Nigeria has commenced the implementation of its new tax laws and fiscal reforms, despite widespread public anxiety. The new tax regime, signed into law in June 2025, took effect on January 1, 2026, as announced by President Bola Ahmed Tinubu. The implementation has been met with concerns from various quarters, including the Nigeria Labour Congress, opposition parties, and human rights lawyer Femi Falana.
The controversy surrounding the tax reforms was intensified by allegations of alterations to the gazetted version of the tax law. However, the National Assembly has since ordered the laws to be re-gazetted to address these concerns. President Tinubu has assured Nigerians that the new tax laws will not impose additional burdens on citizens, a position echoed by the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele.
The Federal Capital Territory High Court has also dismissed a suit seeking to halt the implementation of the tax laws. According to economist and accountant Prof. Godwin Oyedokun, the objective of the new tax laws is to strengthen government revenue in a sustainable manner, not to punish taxpayers. He explained that Nigeria’s tax-to-GDP ratio remains among the lowest globally, limiting the government’s capacity to fund infrastructure, healthcare, education, and security without excessive borrowing.
The new tax laws aim to broaden the tax base, not necessarily to raise tax rates across the board. Most low-income earners are unlikely to be directly affected, as personal income tax thresholds and exemptions are still in place to protect the most vulnerable Nigerians. However, there is a risk that some businesses may pass compliance costs to consumers through higher prices, especially in an inflationary environment.
For businesses, the reforms may initially feel demanding, with stronger reporting requirements and tighter enforcement increasing compliance costs in the short term. However, effective implementation could eventually benefit the private sector by supporting business growth through better infrastructure, improved public services, and reduced policy uncertainty. As the new laws take effect, Nigerians are advised to stay informed and actively engaged, with public education, dialogue, and engagement with tax authorities being essential. The success of the new tax regime will ultimately depend on trust, effective communication, and responsible governance.