The Federal Government of Nigeria has officially gazetted a sweeping set of tax reform laws, signaling what authorities describe as a historic transformation of the nation’s fiscal and revenue administration systems.
The publication of these laws in the government gazette marks their formal adoption, providing a roadmap for a modernized tax regime designed to diversify the country’s revenue base and promote sustainable economic growth.
The tax reform package was signed into law by President Bola Ahmed Tinubu on June 26, 2025, and is now recognized as the cornerstone of the administration’s strategy to reduce overdependence on oil earnings. According to the Presidency, this overhaul aligns with the Renewed Hope Agenda, a national development plan aimed at creating a stable, investor-friendly fiscal environment.
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TJ News Nigeria reports that the reforms are consolidated under four critical legislations:
- Nigeria Tax Act (NTA), 2025
- Nigeria Tax Administration Act (NTAA), 2025
- Nigeria Revenue Service (Establishment) Act (NRSEA), 2025
- Joint Revenue Board (Establishment) Act (JRBEA), 2025
Presidential aide Kamorudeen Yusuf, Personal Assistant on Special Duties to the President, explained in a formal statement that these legislations collectively form the foundation of a tax system overhaul designed to improve compliance, encourage investment, and simplify Nigeria’s tax processes.
Objectives of the New Tax Reforms
The government has framed these reforms as a response to Nigeria’s long-standing tax challenges, including low compliance rates, bureaucratic bottlenecks, and over-reliance on crude oil revenues. According to the Presidency, the legislation will:
- Simplify Nigeria’s tax structure and reduce administrative burdens.
- Support small and medium-sized enterprises (SMEs) through targeted exemptions.
- Create incentives for investment in priority sectors.
- Enhance transparency and predictability in revenue collection.
- Strengthen Nigeria’s fiscal resilience in line with global economic realities.
Experts note that these reforms come at a time when Nigeria faces increasing pressure to expand its revenue sources, as global energy markets remain volatile and oil revenues decline as a proportion of GDP.
Key Provisions of the Tax Reform Laws
The gazetted tax reforms introduce several new rules and adjustments for both domestic and multinational corporations:
- Tax Exemptions for Small Businesses
- Enterprises with an annual turnover of less than ₦100 million and assets below ₦250 million are fully exempted from corporate income tax.
- This provision is designed to reduce the tax burden on SMEs, which constitute a significant portion of Nigeria’s economy.
- Adjusted Corporate Tax Rates for Large Firms
- Top-Up Tax Thresholds
- Domestic companies with revenue above ₦50 billion will be subject to a new top-up tax system.
- Multinational corporations with global revenues exceeding €750 million will also fall under stricter tax compliance requirements.
- The corporate tax rate for large companies may be reduced from 30% to 25% at the discretion of the President.
- This reduction aims to stimulate investment and industrial expansion.
- Introduction of Tax Credits
- A 5% annual tax credit is available for approved investments in priority sectors such as renewable energy, agriculture, manufacturing, and infrastructure.
- Currency Transactions and Tax Payments
- Companies operating in foreign currencies can now remit taxes in naira, calculated at the official exchange rate.
- This measure aims to stabilize tax administration amid Nigeria’s fluctuating forex market.
Implementation Timeline
The Federal Government has outlined a phased rollout plan for the tax reforms to allow businesses and regulators sufficient time to adapt:
- Nigeria Tax Act (NTA) & Nigeria Tax Administration Act (NTAA): Effective from January 1, 2026.
- Nigeria Revenue Service Act (NRSEA) & Joint Revenue Board Act (JRBEA): Operational from June 26, 2025.
Officials from the Ministry of Finance and the Federal Inland Revenue Service (FIRS) emphasize that this staggered timeline is essential for building institutional capacity and modernizing technology infrastructure for effective enforcement.
Government’s Rationale for the Reforms
According to the Presidency, the reforms are not solely focused on boosting revenue collection but are intended to create a long-term strategy for fiscal stability.
“These measures are designed to encourage compliance, incentivize investment in key sectors, and build a more transparent, predictable tax system that can sustain our economy beyond oil,” Yusuf stated.
Economists have long argued that Nigeria’s tax-to-GDP ratio, estimated at less than 10%, is one of the lowest in Africa. The government aims to increase this figure by simplifying tax codes, automating compliance, and widening the tax net.
Implications for Businesses and Investors
For Small Businesses
The exemption of SMEs from corporate tax is expected to ease operational costs and stimulate entrepreneurship. Analysts predict that this could encourage more informal sector participants to formalize their businesses, expanding Nigeria’s taxable base over time.
For Large Corporations
While the proposed corporate tax reduction may appear favorable, large firms will face stricter compliance requirements under the top-up tax system. The new structure also reflects Nigeria’s alignment with international tax standards, including the OECD’s global minimum tax rules for multinationals.
For Investors
The introduction of tax credits for investments in infrastructure and critical sectors positions Nigeria as a competitive investment destination. Experts suggest that predictable taxation policies can improve investor confidence and attract foreign direct investment (FDI).
International Context
Nigeria’s tax reforms mirror global trends in fiscal policy, where emerging economies are modernizing tax systems to improve revenue efficiency and attract capital. Many African nations, including Kenya, South Africa, and Ghana, have recently revised their tax regimes to align with international standards and digital-era realities.
The introduction of top-up taxes for multinationals places Nigeria in line with the OECD’s Base Erosion and Profit Shifting (BEPS) initiative, which seeks to prevent corporations from shifting profits to low-tax jurisdictions.
Outlook for Nigeria’s Economy
Economic analysts say the reforms, if effectively implemented, could mark a turning point for Nigeria’s public finance management. With crude oil revenues contributing a declining share of government income, Nigeria has been under increasing pressure to strengthen non-oil sectors and formalize its vast informal economy.
The Tinubu administration has positioned these reforms as part of a broader economic recovery agenda. Officials argue that tax policy predictability will improve fiscal discipline, enhance infrastructure development, and drive inclusive growth.
However, experts caution that success will depend on enforcement, technology deployment, and stakeholder buy-in from both businesses and citizens.
For more context on Nigeria’s economic reforms, readers can explor
Conclusion
The gazetting of Nigeria’s new tax reform laws represents one of the most ambitious fiscal policy overhauls in decades. By exempting SMEs, introducing tax credits, and aligning corporate taxation with global best practices, the Federal Government seeks to create a transparent and investor-friendly system capable of sustaining long-term growth.
The phased implementation of these laws provides businesses with time to adjust, while also signaling Nigeria’s readiness to modernize its tax administration. Analysts will be watching closely to see if these reforms achieve their intended objectives of boosting revenue, attracting investment, and stabilizing the economy beyond oil dependency.
