By The Ameh News Editorial Board
June 29, 2025
For years, the Nigerian tax system has been criticized as fragmented, outdated, and regressive, favoring bureaucracy while burdening the poor and stifling business growth. The new framework, driven by the recommendations of the Presidential Fiscal Policy and Tax Reforms Committee led by Taiwo Oyedele, offers a chance to reverse this narrative.
A Modern Approach to Revenue Collection
At the heart of the reform is the transformation of the FIRS into the Nigeria Revenue Service (NRS), a central authority tasked with consolidating federal revenue collection. This includes revenue streams previously managed by agencies like the Nigeria Customs Service, NIMASA, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and others.
This consolidation aims to simplify the revenue system, eliminate duplication, reduce corruption, and increase transparency. It reflects a modern, unified model seen in countries like the United Kingdom.
Yet, the success of this consolidation depends on execution. Inter-agency rivalry, resistance to change, and entrenched interests could pose serious implementation hurdles. The federal government must establish clear operational structures, inter-agency cooperation protocols, and digital tools to ensure that the reform is not undermined by internal sabotage.
Tax Reliefs That Matter—If Delivered
The reforms introduce tax exemptions for low-income earners—workers earning ₦800,000 annually and below will be exempted from personal income tax. Those earning under ₦250,000 per month will also not be subject to Pay-As-You-Earn (PAYE) deductions.
For the first time in Nigeria’s modern tax history, there is a deliberate focus on equity. Essentials such as food items, education, healthcare, pharmaceuticals, and electricity have been exempted from VAT, further cushioning the impact of economic hardship.
However, the real question is: Will these reliefs be felt by the average Nigerian?
For many small business owners like Bolaji Erigbemi, a printer in Lagos, the reform is welcome in theory, but the day-to-day reality remains unchanged. “Until January 1, 2026 comes, and I no longer see men from the state and local governments asking me for one levy or the other, then I can celebrate,” he said.
Indeed, businesses across the country will need reassurance that the harassment and multiple levies by state and local authorities, often under the guise of ‘official revenue collection’, will be addressed.
A Boost for Businesses—If Protected
The exemption of SMEs from corporate income tax, VAT collection, and certain withholding tax obligations could be a game-changer. According to Taiwo Oyedele, over 90% of small businesses now fall outside the tax net, allowing them to grow, formalize, and reinvest.
Furthermore, the reduction of the corporate tax rate for medium and large businesses from 30% to 25% signals a more competitive tax environment. But experts warn that implementation must be closely monitored to prevent misinterpretation and abuse.
Dr. Muda Yusuf, a member of the Nigeria Custom Service Board and Executive Director at the Centre for the Promotion of Private Enterprise (CPPE), described the reforms as “a major milestone,” but urged ongoing public awareness campaigns, digital systems, and stakeholder engagement.
Equity, Federalism, and the Roadblocks Ahead
While the reforms are being widely celebrated, concerns persist. Mr. Adebiyi Adesuyi, CEO of Wealthgate Advisors, raised important points about federal balance. He warned that the new unified tax system could widen the fiscal gap between Nigeria’s regions, especially if some continue to contribute disproportionately while receiving equal allocations.
“It may become a case of robbing Peter to pay Paul,” he cautioned.
Other stakeholders also questioned the fate of numerous local levies still being collected by state agents, particularly in markets and along transport routes. Truck drivers and small traders often face extortion from “area boys” and local officials—practices that erode trust in governance and hinder commerce.
The Promise and the Caution
The editorial stance of The Ameh News is clear: the tax reforms are a bold and commendable effort. They reflect sound fiscal thinking and a commitment to promoting inclusive growth. But reforms are only as good as their implementation.
The Nigerian government must now move from policy proclamation to practical execution. This includes building the capacity of the new NRS, harmonizing revenue collection at all levels of government, and enforcing accountability mechanisms that protect taxpayers.
Public education will also be critical. Citizens and businesses need to understand their new rights and responsibilities. Grievance mechanisms must be put in place to address overreach or abuse by rogue tax agents.
Final Word
Nigeria’s new tax law offers a rare opportunity to reposition the country’s economy, empower its most vulnerable, and attract both local and foreign investment. But unless the reforms are implemented transparently and equitably across all levels of government, the hopes they carry could be dashed.
The Tinubu administration has taken a bold step. Now, it must walk the talk—firmly, fairly, and with unwavering focus on results.
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