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Legislative bills

President Tinubu Signs Four Tax Reform Bills, Paving the Way for Economic Growth

Strategic Insights

— 2 min read

President Bola Ahmed Tinubu has signed four tax reform bills into law, marking a significant step towards improving the country's tax landscape. The bills aim to consolidate Nigeria's fragmented tax laws into a harmonised statute, establish a uniform legal and operational framework for tax administration, and create a more autonomous and performance-driven national revenue agency. The reforms also provide for a formal governance structure to facilitate cooperation between revenue authorities at all levels of government. The new laws come into effect on January 1, 2026, and are expected to bring about significant changes in the way taxes are collected and administered in the country.

Key Takeaways:

  • The new tax laws retain Value Added Tax (VAT) at 7.5% and Corporate Income Tax (CIT) at 30% without any increment.
  • VAT exemptions will be provided on essential goods and services consumed by the poor, including food items, medical services, pharmaceuticals, educational fees, and electricity.
  • The Federal Inland Revenue Service (FIRS) has now become Nigeria Revenue Service (NRS), responsible for collecting revenues of other agencies such as the Nigeria Customs Service, Nigeria Upstream Petroleum Regulatory Commission (NUPRC), and Nigeria Ports Authority (NPA).
  • 25% personal income tax applies only to individuals earning above N50 million annually, while small businesses owners are exempted from paying income tax.
  • Company income tax for medium and large companies will be reduced from 30% to 25% starting in 2026.
  • The new laws aim to plug leakages inherent in the collection of taxes by multiple agencies and make the tax system more efficient, fair, and targeted.
  • The implementation of the new laws will commence by January 1, 2026, giving ample time to those saddled with the implementation to prepare and sensitise Nigerians.

Households earning N250,000 or less per month will be exempt from paying tax under the new fiscal laws. The reforms are structured to protect struggling families, encourage productivity, and reduce the stress on middle-income earners, while making the wealthy contribute a bit more.

Statistics:

  • 25% personal income tax will apply only to individuals earning above N50 million annually.
  • Small businesses owners are exempt from paying income tax.
  • Company income tax for medium and large companies will be reduced from 30% to 25% starting in 2026.
  • VAT exemptions will be provided on essential goods and services consumed by the poor, including food items, medical services, pharmaceuticals, educational fees, and electricity.
  • NRS will collect revenues of other agencies such as the Nigeria Customs Service, Nigeria Upstream Petroleum Regulatory Commission (NUPRC), and Nigeria Ports Authority (NPA).

Sources:

  • "President Tinubu Signs Four Tax Reform Bills into Law" (Daily Trust)
  • "Tinubu Signs Tax Bills into Law, Promises Ease of Doing Business" (Channels Television)
  • "Nigeria Revenue Service (Establishment) Act" (Federal Government of Nigeria)
  • "Joint Revenue Board (Establishment) Bill" (Federal Government of Nigeria)
  • "Nigeria Tax Administration Bill" (Federal Government of Nigeria)
  • "Nigeria Tax Bill (Ease of Doing Business)" (Federal Government of Nigeria)

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