FG to review tax laws

The Federal Government has begun a six-week review of Nigeria’s new tax laws to identify implementation gaps, address unintended consequences and consider concerns raised by businesses and other stakeholders.

The review will examine areas including Value Added Tax thresholds, withholding tax, capital gains treatment and multiple taxation, with recommendations expected to feed into the Finance Bill 2027. Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele announced the exercise while inaugurating the Technical Subcommittee on Fiscal Policy and Tax Reforms in Abuja.

The Nigeria Tax Act 2025, Nigeria Tax Administration Act 2025, Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025 took full effect on January 1, 2026. Oyedele said experience since implementation began had revealed areas requiring clarification, refinement or further reform.

“The real test begins when the law meets the economy, as businesses interpret it, administrators implement it, investors respond to it, and citizens experience it. Implementation inevitably reveals areas requiring clarification, refinement or further reform,” he said. He stressed that the review was not intended to reverse the tax reforms introduced in 2025 but to improve their implementation in response to practical experience and changing economic conditions.

“The Finance Bill 2027 should not be seen as just another annual legislative exercise. Our task is not to rewrite the 2025 reforms, but to preserve their fundamental principles while learning from implementation and responding to new economic realities.

“We must ask where implementation has revealed ambiguity, where unintended consequences have emerged, where compliance can be simplified, and where we can improve investment and competitiveness,” Oyedele said. The review follows concerns raised by members of the organised private sector over the implementation and interpretation of some provisions of the new tax regime.

In June, private-sector groups including the Manufacturers Association of Nigeria, Nigerian Association of Small and Medium Enterprises, Nigerian Association of Small Scale Industrialists, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture and Nigeria Employers’ Consultative Association wrote an open letter to President Bola Tinubu raising concerns over corporate tax filings.

The groups said they supported the government’s tax reform programme but argued that conflicting interpretations of the new laws were creating difficulties for businesses seeking to comply. “This Open Letter is not an attack on tax reform or lawful revenue mobilisation,” the groups said.

“It is a plea to preserve the legality, credibility and economic promise of the historic reforms championed by Your Excellency. Our members are willing and ready taxpayers. They seek a clear, lawful and functional framework through which they can file accurate returns, pay taxes already accrued to the Federation, protect jobs and continue investing in Nigeria.” A central area of disagreement concerns the treatment of tax obligations arising from accounting periods that ended before January 1, 2026.

The organised private sector said transition guidelines issued under the new tax framework provided that obligations arising from accounting periods ending before the commencement of the new laws should continue to be governed by the previous legislation, even where filing or payment deadlines fall in 2026. However, the groups alleged that the Nigeria Revenue Service adopted a different interpretation.

A June 23, 2026 notice from the NRS Emerging Taxpayers Office in Abuja directed companies yet to file Companies Income Tax returns for the 2026 Year of Assessment to do so under the new Nigeria Tax Act and Nigeria Tax Administration Act framework. “The applicable law for filing is determined by statute and not by taxpayer election, publication, administrative discretion, advisory, or any other communication suggesting an alternative filing basis,” the notice stated.

“The Service has no statutory authority to process Companies Income Tax returns for the 2026 Year of Assessment under the repealed Companies Income Tax Act or any other repealed tax legislation.” As part of the latest review, the government said it received 134 submissions from across Nigeria’s geopolitical zones following a call for public input, in addition to submissions delivered in hard copy.

Preliminary issues raised included requests for clearer and simpler VAT thresholds, withholding tax rules and capital gains provisions, as well as stronger measures against multiple taxation and improved coordination among revenue authorities. Stakeholders also proposed greater digitalisation and data sharing to prevent taxpayers from repeatedly providing information already held by government agencies.

Other proposals include stronger taxpayer rights, quicker refunds, safeguards for small businesses and measures intended to improve investment and competitiveness in mining, renewable energy, healthcare and capital markets. The review will extend beyond taxation to fiscal policy and management, public financial management, debt, transparency, capital markets and cross-border capital flows.

Oyedele directed the subcommittee to consider the wider economic effects of proposed changes, particularly on low-income households, workers and businesses. “Every tax reform produces winners and losers; the question is whether a policy is fair, efficient and competitive, not whether it is popular with everyone,” he said.

“A provision that raises revenue may impose a far greater cost on the wider economy. The government must optimise the whole economy, not merely achieve a single objective.” Beyond recommendations for the Finance Bill 2027, the subcommittee will review the Deduction of Tax at Source Regulations 2024 and prepare revised withholding tax regulations.

It will also examine the Companies Income Tax (Significant Economic Presence) Order 2020 and develop an updated framework aligned with the new tax laws and international practices. The Permanent Secretary of the Federal Ministry of Finance chairs the subcommittee, while Chairman of the Tax Advisory Committee Albert Folorunsho serves as co-chair.

Its membership includes representatives of the Federal Ministry of Justice, Nigeria Revenue Service, Joint Revenue Board, Nigeria Customs Service, Central Bank of Nigeria, Debt Management Office, Budget Office of the Federation and Nigerian Investment Promotion Commission.

Representatives of SMEDAN, MAN, the Nigerian Economic Summit Group, Nigerian Bar Association, Association of National Accountants of Nigeria, Chartered Institute of Taxation of Nigeria, Institute of Chartered Accountants of Nigeria and NACCIMA are also members. The four major accounting firms; Deloitte, EY, KPMG and PwC, are also represented.

Folorunsho said the committee would develop recommendations intended to address the practical needs of taxpayers, businesses and government. The subcommittee has six weeks to complete its assignment and submit its recommendations.