President Bola Tinubu on Thursday signed four major tax reform bills into law, heralding a new era of economic modernization and signaling Nigeria’s readiness to attract global investment.
Chief among the changes, the newly enacted legislation centralizes all federally chargeable tax collection under the Nigeria Revenue Service (NRS)—revamping the nation’s revenue architecture. Revenue-generating agencies like the Nigeria Customs Service (NCS), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and several federal ministries will lose their tax collection mandates.
The signing ceremony at the State House in Abuja saw Tinubu stating:
“We have opened the door for new economic and business opportunities. We are showing that Nigeria is truly ready and open for business. Easy in, easy out.”
He praised reform stakeholders, noting:
“What you have provided is leadership and courage in the face of mounting dispute. Nowhere in the world will tax reforms be any easier.”
Tinubu described the moment as a turning point in Nigeria’s fiscal journey:
“We are in transit. We have changed the rule. … The question of our tax‑to‑GDP and all other formulas will be obsolete.”
Origins of the Reform
The process began on July 7, 2023, when Tinubu established a Presidential Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers. A related 30-day “quick-wins” report was delivered on October 24, 2023, recommending that over 200 separate taxes be consolidated into 10 levies.
After extensive consultations and legislative wrangling—especially over VAT and revenue-sharing—the bills were harmonized and passed by the National Assembly in May 2025. Resistance from state governors and federal agencies centered primarily on jurisdictional and fiscal concerns.
Key Provisions & Impact
The four newly signed laws are:
Nigeria Tax Bill (Fair Taxation)
Nigeria Tax Administration Bill
Nigeria Revenue Service (Establishment) Bill
Joint Revenue Board (Establishment) Bill
Collectively, these bills aim to:
Unify and simplify the fragmented tax system
Eliminate redundant agency mandates
Improve transparency and reduce bureaucratic bottlenecks
Restore investor confidence
Enhance coordination across government levels
Tinubu emphasized the reforms’ fairness, noting that the burden on vulnerable groups would be reduced while inefficiencies are removed.
Effective Date & Implementation
Zacch Adedeji, Executive Chairman of the NRS, confirmed that the laws take effect on January 1, 2026, to allow adequate time for stakeholder sensitization, system upgrades, and alignment with the fiscal calendar. As he explained:
“When you have this kind of change…you start from the beginning of the year.”
Voices of Support
Taiwo Oyedele described the reforms as “pro‑poor,” benefiting low-income earners and small businesses. He noted:
Over one-third of workers will be exempted from Pay-As-You-Earn tax
More than 90% of small businesses—Micro, Small, and Nano—will be exempt from corporate income tax, VAT, and withholding tax
Essential sectors such as food, education, health care, transport, accommodation, and housing are now zero‑rated for VAT
The reforms aim to close a 70% “tax gap” and eliminate wasteful incentives without raising rates for citizens
Oyedele added that the new digitized NRS platform—integrating National Identity Numbers, phone numbers, and bank data—will significantly reduce tax evasion and bolster transparency.
Senator Sani Musa (Finance Committee Chairman) emphasized that the reform process reflected genuine public consultation and struck a careful balance to protect less-privileged Nigerians.
Hon. James Faleke (House Finance Committee Chairman) described the bills’ passage as a “mission impossible” achieved through national cooperation.
Private Sector Reaction
The Nigeria Employers’ Consultative Association (NECA) hailed the reforms as a decisive step toward ending over a decade of multiple taxation, with their Director‑General, Adewale‑Smatt Oyerinde, describing the legislative development as “uhuru,” or freedom. NECA stressed that successful implementation, not just enactment, will be the true measure of success.
Catalyst for Energy Sector Investment
Olu Verheijen, Special Adviser on Energy, announced that the laws have formally enshrined four executive orders—including Presidential Directive 40 and energy sector tax incentives—already unlocking over $6 billion in fresh Oil & Gas investment. She termed the occasion “historic,” offering regulatory certainty and investor assurance.
What Comes Next
As of January 1, 2026, all federally chargeable taxes will be collected through the NRS. Key implementation steps include:
An extensive public awareness campaign
Digitization of tax operations and integration with national databases
Phased alignment with domestic and subnational fiscal systems
Ongoing stakeholder engagement to monitor impact and fine-tune the system
The long-term objectives: grow the economy, streamline revenue generation, and restore trust in the tax system—shifting Nigeria toward a transparent, growth-oriented fiscal model.
In summary, Tinubu’s signature of these four bills represents a historic overhaul of Nigeria’s tax system—grounded in modern administration, equity, and openness. The efficacy of the reforms now rests on implementation, readiness of the new NRS framework, and sustained collaboration between government, private sector, and citizens.
