Nigeria’s National Assembly has passed a bill for the alteration of the 1999 Constitution to address multiple taxation and related objectives, marking a significant step towards reforming the country’s tax system. According to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, the amendments aim to clarify the taxation powers of federal, state, and local governments, prevent overlap and conflict, and define the scope of taxes and levies collectible by each tier of government.

The proposed changes also seek to introduce a ceiling on the number of taxes on income, consumption, or property that may be imposed on a taxpayer, strike out nuisance taxes, and prevent the harassment of persons for the purpose of tax collection. Additionally, the amendments aim to enhance transparency, fiscal discipline, and accountability in the collection of taxes. Oyedele expressed gratitude to the National Assembly for their efforts to address a critical problem in the tax system, stating that the amendments will ensure that taxes are sustainably harmonized and the burden and related consequences removed once and for all.

In a related development, the Nigerian government has announced the signing into law of four tax reform bills, consisting of the Nigeria Tax Act, 2025, the Nigeria Tax Administration Act, 2025, the Nigeria Revenue Service (Establishment) Act, 2025, and the Joint Revenue Board (Establishment) Act, 2025. These reforms, which were signed into law by President Bola Tinubu on June 26, 2025, mark one of the most sweeping overhauls of Nigeria’s tax system in decades.

The reforms include a high exemption threshold for small businesses, with companies having an annual turnover under N100 million and assets under N250 million potentially exempt from corporate tax. Personal income tax threshold changes are also expected, with earners below N800,000 annual income potentially paying no income tax from 2026. Furthermore, the reforms introduce stricter and expanded compliance obligations, including tougher record-keeping requirements and mandatory e-invoicing for VAT-registered businesses.

The implementation of these reforms is expected to have a significant impact on Nigeria’s tax system, reducing duplication and improving the ease of doing business. With the Tax Act and Tax Administration Act set to commence on January 1, 2026, the country is poised to embark on a new era of tax reform, aiming to create a more streamlined and efficient tax environment. As the National Assembly continues to work on the constitutional amendments, the successful passage of these reforms will be crucial in addressing the long-standing issues of multiple taxation and promoting economic growth in Nigeria.