๐๐ญ๐๐ฒ ๐๐ง๐๐จ๐ซ๐ฆ๐๐, ๐๐ญ๐๐ฒ ๐๐ก๐๐๐!
Get regular updates on Nigeriaโs fiscal policy and tax reforms, and information on the activities of the Presidential Fiscal Policy and Tax Reforms Committee.
๐๐๐๐ง ๐ญ๐ก๐ ๐๐ ๐๐จ๐๐ or click the link below ๐ญ๐จ ๐ฃ๐จ๐ข๐ง ๐จ๐ฎ๐ซ ๐จ๐๐๐ข๐๐ข๐๐ฅ ๐๐ก๐๐ญ๐ฌ๐๐ฉ๐ฉ ๐๐ก๐๐ง๐ง๐๐ฅ and be part of the conversation shaping Nigeriaโs fiscal future.
https://t.co/uolMhxP8ld
#FiscalReforms #TaxReforms #Nigeria #PFPTRC #PublicFinance #EconomicGrowth
๐๐ง๐ ๐๐ ๐๐ฆ๐๐ง๐ญ๐ฌ ๐ฐ๐ข๐ญ๐ก ๐๐ฅ๐จ๐๐๐ฅ ๐๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ๐ฌ ๐ข๐ง ๐๐๐ซ๐ข๐ฌ
"We will not bring back fuel subsidy because it creates distortions for the economy, and we won't introduce price control because we believe in the market... the situation in Iran presents new opportunities for us as the world looks to diversify sources of energy and invest in new markets."
"Nigeria recorded a strong GDP growth rate of 11.2% in US dollar terms in 2025 reinforcing the country's ambition to achieve a $1 trillion economy by 2030."
-๐๐ข๐ช๐ธ๐ฐ ๐๐บ๐ฆ๐ฅ๐ฆ๐ญ๐ฆ, ๐๐ช๐ฏ๐ช๐ด๐ต๐ฆ๐ณ ๐ฐ๐ง ๐๐ช๐ฏ๐ข๐ฏ๐ค๐ฆ ๐ข๐ฏ๐ฅ ๐๐ฐ๐ฐ๐ณ๐ฅ๐ช๐ฏ๐ข๐ต๐ช๐ฏ๐จ ๐๐ช๐ฏ๐ช๐ด๐ต๐ฆ๐ณ ๐ฐ๐ง ๐ต๐ฉ๐ฆ ๐๐ค๐ฐ๐ฏ๐ฐ๐ฎ๐บ
FEDERAL MINISTRY OF FINANCE PRESS STATEMENT
FALSE ALLEGATION OF HIDDEN SPENDING AND DIVERSION OF FEDERATION REVENUE
The attention of the Federal Ministry of Finance has been drawn to recent media reports and commentaries that misrepresent the findings of the latest Nigeria Development Update by the World Bank, particularly claims suggesting that a significant portion of federation earnings is being โdivertedโ or constitutes โhidden spending.โ
These interpretations misrepresent the World Bankโs analysis and reflect a misunderstanding of the fiscal system.
MISINTERPRETATION OF FAAC DEDUCTIONS
The misreporting in question incorrectly characterises Federation Account Allocation Committee (FAAC) deductions as โwasteโ or missing funds. This is incorrect.
FAAC deductions, as presented in the World Bank report, include:
Statutory transfers,
Savings and investments,
Security-related expenditures,
Cost-of-collection charges,
Refunds to Ministries, Departments and Agencies (MDAs),
Transfers and interventions benefiting subnational governments.
It is important to emphasise that refunds and transfers to states and other tiers of government are not leakages. They represent legitimate fiscal flows, including repayments of obligations and statutorily backed allocations.
SELECTIVE USE OF OUTDATED DATA
Some commentaries selectively relied on past data while ignoring the forward-looking analysis and ongoing public financial management reforms highlighted in the report.
The World Bank explicitly notes that reforms implemented in early 2026, including the recently signed Executive Order to safeguard remittance of petroleum revenues, are already addressing concerns around deductions, and are expected to improve transparency while increasing revenues available to all tiers of government by about 0.4% of GDP annually.
Misinterpreting one aspect of the analysis without acknowledging the progressive reforms and measures already introduced to enhance distributable federation revenues gives a distorted picture.
STRONGER MACROECONOMIC FUNDAMENTALS
The broader message of the World Bank report is positive and forward-looking:
Economic growth is becoming more broad-based across sectors.
Inflation, while still elevated, is declining due to deliberate policy actions.
Nigeriaโs external position has strengthened significantly, with improved reserves and a current account surplus.
Debt indicators have improved, including a decline in the debt-to-GDP ratio, the first in over a decade.
These developments reflect the outcomes of the current administration's ongoing macroeconomic policies and public financial management reforms.
THE REAL MESSAGE OF THE REPORT
The World Bank does not conclude that Nigeriaโs fiscal system is collapsing or that reforms have failed. Rather, it states that reforms are working, and they must be sustained and deepened to translate macroeconomic gains into inclusive growth.
CONCLUSION
The Federal Government remains committed to strengthening fiscal transparency, improving revenue mobilisation, ensuring efficient public spending, and deepening reforms to support inclusive economic growth.
An accurate understanding and responsible reporting of fiscal information are critical to maintaining confidence in Nigeriaโs reform trajectory and economic outlook.
We urge stakeholders, media organisations, and the public to engage constructively with fiscal information and avoid twisted interpretations that may undermine reform efforts and fuel public discord.
Signed
Taiwo Oyedele
Honourable Minister of State for Finance,
Federal Republic of Nigeria
April 19, 2026
โ๐ ๐๐๐ ๐๐๐๐ ๐๐๐๐๐:ย โ๐๐๐๐๐ ๐๐๐๐๐๐๐ ๐ ๐๐๐๐๐๐ ๐๐๐๐๐๐ ๐๐๐๐๐๐ ๐๐ ๐๐๐ ๐๐๐ ๐๐๐ ๐๐๐๐โ
ย
Our attention has been drawn to misleading media reports claiming that the Honourable Minister of State for Finance, Mr. Taiwo Oyedele has "finally admitted errors in the new tax laws." These publications misrepresent the Minister's statements, falsely alleging that he urged Nigerians to await the outcome of a "legislative probe", a process that has long been concluded and the gazetted copies certified by the National Assembly published since early January 2026.
ย
This twisted narrative is unhelpful as it risks distorting public understanding and misleading the very people the reforms were designed to benefit.
ย
The Minister, during a recent fireside chat at the NBA SLP conference in Lagos, highlighted the early positive impact of the new tax laws, including thousands of informal businesses now seeking CAC registration daily while the number of individuals registered for tax purposes nationwide has increased from barely 10 million before the reform to over 100 million.
ย
These impressive results stem from the robust design and progressive nature of the new laws, which include:
- Exemption of small companies from tax.
- Increased exemption thresholds for low-income earners.
- Tax exemptions on basic consumption items like food, education, healthcare, transportation, and rent.
- Introduction of the Tax Ombud to protect taxpayer right.
ย
The Minister contrasted the transformative changes in the new laws with the regressive provisions in the old laws. He however emphasised that no law is perfect. Therefore, ongoing stakeholder engagement is essential to identify and address any errors or gaps for appropriate legislative updates through Finance Bills as part of a continuous improvement process.
ย
We urge members of the public to disregard sensational headlines and twisted narratives and rely exclusively on official sources and credible media organisations for accurate information regarding the tax reform and other government policies.
ย
God bless Nigeria!
-๐ท๐๐๐๐๐ ๐๐๐๐๐๐ ๐ญ๐๐๐๐๐ ๐ท๐๐๐๐๐ & ๐ป๐๐ ๐น๐๐๐๐๐๐ ๐ช๐๐๐๐๐๐๐๐
Enforcement of Tax Law Wonโt Be Random, Says Taiwo Oyedele
Minister of State for Finance, Taiwo Oyedele, assured that enforcing Nigeriaโs new tax laws will not be arbitrary, emphasizing that reforms are rooted in clear policy intent, transparency, and fairness.
Speaking during a fireside chat at the 2026 Annual Conference of the Nigerian Bar Association Section on Legal Practice, the theme was: โFrom Policy to Practice: Making Sense of Nigeriaโs New Tax Reforms.โ
Oyedele stressed the importance of understanding the rationale behind tax laws rather than focusing solely on their provisions.
According to him, many professionals often overlook the underlying purpose of tax legislation, noting that policy intent should guide both interpretation and implementation.
Oyedele highlighted inconsistencies in Nigeriaโs previous tax regime, particularly the disparity between personal and corporate tax burdens, which discouraged business formalisation.
โUnder the old system, an individual could pay an effective tax rate of about 19 per cent, but registering the same business as a company pushed the burden above 40 per cent. This was the opposite of global best practice,โ he said.
He explained that the reform process prioritised creating incentives for businesses to formalise, while ensuring policy consistency and reducing discretion in tax administration.
Reflecting on past challenges, Oyedele recounted instances where policy inconsistencies discouraged foreign investment, including abrupt proposals to significantly increase taxes on gas companies.
โIf policies can change overnight, it sends the wrong signal to investors. Consistency is critical,โ he noted.
On inclusivity, Oyedele said the new tax framework deliberately protects low-income earners and small businesses.
He revealed that individuals earning around โฆ1 million annually and a large portion of small businesses, estimated at 30 to 40 million, have limited capacity to pay taxes and are therefore shielded under the reforms.
โNearly half of working Nigerians earn less than โฆ70,000 monthly. Taxing them aggressively would be unjust,โ he said.
The reforms also eliminate practices such as minimum tax payments on loss-making businesses, which he described as effectively taxing capital rather than profit.
Oyedele noted that essential goods and services, including food, education, and healthcare, have been exempted from Value Added Tax (VAT), making the system more progressive.
He further explained that the reforms consolidated multiple tax laws into four major pieces of legislation, including the Nigeria Tax Act and the Nigeria Tax Administration Act, aimed at simplifying compliance and improving coordination among tax authorities.
Addressing concerns about discrepancies in the law-making process, Oyedele acknowledged that errors occurred due to manual processes and multiple stages of review.
He said steps are underway to correct identified issues through a proposed finance bill.
โWhat we need is a more transparent and reliable legislative process where every version of a law is publicly available,โ he stated.
Oyedele also underscored the critical role of legal practitioners in shaping economic outcomes through tax advisory and compliance.
โThe decisions lawyers help businesses make will determine investment, job creation, and revenue generation,โ he said.
While acknowledging improvements in public revenue utilisation, he called for greater impact and efficiency, noting that Nigeria still lags behind countries like South Africa in tax collection.
โIf we improve collection, we can significantly increase funding for infrastructure, education, and healthcare,โ he added.
He urged lawyers to focus on effective implementation, stressing that the success of the reforms ultimately depends on how well they are applied in practice.
Honouring Excellence in Public Finance ๐ณ๐ฌ
Over the weekend, the Honourable Minister of State for Finance @taiwoyedele was hosted to a distinguished dinner reception by the Association of Chartered Certified Accountants (ACCA) Nigeria, a globally recognised professional body for accountants.
An evening of meaningful engagements, shared vision, and continued collaboration towards strengthening Nigeriaโs economic and fiscal future.
Footage credit: Arise News
#ACCA #PublicFinance #Leadership #Nigeria #FiscalPolicy #EconomicDevelopment #TaxReforms
Today, I had the honour of being sworn in as Minister of State for Finance of the Federal Republic of Nigeria.
I am sincerely grateful to President Bola Ahmed Tinubu, GCFR, for the trust and confidence placed in me, and to the Senate for confirming my nomination.
This appointment is not merely a personal milestone; it is a call to greater service. Nigeria faces important fiscal challenges, but also immense opportunities. The decisions we make in public finance today will shape the prosperity, stability, and well-being of our country for generations to come.
In my new role, I will focus on supporting efforts to strengthen revenue mobilisation, promote fiscal discipline, and ensure that public resources translate into real improvements in the lives of Nigerians.
I look forward to working more closely with the Honourable Minister of Finance and Coordinating Minister of the Economy, colleagues across government, the National Assembly, private sector, and development partners to advance the mission of financing Nigeria for sustainable development.
Public service demands integrity, humility, and dedication. I step into this responsibility with a deep sense of duty and commitment to Nigeria and the Nigerian people.
Thank you to everyone who has supported and encouraged me along this journey. I will be counting on your continued support.
The work begins. God bless Nigeria.
#MinistryofFinance #FiscalReform #Nigeria #SustainableDevelopment
๐๐ฅ๐๐ซ๐ข๐๐ข๐๐๐ญ๐ข๐จ๐ง: ๐๐ก๐ ๐๐ข๐ ๐๐ซ๐ข๐ ๐๐๐ฑ ๐๐๐ญ 2025 ๐ก๐๐ฌ ๐๐จ๐ฆ๐ฆ๐๐ง๐๐๐ ๐๐ง๐ ๐๐จ๐๐ฌ ๐๐๐ ๐๐ฆ๐ฉ๐จ๐ฌ๐ ๐ 25% ๐๐๐ฑ ๐จ๐ง ๐๐ฎ๐ข๐ฅ๐๐ข๐ง๐ ๐๐๐ญ๐๐ซ๐ข๐๐ฅ๐ฌ ๐จ๐ซ ๐ ๐ฎ๐ง๐๐ฌ
We are aware of a recent video claiming that the new tax laws will commence in 2027 and alleging the imposition of a 25% tax on funds for building materials and other transactions.
Both claims are incorrect. Contrary to the misinformation seeking to create fear, panic and disaffection, the Nigeria Tax Act 2025 has already commenced and does not impose a 25% tax on construction funds, bank balances, or business expenses. Instead, it contains provisions specifically designed to reduce the cost of housing, rent and real estate development.
๐๐๐ฒ ๐๐ซ๐จ๐ฏ๐ข๐ฌ๐ข๐จ๐ง๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐ข๐ ๐๐ซ๐ข๐ ๐๐๐ฑ ๐๐๐ญ, 2025
Relevant provisions to make housing more affordable, encourage real estate development, and support small business property contractors and low-income renters include:
1. ๐ณ๐๐๐๐ ๐ช๐๐๐ ๐๐ ๐ฉ๐๐๐๐ ๐๐๐ ๐๐๐ ๐ท๐๐๐๐๐๐๐ ๐ซ๐๐๐๐๐๐๐๐๐๐
๐๐๐ ๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ ๐ฐ๐ฏ ๐๐ข๐ฏ๐ฅ ๐ข๐ฏ๐ฅ ๐๐ถ๐ช๐ญ๐ฅ๐ช๐ฏ๐จ๐ด (๐.185(๐ญ)): Land and buildings are now specifically exempt from Value Added Tax (VAT).
๐๐ฏ๐ฑ๐ถ๐ต ๐๐๐ ๐๐ณ๐ฆ๐ฅ๐ช๐ต๐ด ๐ง๐ฐ๐ณ ๐๐ฐ๐ฏ๐ต๐ณ๐ข๐ค๐ต๐ฐ๐ณ๐ด: Where VAT is chargeable on any materials or service, contractors can now recover VAT on their assets and overhead costs, which lowers overall construction costs.
๐๐ฆ๐ฅ๐ถ๐ค๐ฆ๐ฅ ๐๐ช๐ต๐ฉ๐ฉ๐ฐ๐ญ๐ฅ๐ช๐ฏ๐จ ๐๐ข๐น (๐๐๐): A lower 2% WHT rate is applicable on construction contracts, helping to conserve cash flow and reduce financing pressure on developers.
๐๐ฐ๐ข๐ฏ ๐๐ฏ๐ต๐ฆ๐ณ๐ฆ๐ด๐ต ๐๐ฆ๐ฅ๐ถ๐ค๐ต๐ช๐ฐ๐ฏ (๐.30(2)(๐ช๐ท)): Mortgage interest is tax-deductible for individuals developing an owner-occupied residential house.
๐๐ฆ๐ฅ๐ถ๐ค๐ต๐ช๐ฃ๐ญ๐ฆ ๐๐ฆ๐ฏ๐ต๐ข๐ญ ๐๐น๐ฑ๐ฆ๐ฏ๐ด๐ฆ๐ด (๐.20): Property owners who earn rental income can deduct related costs such as repairs, insurance, and agency fees.
2. ๐ซ๐๐๐๐๐ ๐น๐๐๐๐๐ ๐๐๐ ๐น๐๐๐๐๐๐ ๐๐๐ ๐ป๐๐๐๐๐๐
๐๐ฆ๐ฏ๐ต ๐๐ฆ๐ญ๐ช๐ฆ๐ง (๐.30(2)(๐ท๐ช)): Individuals can claim relief up to โฆ500,000 (20% of annual rent), increasing disposable income for low-income earners.
๐๐๐ ๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ ๐ฐ๐ฏ ๐๐ฆ๐ฏ๐ต (๐.185(๐ญ)): The VAT exemption on land and buildings also covers rent which is fully exempt from Value Added Tax.
๐๐ต๐ข๐ฎ๐ฑ ๐๐ถ๐ต๐บ ๐๐ฆ๐ญ๐ช๐ฆ๐ง (๐.134): Lease agreements with an annual value below โฆ10,000,000 (or 10 times the annual minimum wage) are exempt from stamp duty.
3. ๐ฐ๐๐๐๐๐๐๐๐๐ ๐๐๐ ๐ฐ๐๐๐๐๐๐๐๐ ๐๐๐ ๐ซ๐๐๐๐๐๐๐๐๐
๐๐ข๐ฑ๐ช๐ต๐ข๐ญ ๐๐ข๐ช๐ฏ๐ด ๐๐ข๐น ๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ (๐.51(1)): Individuals pay no Capital Gains Tax (CGT) when disposing of a dwelling house or an interest in one.
๐๐๐๐ ๐๐ฏ๐ค๐ฆ๐ฏ๐ต๐ช๐ท๐ฆ๐ด (๐.162(๐ค)): Real Estate Investment Trusts (REITs) are exempt from Companies Income Tax (CIT) when distributing at least 75% of their dividend or rental income within 12 months after the financial year-end.
๐๐ณ๐ช๐ฐ๐ณ๐ช๐ต๐บ ๐๐ฆ๐ค๐ต๐ฐ๐ณ ๐๐ฏ๐ค๐ฆ๐ฏ๐ต๐ช๐ท๐ฆ๐ด: Manufacturing of building materials such as iron, steel, and domestic appliances qualifies for specific tax exemption under the economic development incentive scheme for up to 10 years.
๐๐ฆ๐ฅ๐ถ๐ค๐ฆ๐ฅ ๐๐ฐ๐ณ๐ฑ๐ฐ๐ณ๐ข๐ต๐ฆ ๐๐ข๐น ๐๐ข๐ต๐ฆ (๐.56): Scope for the reduction of companies income tax rate for large businesses from 30% to 25%.
4. ๐ท๐๐๐๐๐๐๐๐๐ ๐๐๐ ๐พ๐๐๐๐๐๐ ๐๐๐ ๐บ๐๐๐๐ ๐ฉ๐๐๐๐๐๐๐๐๐
โข ๐๐ข๐ฑ ๐ฐ๐ฏ ๐๐ฐ๐ถ๐ด๐ช๐ฏ๐จ ๐๐ฆ๐ฏ๐ฆ๐ง๐ช๐ต ๐๐ข๐น (๐.14(6)): The taxable value of employer-provided accommodation is limited to the annual rental value, subject to a maximum of 20% of the employee's annual gross employment income, excluding the rental value.
โข ๐๐ฎ๐ข๐ญ๐ญ ๐๐ฐ๐ฎ๐ฑ๐ข๐ฏ๐บ ๐๐ฆ๐ญ๐ช๐ฆ๐ง: Suppliers and contractors who qualify as small companies benefit from 0% Companies Income Tax (CIT), exemption from charging VAT and no deduction of Withholding Tax (WHT) from their invoices and payments.
5. ๐พ๐๐๐ ๐๐ ๐ต๐ถ๐ป ๐๐ ๐๐๐ ๐ป๐๐ ๐ณ๐๐
The Act does not:
โข Tax money in bank accounts or bank balances.
โข Tax transfers for buying building materials.
โข Introduce a 25% construction or business cost tax.
โข Delay implementation until 2027.
๐๐จ๐ง๐๐ฅ๐ฎ๐ฌ๐ข๐จ๐ง:
Claims suggesting a new tax on building materials or bank funds are false and misrepresent the law. Rather, the new tax law specifically introduced measures to make housing more affordable, promote real estate development, incentivise manufacturing of building materials, and grant rent reliefs to tenants to enhance their disposable income.ย
๐ ๐๐๐๐ ๐๐๐๐:ย
โFact Not Fearโ, evidence beats emotion. If anyone makes an alarming claim or tries to misinform you, ask them โWhere is it in the law?โ
With the new tax laws, housing should become more affordable and rent should go down NOT up!ย
โ ๐๐ณ๐ฆ๐ด๐ช๐ฅ๐ฆ๐ฏ๐ต๐ช๐ข๐ญ ๐๐ช๐ด๐ค๐ข๐ญ ๐๐ฐ๐ญ๐ช๐ค๐บ ๐ข๐ฏ๐ฅ ๐๐ข๐น ๐๐ฆ๐ง๐ฐ๐ณ๐ฎ๐ด ๐๐ฐ๐ฎ๐ฎ๐ช๐ต๐ต๐ฆ๐ฆ
๐๐๐ฑ ๐๐๐๐จ๐ซ๐ฆ ๐๐ซ๐๐ข๐ง๐ข๐ง๐ ๐๐จ๐ซ ๐๐ซ๐จ๐๐๐ฌ๐ฌ๐ข๐จ๐ง๐๐ฅ๐ฌ
We are pleased to announce that over 11,000 professionals registered for our Train-The-Trainer Programme, and we have successfully completed Module 1 of the training.
Participants are now invited to join the next sessions under Module 2:
Date: Wednesday, 11 February 2026
Time: 5:00 PM โ 7:30 PM
This training is designed to equip participants with the knowledge and practical tools required for effective implementation, efficient compliance, and optimisation of the benefits of the new tax reforms.
Who Should Attend:
Tax professionals, accountants, lawyers, economists, academics, finance managers, compliance officers, revenue administrators, legal advisers, policy analysts, and consultants involved in tax compliance, analysis, and advisory services.
Link for Registration & Other Details:
https://t.co/d8FjbQfk2p
We look forward to your participation.
- ๐ท๐๐๐๐๐ ๐๐๐๐๐๐ ๐ญ๐๐๐๐๐ ๐ท๐๐๐๐๐ ๐๐๐ ๐ป๐๐ ๐น๐๐๐๐๐๐ ๐ช๐๐๐๐๐๐๐๐
๐๐๐ฑ ๐๐๐๐จ๐ซ๐ฆ ๐๐ฆ๐ฉ๐ฅ๐๐ฆ๐๐ง๐ญ๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐๐ ๐๐ฆ๐๐ง๐ญ ๐ฐ๐ข๐ญ๐ก ๐๐ ๐๐ง๐ ๐๐๐ฒ๐ซ๐จ๐ฅ๐ฅ ๐๐ซ๐จ๐๐๐ฌ๐ฌ๐ข๐จ๐ง๐๐ฅ๐ฌ
We recently hosted an engagement sesion on the implementation of the Tax Reform Acts for HR, Payroll, CFOs and Tax Managers, in collaboration with the Joint Revenue Board (JRB).
We thank the nearly 15,000 people that registered for the session. For those who could not join us live due to the virtual webinar capacity limitation, we have provided the full session recording below.
๐๐๐ฒ ๐๐๐ฌ๐ฌ๐ข๐จ๐ง ๐๐ข๐ ๐ก๐ฅ๐ข๐ ๐ก๐ญ๐ฌ
๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ ๐ง๐ฐ๐ณ ๐ฎ๐ข๐ฏ๐บ ๐ธ๐ฐ๐ณ๐ฌ๐ฆ๐ณ๐ด: The new laws protect low-income earners with automatic exemption for anyone earning the national minimum wage or less. Where deductible contributions and rent relief are taken into account, employees earning up to โฆ100,000 per month may also see their tax liability drop to zero.
๐๐ช๐ด๐ค๐ข๐ญ ๐ง๐ฆ๐ฅ๐ฆ๐ณ๐ข๐ญ๐ช๐ด๐ฎ: Personal Income Tax remains payable to the relevant State Internal Revenue Services (SIRS), not the NRS. All revenue agencies will work together under the Joint Revenue Board to ensure a harmonised and seamless experience for taxpayers.
๐๐ข๐ณ๐ต๐ฏ๐ฆ๐ณ๐ด๐ฉ๐ช๐ฑ ๐๐ฏ๐ค๐ฐ๐ฎ๐ฆ: Taxes for individuals in a partnership are payable to each partnerโs state of residence.
๐๐ฐ๐ฎ๐ฑ๐ฆ๐ต๐ช๐ต๐ช๐ท๐ฆ ๐ณ๐ฆ๐ฎ๐ฐ๐ต๐ฆ ๐ธ๐ฐ๐ณ๐ฌ ๐ต๐ข๐น ๐ณ๐ฆ๐จ๐ช๐ฎ๐ฆ: Nigeria is now more competitive for global talent. Foreign employers are no longer deemed taxable in Nigeria solely because they have employees working remotely in the country.
๐๐ฉ๐๐ซ๐๐ญ๐ข๐จ๐ง๐๐ฅ๐ข๐ฌ๐ข๐ง๐ ๐ญ๐ก๐ ๐๐๐ฐ ๐๐๐๐ ๐๐จ๐ฆ๐ฉ๐ฎ๐ญ๐๐ญ๐ข๐จ๐ง
To ensure that individuals benefit from the pro-workers provisions of the new tax laws, payroll managers are encouraged to follow the process below:
Step 1 - Start with gross income
Step 2 - Add benefits-in-kind (if applicable)
Step 3 - Grant reliefs for pension, NHIS, NHF etc
Step 4 - Apply rent relief (20% of actual rent paid capped at โฆ500,000)
Step 5 - Exempt the first โฆ800,000 (taxed at 0%) and apply progressive rates thereafter.
While the top marginal rate is 25%, the effective rate is much lower due to these deductions.
๐๐ฆ๐ฉ๐จ๐ซ๐ญ๐๐ง๐ญ ๐๐ข๐ฅ๐ข๐ง๐ ๐๐๐๐๐ฅ๐ข๐ง๐๐ฌ:
- Employer annual returns: Due by 31 January each year, covering employeesโ emoluments and tax deductions.
- Individual self-assessment return: To be filed by every taxable individuals including employees not later than 31 March covering all income sources.
- Tax incentives return: A new requirement for beneficiaries of specific tax incentives.
Watch the full recording here: https://t.co/d705ZQiJxL
#TaxReformNG #PayrollManagement #TaxReliefs
๐ ๐๐๐ฌ ๐จ๐ง ๐๐จ๐ฐ๐๐ซ ๐จ๐ ๐๐ฎ๐๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ข๐จ๐ง ๐ข๐ง ๐๐๐ฑ ๐๐๐ฆ๐ข๐ง๐ข๐ฌ๐ญ๐ซ๐๐ญ๐ข๐จ๐ง
๐ธ1: ๐พ๐๐๐ ๐๐ "๐๐๐๐๐ ๐๐ ๐๐๐๐๐๐๐๐๐๐๐๐"?
The power of substitution is a tax recovery mechanism that permits the tax authority to issue a directive to a third party (a 'substitute') to remit funds belonging to a defaulting taxpayer to settle a final, established, and unpaid tax liability. This power is only exercised after all legal and administrative processes, including appeals to the courts, have been exhausted.
๐ธ2: ๐ฐ๐ ๐๐๐๐๐ ๐ ๐๐๐๐ ๐๐ ๐๐๐๐๐๐๐๐๐ ๐๐๐ ๐๐ ๐๐๐๐ ๐๐๐๐๐?
No. The power of substitution is neither arbitrary nor discretionary. Its use is strictly governed by due process and can only be invoked after all established processes involving enquiries, assessments, objections, final notice, and appeals to the courts have been concluded, and the tax liability has become final and conclusive. It serves as a rigorously controlled, last-resort, not a routine administrative action.
๐ธ3: ๐ซ๐๐๐ ๐๐๐๐ ๐๐๐๐๐๐ ๐๐๐-๐๐๐๐๐๐ ๐๐๐๐๐๐๐ ๐๐ ๐๐๐๐๐ ๐๐๐๐๐๐๐๐๐๐?
Individuals earning the national minimum wage or small businesses operating below applicable taxable thresholds are outside the scope of this measure. The power of substitution is only worthwhile where there is a substantial tax liability, which these groups generally do not have under the new tax laws.
๐ธ4: ๐ฐ๐ ๐๐๐ ๐๐๐๐๐ ๐๐ ๐๐๐๐๐๐๐๐๐๐๐๐ ๐ ๐๐๐ ๐๐๐๐๐๐๐๐๐ ๐๐ ๐ต๐๐๐๐๐๐๐ ๐๐๐ ๐๐๐๐?
No. This power is not new. It has been an existing provision of Nigeriaโs tax legislation, including section 50 of the repealed Personal Income Tax Act (PITA) and various other tax statutes.
๐ธ5: ๐ฐ๐ ๐๐๐๐ ๐ ๐๐๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐?
Yes. The use of third-party collection mechanisms is consistent with global best practices in tax administration. Similar powers, such as issuing garnishment or third-party payment notices, are common in tax jurisdictions worldwide to recover confirmed tax debts.
๐ธ6: ๐พ๐๐ ๐๐ ๐๐๐๐ ๐๐๐๐๐ ๐๐๐๐๐๐๐๐๐?
This power is essential for maintaining fairness within the tax system. Without effective enforcement tools, compliant taxpayers are unfairly burdened, tax evasion is inadvertently encouraged, and government finances face undue pressure, which can lead to higher tax rates for all.
๐ธ7: ๐ผ๐๐ ๐๐ ๐๐๐๐ ๐๐๐๐ ๐๐๐๐๐๐ ๐๐๐ ๐๐๐ ๐๐๐ ๐๐๐๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐ ๐๐๐๐ ๐๐๐๐๐?
The power of substitution is strictly a last-resort measure and requires the simultaneous fulfillment of the following three conditions:
Exhausted process - the entire process for establishing a tax liability (enquiries, assessment, objection, final notice, and appeal involving the court) has been concluded.
Final liability - the taxpayer has a confirmed, final tax liability that is legally due and payable.
Refusal to pay - the taxpayer has failed, neglected, or refused to pay the debt within the written period specified by the tax authority.
๐ธ8: ๐พ๐๐ ๐๐๐ ๐๐ ๐๐๐๐๐๐๐๐๐ ๐๐ ๐ '๐๐๐๐๐๐๐๐๐๐' ๐๐ ๐ ๐ ๐๐๐๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐?
The tax authority can issue a notice of substitution to any person who holds funds belonging to, or owes sums of money due to the defaulting taxpayer.
๐ธ9: ๐พ๐๐๐ ๐๐๐ ๐๐๐ ๐๐๐๐๐๐๐๐๐๐๐ ๐๐ ๐ ๐๐๐๐๐๐๐๐๐๐, ๐๐๐ ๐๐๐ ๐๐๐๐ ๐ ๐๐๐๐๐๐ ๐ ๐๐๐๐๐๐ ๐๐๐ ๐๐๐๐๐๐๐๐๐๐๐?
Upon receiving a notice of substitution, the appointed party is statutorily obligated to either comply or formally object in writing within 30 days. The objection must specify the grounds for refusal. The legal provisions for appealing tax assessments are also applicable to the substitution notice.
๐ธ10: ๐พ๐๐๐ ๐๐๐ ๐๐๐ ๐๐๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐๐ ๐ ๐๐ ๐๐๐๐๐๐๐ ๐๐๐ ๐๐๐๐๐ ๐๐ ๐๐๐๐ ๐๐๐๐๐?
Various legal and administrative safeguards exist to ensure the power is controlled, subject to review, and accountable including:
Due process - a mandatory due process for establishing the final tax assessment.
Right to object - a statutory right for the substitute to object in writing within 30 days.
Appeal rights - comprehensive appeal rights under the established tax dispute resolution framework.
Taxpayer rights - protection for the taxpayer or appointed agent by the Office of the Tax Ombud.
๐๐จ๐ง๐๐ฅ๐ฎ๐๐ข๐ง๐ ๐๐๐ฌ๐ฌ๐๐ ๐
The power of substitution, including its framework under the new tax laws, is a carefully controlled mechanism designed to ensure equity in the tax system. It is not punitive, arbitrary, or intended for routine administration, which is why its use has been historically rare. It exists to ensure that confirmed and lawful tax debts are ultimately paid by those who may choose to ignore their statutory obligations.
-๐๐ณ๐ฆ๐ด๐ช๐ฅ๐ฆ๐ฏ๐ต๐ช๐ข๐ญ ๐๐ช๐ด๐ค๐ข๐ญ ๐๐ฐ๐ญ๐ช๐ค๐บ & ๐๐ข๐น ๐๐ฆ๐ง๐ฐ๐ณ๐ฎ๐ด ๐๐ฐ๐ฎ๐ฎ๐ช๐ต๐ต๐ฆ๐ฆ
We are pleased to note the feedback from workers who have received their salaries for January 2026 and confirmed a reduction in their PAYE tax resulting in higher take home pay under the new tax laws.
To ensure that relevant individuals charged with the responsibility to implement these changes for the benefit of employees in their organisations are well informed, the Presidential Fiscal Policy and Tax Reforms Committee is hosting a session for the key stakeholders in collaboration with the Joint Revenue Board.
๐๐๐ฑ ๐๐๐๐จ๐ซ๐ฆ ๐๐ฆ๐ฉ๐ฅ๐๐ฆ๐๐ง๐ญ๐๐ญ๐ข๐จ๐ง ๐๐๐ฌ๐ฌ๐ข๐จ๐ง ๐๐จ๐ซ ๐๐, ๐๐๐ฒ๐ซ๐จ๐ฅ๐ฅ ๐๐ง๐ ๐๐๐ฑ ๐๐๐ง๐๐ ๐๐ซ๐ฌ
You are invited to register for an engagement session with the Joint Revenue Board and the Presidential Fiscal Policy & Tax Reforms Committee.
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๐๐๐ซ๐ ๐๐ญ ๐๐ฎ๐๐ข๐๐ง๐๐:
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HR Directors, Payroll Managers, Chief Financial Officers, Tax Managers and Other Senior Executives responsible for the management of employee compensation and payroll tax compliance.
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When:ย Wednesday Jan 28, 2026
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Time:ย 3:00 PM Nigerian Time
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Topic:ย ย Personal Income Tax Compliance Under the New Tax Reform Acts
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Register in advance for this webinar:
https://t.co/6iurrPqQAs
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After registering, you will receive a confirmation email containing information about joining the webinar.
#FiscalReforms #TaxBenefits #KnowledgeIsPower
๐๐ง๐ ๐๐ ๐๐ฆ๐๐ง๐ญ ๐๐๐ฌ๐ฌ๐ข๐จ๐ง ๐จ๐ง ๐๐ฆ๐ฉ๐ฅ๐๐ฆ๐๐ง๐ญ๐๐ญ๐ข๐จ๐ง ๐จ๐ ๐๐๐ฐ ๐๐๐ฑ ๐๐๐ญ๐ฌ ๐๐จ๐ซ ๐ ๐ข๐ง๐๐ง๐๐ข๐๐ฅ ๐๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐ญ๐ข๐จ๐ง๐ฌ
๐๐ช๐ฅ ๐บ๐ฐ๐ถ ๐ฌ๐ฏ๐ฐ๐ธ ๐ต๐ฉ๐ข๐ต ๐ต๐ฉ๐ฆ ๐ต๐ข๐น ๐ณ๐ฆ๐ง๐ฐ๐ณ๐ฎ๐ด ๐ฅ๐ช๐ฅ ๐ฏ๐ฐ๐ต ๐ช๐ฏ๐ต๐ณ๐ฐ๐ฅ๐ถ๐ค๐ฆ ๐ข๐ฏ๐บ ๐ฏ๐ฆ๐ธ ๐ต๐ข๐น ๐ฐ๐ณ ๐ญ๐ฆ๐ท๐บ ๐ฐ๐ฏ ๐ฆ๐ญ๐ฆ๐ค๐ต๐ณ๐ฐ๐ฏ๐ช๐ค ๐ต๐ณ๐ข๐ฏ๐ด๐ง๐ฆ๐ณ๐ด ๐ฐ๐ณ ๐ฎ๐ฐ๐ฏ๐ฆ๐บ ๐ช๐ฏ ๐บ๐ฐ๐ถ๐ณ ๐ฃ๐ข๐ฏ๐ฌ ๐ข๐ค๐ค๐ฐ๐ถ๐ฏ๐ต๐ด? In fact, under the new laws, many businesses are now eligible to claim input VAT credits on bank charges.
To support smooth implementation and clear communication, a multi-stakeholder engagement session was recently held for financial institutions, involving the Nigeria Revenue Service, the Joint Revenue Board, the Central Bank of Nigeria, and the Presidential Fiscal Policy & Tax Reforms Committee.
Participants included Risk and Compliance Officers, Legal Advisers, Chief Financial Officers, and Regulatory Affairs Executives from fintechs, commercial banks, microfinance banks, pension funds, asset managers, investment and securities firms, and other financial institutions.
Key issues focused on:
โข Ensuring customers are not wrongly charged
โข Tax ID as a requirement for bank accounts operated for business or income purposes (introduced since 13 January 2020)
โข Providing tailored information to support customers in filing their tax returns and claiming tax deductions
โข Repeal of Tax Clearance Certificates (TCC) as a requirement for foreign exchange transactions to improve ease of doing business
โข Clarifying the due process for the exercise of the power of substitution by tax authorities (which had always existed under previous laws)
โข Additional taxpayer safeguards and protections under the Office of the Tax Ombud.
The tax reforms are designed to support formalisation, tax harmonisation, and financial inclusion, while improving trust and efficiency across the financial system.
#TaxReforms #EaseOfDoingBusiness #KnowledgeIsPower
๐๐๐ง๐ฎ๐๐๐๐ญ๐ฎ๐ซ๐๐ซ๐ฌ ๐๐๐๐ค ๐๐๐ฑ ๐๐๐๐จ๐ซ๐ฆ๐ฌ, ๐๐๐ฅ๐ฅ ๐๐จ๐ซ ๐๐๐๐๐ฅ๐๐ซ๐๐ญ๐๐ ๐๐๐ฑ ๐๐๐ซ๐ฆ๐จ๐ง๐ข๐ฌ๐๐ญ๐ข๐จ๐ง ๐๐๐ซ๐จ๐ฌ๐ฌ ๐๐ญ๐๐ญ๐๐ฌ
The Manufacturers Association of Nigeria (MAN) recently hosted a hybrid stakeholder engagement with the Presidential Committee on Fiscal Policy and Tax Reforms, focused on the implications of the new tax laws for the manufacturing sector.
The session highlighted key benefits of the reforms aimed at reducing the tax burden on manufacturers and simplifying compliance, including -
Key benefits for manufacturers:
โข Harmonisation: Elimination of multiple taxes to streamline operations
โข Incentives: Expanded input VAT credits and improved incentives for priority sectors
โข Efficiency: Promotion of technology adoption and automation to simplify and modernise tax compliance processes and elimination of burdensome compliance requirements such as certificate of acceptance for fixed assets as a precondition for capital allowance.
โข Equity & fairness: Rationalisation of distortionary incentives and higher tax exemption thresholds for small businesses.
โข Business growth: Removal of withholding tax on manufacturers and turnover tax, helping conserve cash flow and avoid taxation of capital.
โข Taxpayer protection: Establishment of the Office of Tax Ombud to protect taxpayer rights and curb harassment and exploitation.
Areas identified for clarification and further action include:
โข High import tariffs on certain raw materials
โข Tax treatment and exemptions for exports
โข Accelerated adoption of tax harmonisation laws by all states to complement the national reforms and curb multiple taxation by state and non-state actors
The dialogue also featured a robust Q&A session with industry participants.
Watch the full session here: https://t.co/SFXaAa6fm0
#TaxReforms #Manufacturing #EaseOfDoingBusiness #FiscalPolicy #Nigeria
๐๐ก๐๐ฆ๐๐๐ซ๐ฌ ๐จ๐ ๐๐จ๐ฆ๐ฆ๐๐ซ๐๐ ๐๐๐ฎ๐ ๐๐๐ฑ ๐๐๐๐จ๐ซ๐ฆ๐ฌ ๐๐ข๐ฆ๐๐ ๐๐ญ ๐๐จ๐จ๐ฌ๐ญ๐ข๐ง๐ ๐๐จ๐ฆ๐ฉ๐๐ญ๐ข๐ญ๐ข๐ฏ๐๐ง๐๐ฌ๐ฌ ๐๐ง๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ ๐๐ซ๐จ๐ฐ๐ญ๐ก
The Lagos Chamber of Commerce and Industry (LCCI) recently hosted its 2026 Economic Outlook, which featured a session on the implementation of the new tax system and its implications for business and investment by the Presidential Committee on Fiscal Policy and Tax Reforms.
Participants at the session commended the Federal Government for the bold reforms aimed at addressing long-standing fiscal and tax barriers to investment and business growth.
Key provisions of the new tax laws highlighted as enablers of competitiveness, poverty reduction, and sustainable development include:
โข Tax exemption for low-income earners and small businesses
โข Planned reduction of Company Income Tax from 30% to 25%
โข Expanded VAT input credits for businesses
โข Removal of VAT on basic consumption items
โข Introduction of economic development incentives for priority sectors
The Chamber called for clearer transition rules and continued stakeholder engagement and enlightenment to address concerns and ensure smooth implementation of the reforms.
Watch the full session here:
https://t.co/HsEbCxaBer
#TaxReforms #BusinessGrowth #Competitiveness #FiscalPolicy #Nigeria
There is NO VAT on the money you transfer. VAT is only charged on the banking fee or commission which has been the case since VAT was introduced in 1993.
๐๐๐ฒ๐๐ฅ๐ฌ๐ ๐๐ญ๐๐ญ๐ ๐๐๐จ๐ฉ๐ญ๐ฌ ๐๐๐ฐ ๐๐๐ซ๐ฆ๐จ๐ง๐ข๐ฌ๐๐ ๐๐๐ฑ ๐๐๐ฐ
Bayelsa State has joined the growing number of states that have enacted the Harmonised Taxes Law as part of the ongoing tax reforms aimed at eliminating multiple taxation and illegal tax collection.
We commend Bayelsa State for this important step, alongside other states where similar laws have been enacted, including Anambra, Ekiti, Gombe, Kogi, Nasarawa, Plateau, and Zamfara. Many more states are currently in the final stages of passing and gazetting the law.
This momentum marks the beginning of a more coordinated, transparent, and investor-friendly fiscal framework across the federation.
A transformative fiscal era is underway.
๐๐จ๐ ๐๐ฅ๐๐ฌ๐ฌ ๐๐ข๐ ๐๐ซ๐ข๐.
๐๐๐ฌ๐ฉ๐จ๐ง๐ฌ๐ ๐ญ๐จ ๐๐๐๐: ๐๐๐ฌ๐๐ซ๐ฏ๐๐ญ๐ข๐จ๐ง๐ฌ ๐จ๐ง ๐๐ข๐ ๐๐ซ๐ข๐โ๐ฌ ๐๐๐ฐ ๐๐๐ฑ ๐๐๐ฐ๐ฌ
---๐๐บ ๐๐ณ๐ฆ๐ด๐ช๐ฅ๐ฆ๐ฏ๐ต๐ช๐ข๐ญ ๐๐ช๐ด๐ค๐ข๐ญ ๐๐ฐ๐ญ๐ช๐ค๐บ ๐ข๐ฏ๐ฅ ๐๐ข๐น ๐๐ฆ๐ง๐ฐ๐ณ๐ฎ๐ด ๐๐ฐ๐ฎ๐ฎ๐ช๐ต๐ต๐ฆ๐ฆ
We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws. We acknowledge that a few points raised by KPMG are useful, particularly where they relate to implementation risks and clerical or cross-referencing issues. However, the majority of the publication reflected a misunderstanding of the policy intent, a mischaracterisation of deliberate policy choices, and, in several instances, repetitions and presentation of opinion and preferences as facts.
๐๐๐ง๐๐ซ๐๐ฅ ๐จ๐๐ฌ๐๐ซ๐ฏ๐๐ญ๐ข๐จ๐ง๐ฌ
A significant proportion of the issues described as โerrors,โ โgaps,โ or โomissionsโ by KPMG are either:
- the firmโs own errors and invalid conclusions,
- issues not properly understood by the firm,
- missed context on broader reforms objectives,
- areas where KPMG prefer different outcomes than the choices deliberately made in the new tax laws, and
- obvious clerical and editorial matters already identified internally.
While it is legitimate to disagree with policy direction, disagreements should not be framed as errors or gaps. KPMG would have been more effective if the firm adopted a similar approach like other professional firms who engaged directly providing the opportunity for clarifications and mutual-learning.
It is equally important to distinguish between policy choices designed to achieve the reform objectives and proposals that merely represent a firm's preference.
๐๐จ๐ฅ๐ข๐๐ฒ ๐๐ก๐จ๐ข๐๐๐ฌ ๐๐ง๐ ๐๐ฅ๐๐ซ๐ข๐ญ๐ฒ ๐จ๐ง ๐๐๐๐จ๐ซ๐ฆ๐ฌ
1. Taxation of Shares and the Stock Market
Contrary to the presumption that the new tax provisions on chargeable gains would trigger a sell-off on the stock market, the fact is that the applicable tax rate on share gains is not a flat 30%. The tax framework is structured from 0% to a maximum of 30%, which is set to reduce to 25%. Furthermore, a significant majority of investors (99%) are entitled to unconditional exemption, with others qualifying subject to reinvestment.
The market's performance, which is at an all-time high with increased investment flow, demonstrates investors understanding that the tax changes will enhance the fundamentals of firms both in terms of profitability and cash flows. The sell-off narrative is unsubstantiated as any disposals in December 2025 would have benefited from the re-investment exemption or enhanced deductions under the new law.
2. Commencement Date and Transition
The suggestion to set the commencement date as the start of an accounting period (e.g., 1 January 2026) takes a narrow view of the complex transition issues. A wholesale reform affects myriad issues beyond the accounting period, spanning multiple periods, different bases of assessment (preceding year, actual year), as well as issues related to audit, deductions, credits, and penalties. Limiting the commencement to a single date for accounting periods would fail to address the intricacies of continuous transactions and other transition matters. KPMGโs proposal is therefore not a โgold standardโ to be applied to all new laws as suggested.
3. Indirect Transfer of Shares
The new provision to tax indirect transfer of shares is a policy choice aligned with global best practices and BEPS initiatives. Its objective is to block a long-exploited tax loophole by multinationals and other investors, not to affect competitiveness. This is a common provision in international tax, and the assertion that it may affect the country's economic stability is disingenuous.
4. VAT Exemption on Insurance Premium
KPMG's point regarding a specific VAT exemption on insurance premium is technically unnecessary, as an insurance premium is not a "taxable supply" defined under the Nigeria Tax Act. Insurance relates to risk transfer, not the supply of goods or services subject to VAT. As this has always been the administrative and legal position, a specific amendment for exemption is academic. If it is not broken, donโt fix it.
๐๐ฌ๐ฌ๐ฎ๐๐ฌ ๐๐๐๐ฅ๐๐๐ญ๐ข๐ง๐ ๐๐ข๐ฌ๐ฎ๐ง๐๐๐ซ๐ฌ๐ญ๐๐ง๐๐ข๐ง๐ ๐๐ฒ ๐๐๐๐
5. Inclusion of 'Community' in Definition
The concern about the inclusion of โcommunityโ in the definition of a โpersonโ but its omission from the charging section does not constitute a gap or ambiguity. In statutory interpretation, definitions provided in the law apply wherever the defined term appears, unless the context requires otherwise. Hence, โpersonโ and โtaxable personโ are used in the charging section, and both definitions include โcommunity.โ This approach is consistent with modern legislative drafting principles, which use comprehensive definitions to streamline operative provisions and avoid redundancy. This is similar to the inclusion of partnerships and executors in the definition but not under the charging section. The use of the word โincludesโ further signifies that the list of taxable persons is not exhaustive.
6. Joint Revenue Board (JRB) Composition
The composition and mandate of the Joint Revenue Board (JRB) are intentional. Its policy advisory role is specifically to provide a subnational tax and revenue perspective that complements the fiscal policy mandate of the Ministry of Finance. Its membership is appropriately limited to revenue-focused agencies, which is why it is called the Joint Revenue Board. This is a similar composition under which the former JTB operated effectively, and its functions remain consistent with the need for inter-agency coordination.
7. Distinction in Dividend Treatment
KPMG's analysis appears to mix the distinction between a foreign-controlled company and a foreign operation of a Nigerian company. Dividends distributed by a foreign company cannot be "franked" since no Nigerian Withholding Tax (WHT) would have been deducted. Section 162(1)(s) confers exemption on dividend, interest, rent, or royalty derived from outside Nigeria and brought into Nigeria through approved channels. The choice to treat dividends distributed by Nigerian companies differently from foreign companies is a deliberate policy choice, as they are fundamentally different for tax purposes.
8. Non-Resident Registration and Final Tax
The view that a payment subject to deduction as final tax should automatically exempt the non-resident recipient from tax registration misses a critical distinction. While the law conditionally exempts passive income from registration, the deduction of tax on non-passive income is not synonymous with an exemption from registration or filing of returns. The same way that residents are required to file returns on income such as interest (in the case of individuals) and dividend where WHT is final. Returns serve a broader purpose beyond solely generating tax revenue.
๐๐๐๐โ๐ฌ ๐๐ซ๐จ๐ฉ๐จ๐ฌ๐๐ฅ๐ฌ ๐๐ก๐๐ญ ๐๐จ๐ฎ๐ฅ๐ ๐๐ง๐๐๐ซ๐ฆ๐ข๐ง๐ ๐๐๐ฒ ๐๐๐๐จ๐ซ๐ฆ ๐๐๐ฃ๐๐๐ญ๐ข๐ฏ๐๐ฌ
9. Tax on Foreign Insurance Premiums
The proposal to exempt foreign insurance companies from tax on premiums from insurance written in Nigeria to deepen penetration, while local insurance companies continue to pay tax, would be detrimental to the domestic insurance sector. This would create an unfair and harmful competitive disadvantage for local firms in their own market. The current policy is designed to protect and promote local industry and ensure a level playing field.
10. Parallel Market Forex Deduction
The new law disallows tax deduction for the difference where a business buys foreign exchange in the parallel market at a premium over the official rate. This is a critical fiscal policy choice designed to complement monetary policy, strengthen, and stabilise the Naira. By removing the tax subsidy for patronage of the parallel market, the policy aims to reduce incentives for round-tripping and redirect legitimate FX demands to the official market. This is policy congruence, not an error.
11. VAT Compliance-Linked Deductibility
The non-tax deduction for taxable transactions on which VAT has not been charged is a necessary anti-avoidance measure. It removes the advantage that some taxpayers previously enjoyed by patronising suppliers who evade VAT. This is a matter of fairness and is squarely within the control of a business to manage, especially given the provision for the self-charge of VAT. It also ensures that responsible businesses play their part in promoting voluntary tax compliance across the ecosystem.
12. Progressive Personal Income Tax
While KPMG acknowledges the reform objective of fairness and progressivity, the firm disagrees with a top marginal tax rate of 25% for the highest earners. In reality, the effective tax rate can be as low as 22% for an individual earning billions a year simply by contributing 10% to pension. This rate is competitive when compared to many other countries, including Angola 25%, Egypt 27.5%, Ghana 35%, Kenya 35%, the U.S. (Federal) 37%, South Africa 45%, and the U.K. 45%. So, the rate is not โoppressiveโ or one that will negatively affect economic growth as claimed, rather it ensures progressivity without compromising competitiveness. From a broader policy objective perspective, the increase in top marginal rate for high income earners and the reduction in corporate tax rate is designed to address the existing higher tax burden associated with business formalisation.
๐ ๐๐ฅ๐ฌ๐ ๐๐ง๐๐ฅ๐ฎ๐ฌ๐ข๐จ๐ง ๐๐ง๐ ๐ ๐๐๐ญ๐ฎ๐๐ฅ ๐๐ซ๐ซ๐จ๐ซ ๐๐ฒ ๐๐๐๐
13. Police Trust Fund
The Police Trust Fund was signed into law on May 24, 2019, with a six-year lifespan under section 2(2) of the Act, which ended in June 2025. Therefore, KPMG's point that the new tax law should be amended to repeal the taxing section of the Police Trust Fund Act is needless, as the provision no longer exists.
14. Small Company Verification
The analysis concerning the tax exemptions for small companies affecting large companies' obligations is not a new issue or an inconsistency in the new law. The small business threshold was introduced via the Finance Act 2021. This issue pre-dates the current tax laws and should not be presented as an error or omission simply by virtue of a higher tax exemption threshold under the new law.
๐๐ก๐๐ญ ๐๐๐๐ ๐๐๐๐ญ ๐๐ฎ๐ญ
While acknowledging the objectives of the reform, KPMG could have highlighted the major structural improvements under the new laws, including:
- simplification and tax harmonisation,
- the scope for reduction in corporate tax rate from 30% to 25%,
- expanded input VAT credits for businesses,
- tax exemption for low-income earners and small businesses,
- elimination of minimum tax on turnover and capital, and
- improved investment incentives for priority sectors.
A balanced assessment would have recognised these transformative elements, among others.
๐๐จ๐ง๐๐ฅ๐ฎ๐ฌ๐ข๐จ๐ง ๐๐ง๐ ๐๐๐ฒ ๐ ๐จ๐ซ๐ฐ๐๐ซ๐
The tax reform is the result of an extensive consultation with various stakeholder groups in addition to the legislative process that included widely publicised public hearings, avenues intended for all stakeholders including international firms to provide technical expertise at the formative stage.
In any comprehensive overhaul of a nationโs tax framework, clerical inconsistencies or cross-referencing gaps may occur, and these are already being identified within the government. The tax reform represents a bold step toward a self-sustaining and competitive Nigeria.
An effective review needs to connect identified gaps to clear policy intents and the reality of modern-day tax systems within the context of economic development and global competitiveness.
At this stage, the effectiveness of the tax law depends on administrative guidance, clarifications from the tax authority, and regulations to complement precise statutory provisions where necessary pending future amendments.
We urge all stakeholders to pivot from a static critique to a dynamic engagement model, which allows for clarifications and a productive partnership in the implementation of the new tax laws.
๐๐จ๐ฅ๐ฅ๐๐๐จ๐ซ๐๐ญ๐ข๐ง๐ ๐๐ข๐ญ๐ก ๐๐ก๐ ๐๐๐ฑ ๐๐ฆ๐๐ฎ๐ ๐๐จ๐ซ ๐ ๐๐ข๐ซ ๐๐๐ฑ ๐๐๐ฆ๐ข๐ง๐ข๐ฌ๐ญ๐ซ๐๐ญ๐ข๐จ๐ง
Yesterday, the Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC) held a constructive meeting with the Office of the Tax Ombud (OTO) as part of ongoing efforts to support effective implementation of the tax reforms.
The Office of the Tax Ombud is an independent and impartial body established under the new tax laws to protect taxpayer rights, resolve complaints quickly and fairly, and build trust in the tax system through mediation and advocacy.
Our engagement focused on collaboration with the Tax Ombud given his critical role in ensuring that the reforms deliver not just better tax systems, but a fairer and more responsive tax administration for taxpayers.
#TaxReformsNaija #FairTaxAdministration
#TaxpayerRightsMatter #TaxOmbudNigeria
#FiscalPolicyReforms
๐๐ง๐ ๐๐ ๐๐ฆ๐๐ง๐ญ ๐ฐ๐ข๐ญ๐ก ๐ญ๐ก๐ ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ฌ๐ฌ๐จ๐๐ข๐๐ญ๐ข๐จ๐ง ๐จ๐ ๐๐ข๐ ๐๐ซ๐ข๐๐ง ๐๐ญ๐ฎ๐๐๐ง๐ญ๐ฌ (๐๐๐๐)
We had a productive engagement with the National Association of Nigerian Students (NANS) and its leadership from tertiary institutions across the country.
The discussion focused on the rationale for the reforms, their core objectives, and the benefits for students and all young Nigerians. We highlighted how the reforms reduce the tax burden on average Nigerians and remove tax-related barriers to opportunities such as business process outsourcing (BPO) and other emerging sectors for young people.
The students commended the thoughtfulness of the reforms and welcomed the clarity that the reforms are not designed to target the poor, but to provide relief and opportunity contrary to the widespread misinformation.
Following the engagement, the students resolved to call off their planned protest scheduled for 14 January 2026 and instead collaborate with the government to sensitise students and other citizens nationwide.
Constructive dialogue works. Collaboration not confrontation. Nigeria is winning.
-๐ท๐๐๐๐๐ ๐๐๐๐๐๐ ๐ญ๐๐๐๐๐ ๐ท๐๐๐๐๐ ๐๐๐ ๐ป๐๐ ๐น๐๐๐๐๐๐ ๐ช๐๐๐๐๐๐๐๐