Permit me to first of all profusely thank the organizers of this event, House of Representatives’ Press Corps for deciding that we will not be addressing some abstract subject matter but that we talk about the lifeblood of our national aspirations—the fuel for our infrastructure, our education, our healthcare, and our security. That we should talk about the new rules of the game as it affects us as individual citizens and for every single business, from the multinational giant, headquartered in Lagos, to the innovative start-up in Aba. Whether we merely survive this change, or we thrive because of it, is solely dependent on how we collective navigate this new frontier.
4. Before delving into the subject matter proper, it is important to provide some context so that we don’t think the reform came out of the blues or that it was some kind of ego trip embarked upon by the government.
5. By the time President Tinubu took office, the economic debris of the nation had become too conspicuous to be ignored. N22.7 trillion had been printed and injected into the economy in the name of ways and means thereby destroying the value of the Naira in our pockets, also the dual exchange rate meant that some anointed people were making hundreds of millions of Naira off forex allocations from the CBN without producing any goods or offering any services whatsoever and tying our crude sales to foreign loans in the name of forward sales of crude was fast becoming the order of the day. Some of the foreign loans had been procured in order to help strengthen the Naira, a measure that could only be sustained by voodoo economics.
5. So from day one, it was very clear that something urgent, nay revolutionary must be done to prevent our economy from imploding. So the President’s job as an economic reformer began on day one. Every reformer knows that progress is not promised, it is always fought for. All that a reformer is bothered with is to do the right things, not to have all things under control. As a matter of fact, if everything seems under control, it is not only an indication that you are not going fast enough, you are most probably not a reformer.
6. As a tested democrat, Mr President knows that for our democracy to be worth its name, it must offer more than political and individual freedoms, it must offer economic choices which will lead to economic justice, most especially for the vulnerable who are least likely to recover from economic shocks.
7. In order to reform our obsolete tax laws, Mr President set up the Presidential Committee on Fiscal Policy & Tax Reform chaired by Prof Taiwo Oyedele. The committee came up with revolutionary reform proposals which will ultimately restructure laws, norms, and institutions to create a more just and equitable society. This involved a multifaceted approach of raising awareness, building support and overcoming resistance.
8. Reform efforts often face significant opposition from those who benefit from the status quo, requiring strategic planning, persistent advocacy, and coalition-building to overcome these obstacles. This was no exception. The opposition to the reform was fierce and furious almost foisting negative solidarity which could lead to a race to the bottom and collective decline where everyone is forced to endure worsening conditions because no one feels capable of improving them. While I want to avoid interrogating motives, at some point, it was clear that most of those opposed to the reform desired to see the President fail rather than succeed.
9. Therefore, they raised issues that even if true, were trivial. But as it related to the core goals of the reform, the issues were both trivial and untrue. It was clear that the opposition was primarily motivated by something sinister other than a collective benefit or shared ideal. Casting the President as dictatorial rather than being decisive was the high point of the opposition meant to scupper the reform. Thankfully, Mr President courageously held his line and refused to bulge.
10. For decades, our tax system had been a complex, sometimes contradictory, web of ordinances and Acts. It was a system where too few shouldered the burden of too many, where enforcement was inconsistent, and where informality was the norm, not the exception. The goals of this reform are ambitious and, frankly, necessary. Nigeria’s 2025 tax reform package is the most audacious overhaul of our fiscal framework in decades and in response to long-standing fragmentation in the country’s tax law and administration. The stated goals are to simplify the legal framework, broaden the tax base, strengthen compliance, and align selected rules with international tax practices.
11. The Presidential committee in its own words summarized the goal of the reforms thus: “they protect the poor, empower businesses, encourage investment, and ensure fairness across society. They strengthen Nigeria’s competitiveness, reduce inequality, and provide the government with the resources needed to invest in infrastructures, education, health, and security.” The reform forms part of a broader fiscal strategy that accompanies fuel subsidy removal and exchange-rate unification introduced by the President Bola Ahmed Tinubu’s Administration since 2023. I believe this is a vision we can all, in principle, support because a stronger Nigeria benefits us all.
12. This paper attempts to outline the key reforms, evaluate likely impacts on taxpayers (domestic and foreign), and provide practical guidance for businesses and advisors navigating the transition.
13. To navigate the tax reform, we need to know the changes so that, as taxpayers or tax administrators, we can optimize the benefits for ourselves and the nation at large. The reform replaced and consolidated 16 federal tax statutes into four principal Acts as itemized below:
(i) Nigeria Tax Act (NTA), 2025 which consolidated all income, transaction and instrument tax provisions into one;
(ii) Nigeria Tax Administration Act (NTAA), 2025 which modernized tax assessment, collection, dispute resolution and compliance rules;
(iii) Nigeria Revenue Service (Establishment) Act, 2025 which established a central federal revenue agency to simplify tax administration; and
(iv) Joint Revenue Board (Establishment) Act, 2025 which harmonized federal-state revenue sharing and coordination mechanisms.
14. The new provisions in Nigeria Tax Act (NTA), 2025 include the following:
(i) Consolidation of tax laws: Replaces multiple legacy statutes—including Companies Income Tax Act, Personal Income Tax Act, Petroleum Profits Tax Act, VAT Act, Capital Gains Tax Act, and Stamp Duties Act—with a unified, modern legislative framework.
(ii) Expanded tax base: Bring digital services, virtual currencies, prizes, honoraria, grants and awards, and FX gains into taxable income definitions. Levy (4%): Replaces multiple levies (TET, NASENI, IT, Police Trust Fund) with a single 4% levy on assessable profits
(iii) Minimum Effective Tax Rate (15%): Applies to large companies (turnover ≥ ₦50 billion or part of MNEs with global turnover ≥ €750 million). If actual tax falls short, a top-up tax applies.
(iv) Capital Gains Tax reforms: -Rate raised from 10% to 30% for companies.
-Now applies to indirect share transfers, including those via offshore structures.
-Broader asset categories (e.g. crypto, patents, FX gains) captured.
(v) Anti-avoidance:
• Top-up tax: Ensures global minimum effective taxation on profits of Nigerian parent companies.
•CFC rules: Taxes undistributed profits of controlled foreign companies.
(vi) Expanded nexus for non-resident companies (NRCs):
• Broadened Permanent Establishment and Significant Economic Presence definitions—including physical and service delivery footprints.
• Taxes profits, services, disposals even outside Nigeria if economically linked.
• Minimum tax for NRCs: either withholding tax or 4% flat on Nigeria-source income.
(vii) Personal Income Tax (PIT) enhancements: -Refined residency tests; residents taxed globally, non-residents taxed on Nigeria-sourced income.
• New taxable streams (e.g., digital gains, prizes).
• Defined valuation rules for benefits in kind.
• Rent relief and reduced exemptions realigned.
• Progressive rates up to 25%, with low-income thresholds clarified.
(viii) Research & Development (R&D):
• Deduction limited to 5% of turnover (down from 10% of profit).
• Interest deductibility: Now applies restrictions on all related parties, not just foreign ones.
• Collective investment schemes (e.g., mutual funds) now taxed under corporate tax regime.
• Reinsurance rules aligned with NAICOM recapitalization standards.
(ix) Several tax exemptions were granted under the NTA as hereunder:
• Companies with annual turnover ≤ ₦100 million and fixed assets ≤ ₦250 million are fully exempt from Company Income Tax (CIT), Capital Gains Tax (CGT), and 4% Development Levy.
• CGT Exemptions for Small Share Transfers for gains from share disposals where proceeds are under ₦150 million and the gain under ₦10 million within any 12-month period. Moreover, if proceeds are reinvested in other Nigerian company shares within the same assessment year, the gain is exempt—or taxed only proportionately when amounts exceed the reinvested portion.
• The previous Pioneer Status is replaced with an Economic Development Incentive (EDI) whereby eligible companies get a 5% tax credit per annum on qualifying capital expenditure for up to 5 years, with carry-forward provisions (extendable another 5 years).
• Entities operating in free zones, exporting 75% or more of their goods/services, are exempted from the minimum tax.
• A special relief for upstream oil sector operators grants them tax credits up to 20% of their annual tax liabilities, contingent on demonstrated cost-saving efficiencies. -Education materials, healthcare and medicines, and rent are exempted from VAT.
• Income exemption for individuals earning ₦800,000 or less annually are fully exempt from both Personal Income Tax (PIT) and Capital Gains Tax (CGT).
• Loss-of-Office/Compensation exemption for compensation received for loss of employment or personal injury is tax-exempt up to ₦50 million, up from the previous ₦10 million.
• Rent relief deduction for salaried individuals can now deduct rent up to ₦500,000 or 20% of annual rent paid – whichever is lower, provided actual rent is paid. -Homeowners are not eligible to pay VAT on rent received, as VAT is a consumption tax and payable by the tenant in the case of rent.
15. New provisions in Nigeria Tax Administration Act (NTAA), 2025 are as follows:
• Simplified Filing for Low-Income Earners. Individuals earning ₦5 million or less solely from salary and allowances may qualify for simplified (automatic) tax filing procedures.
• A unified Taxpayer Identification Number (UTIN/TIN) is now mandatory for all taxable individuals, standardizing taxpayer identity across income types.
• For businesses exceeding small-company thresholds, the CIT rate is reduced from 30% to 25%.
• Electronic fiscal systems (e-invoicing, real-time VAT transmission) have been introduced to enable digital enforcement.
• VAT regime has heavily promoted; non-compliance triggers steep penalties (e.g., N1 million and higher).
• Virtual Asset Service Providers (VASPs) must report crypto/digital asset transactions and adhere to KYC rules.
• Non-compliance risks license suspension and penalties up to N10 million for first month + N1 million per subsequent month.
• Tax Ombudsman Office established to handle disputes, complaints, and ensure fair tax governance.
• Tax reports and refund mechanisms now bound by timelines (e.g., validated refunds processed within 90 days). Standardized dispute and filing processes now introduced.
16. The Nigeria Revenue Service (Establishment) Act, 2025 has the following new provisions:
• Establishes the Nigeria Revenue Service (NRS) replacing the FIRS, as a centralized federal revenue agency.
• NRS has been given expanded authority, with powers to collect and administer taxes on a wider scale.
• NRS to assist other government levels (federal, state, local) in tax collection.
• To ensure transparency, NRS must conduct annual audits within six months of fiscal year-end and submit quarterly and annual activity reports, including audited accounts, to the National Assembly.
• NRS authorized to retain 4% of total revenue collected (excluding petroleum royalty) for funding its operations, subject to appropriation by the National Assembly.
17. Finally, under the Joint Revenue Board (Establishment) Act, 2025 the following new provisions were made:
• Joint Revenue Board to coordinate revenue sharing and tax administration between federal and state governments.
• Tax Appeal Tribunal and Office of the Tax Ombudsman established under this framework to harmonize dispute resolution and ensure coordinated tax governance.
18. The NTA and NTAA will commence on 1st January, 2026 while the NRSEA and JRBEA have a commencement date of 26 June 2025 to ensure readiness of the relevant institutions ahead of full implementation in 2026.
19. As we begin to wind up, it is important to talk about matters arising regarding the 5% fuel surcharge in the new tax laws. Most of us in the audience, having reported legislative activities for decades know that surcharge is not a new tax introduced by the current administration. The provision already exists under the Federal Roads Maintenance Agency Act, 2007 as amended. Government has said that it is restated in the new Tax Act just for harmonisation and transparency rather than for immediate implementation.
20. It is also important to underpin the fact that the surcharge will not apply to all fuel products. Several energy products used by households are exempt. These include household kerosene, cooking gas (LPG), and compressed natural gas (CNG). Clean and renewable energy products are also excluded to align with Nigeria’s energy transition agenda. It is also not true that the surcharge will automatically commence in January 2026 when the new tax laws come into effect as wildly claimed by some bad faith commentators.
21. It will only commence when the Minister of Finance issues an Order published in the Official Gazette as stated under Chapter 7 of the Nigeria Tax Act, 2025. This safeguard eliminates the possibility of any recklessness on the part of any key player and ensures careful consideration of timing and economic conditions of the citizens before implementation. This practice is virtually universal with over 150 countries across the globe imposing various charges ranging from 20% to 80% of fuel products to guarantee regular investment in road infrastructures.
22. No doubt, the NTAA, 2025 mandates the use of Tax Identification Numbers (Tax ID) for certain transactions. Understandably, many Nigerians have questions about what this means for banking, businesses, and everyday life. Section 4 of the NTAA requires all taxable persons to register with the tax authority and obtain a Tax ID. A “taxable person” is someone who carries on trade, business, or other economic activity to earn income. Banks and other financial institutions are required to request a Tax ID from taxable persons. But individuals who do not earn income and do not fall within the definition of taxable persons are not required to obtain a Tax ID. That being the case, it is now a requirement of law that every taxable person including artificial persons must obtain a tax ID before opening or continuing to operate a bank account in Nigeria.
23. The authorities have explained that Tax ID” is a term that unifies the different TINs issued by the Federal Inland Revenue Service (FIRS), Joint Tax Board (JTB), and State IRS. Ultimately, your NIN (for individuals) and CAC RC number (for companies) will serve as your Tax ID, reducing duplication and simplifying compliance. Some of us here know that this is not a new policy as mischievously claimed in some quarters. It has been in place since the Finance Act, 2019, which amended section 49 of the Personal Income Tax Act. Since January, 2020, individuals opening a business account have been required to provide a Tax Identification Number (TIN). The NTAA only strengthens and harmonises this requirement.
24. All businesses, Nigerians in diaspora, foreign companies and non-resident entities doing business in Nigeria and all government owned enterprises and agencies must register for tax and obtain a tax ID. Section 5 of the NTAA is explicitly clear on this.
Challenges:
• The Challenge of Uncertainty: New rules bring new interpretations. How will this play out in practice? What will be the stance of the newly empowered NRS?
• The Challenge of Technology: The drive towards full digitalization—from e-invoicing to automated tax filings—is a double-edged sword. It promises efficiency but demands a significant upgrade in our own digital capabilities and cyber security.
• The Challenge of Capacity: Do we have the skilled tax professionals, both within our businesses and within the government, to manage this transition smoothly?
• The Challenge of Cost: In the short term, compliance may cost more. It requires investment in new software, new training, and new advisory services.
25. Ladies and gentlemen, tax reform is not a punishment. It is a pact. On our part as citizens we must accept that this reform is more than a policy change; it is a national conversation. It is us telling ourselves that we are ready to build the Nigeria we deserve. Therefore, from the market stalls of Kano/Onitsha to the corporate hubs of Lagos, let every legitimate enterprise become a thread in the strong fabric of our national revenue.
26. The government must also understand that true tax reform is not about raising rates, but about raising trust. It is the covenant between a government’s promise and a people’s prosperity. This is because transparency is the engine of compliance. When citizens can see where their Naira goes, they are proud to give it. For it was not in vain that Lester B. Pearson, former Prime Minister of Canada reminded us that, “the best way to teach people to pay their taxes is to let them see what they get for it.”
27. Let this reform be a pact between the government and the private sector—a promise that if we contribute diligently, the government will deploy those resources responsibly to build the roads we drive on, power the industries we run, built world class hospitals for us and educate the talent we hire. The waters ahead may be uncharted, but the destination is clear: a self-reliant, economically vibrant, and globally competitive Nigeria
28. In conclusion, the Nigeria Tax Act, 2025 represents a structural shift toward a modernized, consolidated tax system aligned with international standards. While it promises greater clarity and potentially higher revenue mobilization, its success depends on predictable implementation, detailed regulations, and meaningful investments in administrative capacity and taxpayer readiness. Businesses and advisors should act now to map exposures, upgrade systems, and engage constructively with the new tax administration. Taxpayers and tax administrators must understand the new provisions so as to take advantage of the benefits they portend for them and the nation at large.
29. Let me end by calling on Mr President to ensure that he takes no prisoners in ensuring that this reform is implemented and sustained. This is a legacy that would impact generations after us and cement President Tinubu’s place in Nigeria’s history as the undisputed most consequential economic reformer of our time.
30. May we embrace this reform to build not just successful businesses, but a successful nation.
31. Thank you for your kind attention.
32. May God bless the Federal Republic of Nigeria.
Rt. Hon Yakubu Dogara, CFR
Speaker of the 8th Assembly/Chairman NCGC Board.
NAVIGATING TAX REFORM IN NIGERIA: INSIGHTS 0N PRESIDENT TINUBU’S POLICIES BEING TEXT OF THE MAIDEN DISTINGUISHED PARLIAMENTARIAN LECTURE DELIVERED BY RT HON YAKUBU DOGARA CFR, AT MEETING ROOM 028, NEW WING, HOUSE OF REPRESENTATIVES BUILDING, NASS COMPLEX, THREE ARMS ZONE, ABUJA, ORGANISED BY HOUSE OF REPRESENTATIVES PRESS CORPS
