor

Former Ekiti State Governor, Ayodele Fayose, has said his body should be buried within four weeks of his death. Fayose also laid out detailed instructions for his burial, including that nobody should visit after he is buried.

He said his body and the burial arrangement should be handled by the Ekiti State Government.

In a six-minute video shared on YouTube by City Edge TV on Saturday, Fayose, who turns 65 today, said: “Remember me for anything. And when I die, let me say this. Death is inevitable. My body belongs to the Ekiti state government… I’m delivering a letter to the governor.”

Fayose added that regardless of when his death occurs, the state government should take charge of his remains.

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“Let us say in another 20, 30 years, 15 years, whatever time, for the glory of God. The Ekiti state government takes over my body, and I must be buried within four weeks. Because the state might not be ready within two, three days, we allow them four weeks.”

Fayose added that his children should wear their own clothes and follow the directives of the government at the time of his death.

About his final resting place, he said: “My grandmother’s home, the mother of my father, I’ve made the garden there. I should be laid to rest there. After my departure, nobody must come there again. Allow me to go. If you want to show me love, if you want to take care of me, do so now.”

The channel also shared a 20-minute video showing popular juju musician King Sunny Ade serenading the former governor on stage while he danced at his birthday thanksgiving reception.

Celebrated by several political figures. Minister of the Federal Capital Territory Nyesom Wike described Fayose as “a valuable friend and brother, who will never pretend about where he stands on issues,” adding: “Ayodele, my younger brother, may you reach the age of your elder brother in good health, and may God continue to make your days on earth fruitful, with immeasurable blessings.”

Ekiti State Governor, Biodun Oyebanji, also congratulated Fayose in a statement issued by his Chief Press Secretary, Yinka Oyebode, praising his “remarkable contributions” to the state and describing him as: “A leader who loves and connects well with the people, a respected grassroots politician and mobiliser, and a statesman who will never shy away from bearing his mind in his determination to see a more prosperous state and country.”

Watch the video here