The Nigeria President, Bola Ahmed Tinubu, has signed four (4) tax reform bills into law today on Thursday 26, 2025. The four tax reform bills are:
- The Nigeria Tax Bill (Ease of Doing Business)
- The Nigeria Tax Administration Bill
- The Nigeria Revenue Service (Establishment) Bill
- The Joint Revenue Board (Establishment) Bill
These four tax reform bills are expected to transform Nigeria’s fiscal and revenue framework. Here's how the tax reform bills will work when they are fully swang into actions today.
1. The Nigeria Tax Bill (Ease of Doing Business)
The Nigeria Tax Bill will organize Nigeria's complex tax system into single or unified statute. After the bill is signed, it'll consolidate various tax laws into a unified statute, making it easy for businesses and individuals to comply with tax regulations.
This reform bill will also help in reducing the number of taxes and eliminating overlaps, making it easier for both businesses and individuals to understand and meet their tax obligations.
So, by consolidating and creating a clearer and more predictable tax framework using the Nigeria tax bill's ease of doing business, businesses and entrepreneurs can actually experience the ease of doing business, get lower tax compliance costs, and boost a more stable and business-friendly fiscal environment in Nigeria.
2. The Nigeria Tax Administration Bill
The Nigeria Tax Administration Bill is the second tax reform bill that'll be passed into law today by President Bola Tinubu. This tax reform bill will create a single, clear set of rules for how taxes are managed and collected across all levels of government in Nigeria—federal, state, and local.
This means everyone will follow the same guidelines; no one has to do it differently again. This will make the tax process more easier than before, more consistent, and easier to understand for both tax officials and taxpayers.
3. The Nigeria Revenue Service (Establishment) Bill
The Nigeria Revenue Service (Establishment) Bill is the third tax reform bill that'll be passed into law today by the Nigerian president. The tax reform law will replace the current law governing the Federal Inland Revenue Service (FIRs) and create a new, more independent agency called the Nigeria Revenue Service (NRS).
This agency will handle not only taxes but also other types of government revenue. The bill is aimed to set clear rules to make the NRS transparent, accountable, and efficient, which are necessary to showcase how it works better and serves Nigerians more effectively.
4. The Joint Revenue Board (Establishment) Bill
The Joint Revenue Board (Establishment) Bill is the fourth tax reform bill that'll be rolled out today in Nigeria. This bill sets up an official system to help tax agencies at the federal, state, and local levels work together smoothly.
The Establishment Bill will create a clear structure for cooperation and includes oversight tools like a Tax Appeal Tribunal, where people can challenge tax decisions, and an Office of the Tax Ombudsman, which will handle complaints and ensure fairness in tax matters.
Key Changes Introduced by the Four Tax Reform Bills in Nigeria
- VAT and Corporate Tax Rates Unchanged: VAT remains at 7.5%, and corporate income tax stays at 30%.
- Simplified Company Categories: Small company revenue threshold increased, with a new fixed asset criterion; medium-sized companies no longer recognized.
- VAT Recovery Enhanced: Businesses can recover VAT on all purchases, including services, reducing VAT payable but increasing corporate tax due.
- New Development Levy: 4% levy replaces Tertiary Education Tax and other levies, simplifying compliance.
- Personal Income Tax Adjustments: Tax exemptions for minimum wage earners; progressive tax increases for incomes above NGN50 million.
- Minimum Tax Changes: 0.5% turnover tax eliminated for companies with no taxable profits; additional tax for companies above a revenue threshold (e.g., NGN20 billion) if effective tax rate is below 15%.
- Multinational Tax Rules: Entities of multinational enterprises with a set group turnover pay top-up tax if effective tax rate is below 15%.
- Capital Gains Tax Aligned: Taxed at the same rate as corporate profits (30%), up from 10%.
- Digital Tax Processes: Increased use of technology like VAT fiscalization, e-invoicing, and National Single Window for better tax authority oversight.
- Stricter Tax Incentives: Tougher conditions for businesses in export processing zones selling to the customs territory.
- Stamp Duties Overhaul: Clearer rules on instruments liable for stamp duty and responsible parties.
- Non-Compliant Expenses Disallowed: Expenses and assets without VAT/import duty payments no longer qualify as deductible.
- New Penalties: Stricter penalties introduced to boost compliance and tax collection.
- Upstream Allowance Change: Removal of 1% retention requirement for upstream companies’ capital expenditure allowances.
- Pioneer Status Replaced: New economic development tax incentive with stronger oversight.
- Tax Dispute Mechanisms: Introduction of Tax Ombud for mediation and reestablished Tax Appeal Tribunal for all tax disputes.
More Information About the Four Tax Reform Bills
To me, these tax reform bills will change how taxes are handled in Nigeria; it'll make the Nigerian's tax system more organized, fair (no partial or corrupt acts), and responsive to taxpayers' needs.
According to a statement regarding the tax reform bills signed on Wednesday by Special Adviser to the President on Information and Strategy, Bayo Onanuga, when these new tax reform laws become effective in Nigeria, they will improve how taxes are handled in the country to boost economic system and ease processes for businesses and individuals.
The changes/reforms will make it easier for businesses to operate by simplifying tax processes, which should attract more local and foreign investors. Furthermore, and as seen in the explanation of the four tax reform bills above, the streamlined tax system will also help the government collect more revenue efficiently which will definitely help the economic growth and development.
However, the bills have brought debate and skepticism across different Nigerian regions. It's worth noting that some northern Governors rejected these tax reform bills in December 2024, calling them anti-democratic.
In response to this, the country’s top economic advisory body, the National Economic Council (NEC), asked for the bills to be withdrawn from the National Assembly for further discussions to address concerns and include more diverse perspectives.
Despite all these challenges, the bills were refined and passed. The signing of the four tax reform bills will take place at the Presidential Villa in Abuja. Key government figures like the Senate President, Speaker of the House, leaders of the National Assembly, the Governors Forum Chairman, Minister of Finance, and Attorney General will attend the event.
