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Things To Know About Nigeria’s New Tax Laws

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.
READ ALSO:Nigerian Lawmakers Approve Tinubu Tax Reform Bills
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.
READ ALSO:Senate Passes Two Tax Reform Bills
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:
READ ALSO:FG Sues Binance For $81.5bn In Economic Losses, Back Taxes
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
READ ALSO:JUST IN: Tax Reforms Here To Stay, Says Tinubu
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
UPDATED: Renowned Evangelist, Uma Ukpai, Is Dead
Renowned Nigerian evangelist and spiritual leader of Uma Ukpai Evangelistic Association, Rev. Dr. Uma Ukpai, is dead.
This was confirmed in a statement on Monday by his family, who said he passed away on October 6 2025 at the age of 80.
The family described his passing as a “glorious transition” from a life of devoted service to eternal rest.
Ukpai, widely recognised as a spiritual general and founding father of faith, dedicated over six decades of his life to evangelism, dynamic teaching of the Word, and prophetic demonstrations of God’s power.
READ ALSO:BREAKING: Rev Uma Ukpai Is Dead
His ministry impacted millions of lives in Nigeria and around the world, shaping destinies and nurturing spiritual growth across generations.
“He was a faithful soldier of the cross who devoted his life to spreading the gospel with passion and integrity.
“His teachings, prophetic insights, and mentorship have left a lasting legacy that will continue to inspire believers for years to come,” his family said.
Over the course of his ministry, Ukpai became known for his fiery evangelistic campaigns, transformative teachings, and commitment to empowering both clergy and lay leaders.
READ ALSO:Umahi Fires Back At Makinde Over Lagos-Calabar Highway Cost
Beyond his spiritual work, he was also celebrated as a loving husband, devoted father, and mentor to countless individuals who regarded him as a guide in faith and life.
The family expressed gratitude for the life and work of Ukpai, highlighting that while they mourn his physical absence, they rejoice that he has “finished his race and is now resting in eternal praise.”
They assured the public that details of his obsequies would be shared in due course.
Ukpai’s ministry, spanning over sixty years, leaves behind a profound spiritual and social legacy, with churches, educational initiatives, and humanitarian efforts that continue to influence communities globally.
His life, the family said, was a testament to the biblical truth that “to live is Christ, and to die is gain” (Philippians 1:21).
News
JUST IN: FG Enforces No-work-no-pay On Striking ASUU Members
The Federal Government has directed vice-chancellors of federal universities across the country to strictly enforce the “no work, no pay” policy against members of the Academic Staff Union of Universities currently participating in the ongoing nationwide strike.
The directive was contained in a circular dated October 13, 2025, and signed by the Minister of Education, Dr. Tunji Alausa, according to The PUNCH.
The circular was copied to the Head of the Civil Service of the Federation, Permanent Secretary of Education, Pro-Chancellors of all federal universities, Director-General of the Budget Office of the Federation, the Accountant-General of the Federation, and the Executive Secretary of the NUC.
READ ALSO:ASUU Declares Two-week Strike, Orders Members To Down Tools On Monday
According to the circular, the Federal Ministry of Education expressed dissatisfaction over reports of the continued industrial action by ASUU despite repeated calls for dialogue, stressing that government would no longer tolerate non-compliance with extant labour laws.
“In line with the provisions of the Labour Laws of the Federation, the Federal Government reiterates its position on the enforcement of the ‘No Work, No Pay’ policy in respect of any employee who fails to discharge his or her official duties during the period of strike action,” the circular reads.
The minister directed all vice-chancellors of federal universities to immediately conduct a roll call and physical headcount of all academic staff in their institutions.
He also instructed them to submit a comprehensive report indicating staff members who are present and performing their official duties, and those absent or participating in the strike.
READ ALSO:JUST IN: ASUU Issues Ultimatum To FG Over Unresolved Issues
Alausa further directed that salary payment for the period of work stoppage be withheld from those who fail to perform their duties.
He clarified that members of the Congress of University Academics and the National Association of Medical and Dental Academics, who are not part of the strike, are exempted from the directive and will not face any salary deductions.
The minister also tasked the National Universities Commission to monitor compliance with the directive and submit a consolidated report to the ministry within seven days of receiving the circular.
“Please, treat this matter with utmost urgency and a deep sense of responsibility in national interest,” Alausa urged the university heads.
READ ALSO:ASUU Directs Members To Begin Nationwide Strike Education
The federal government had threatened to enforce the policy amid the ongoing nationwide strike by the lecturers.
The lecturers on Sunday declared a total and comprehensive warning strike starting from Monday, October 13.
ASUU is currently demanding the conclusion of the renegotiated 2009 FGN-ASUU agreement, the release of the withheld three and a half months’ salaries, sustainable funding of public universities, revitalisation of public universities, and cessation of the victimisation of lecturers in LASU, Prince Abubakar Audu University, and FUTO.
Others are payment of outstanding 25-35% salary arrears, payment of promotion arrears for over four years and release of withheld third-party deductions (cooperative contributions, union check-off dues).
News
BREAKING: Rev Uma Ukpai Is Dead
Rev. Uma Ukpai, an international evangelist who is the founder and president of Uma Ukpai Evangelistic Association, is dead.
Rev. Uma died at the age of 80.
READ ALSO:Head Of Mormon Church Is Dead
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