The Federal Inland Revenue Service, FIRS, says Nigeria’s new tax reform framework will significantly boost government revenue through technology-driven administration and expanded compliance, without imposing higher taxes on citizens.
Executive Chairman of FIRS, Dr. Zacch Adedeji, stated this at the Plenary Session of the 56th Annual Conference of the Nigerian Association of Law Teachers, NALT, on Wednesday in Abuja.
Adedeji, who was represented by the Head of Policy, Tax Reform Analysis Unit at FIRS, Bright Igbenosa, said the recently enacted Nigerian Tax Administration Act and related laws represent a historic leap toward a fairer, simpler, and more transparent tax system.
“The essence of this law, as a matter of fact, is to simplify the tax administration system to encourage business by granting exemption to small companies,” he said.
He explained that the reform, initiated by President Bola Tinubu, seeks to simplify and harmonize tax laws that were previously drafted in archaic and complex language, which discouraged compliance and made tax administration cumbersome.
“The old laws were difficult to comprehend. But if you look at the current Nigerian Tax Act, the language is simple, concise, and written in short sentences. It broadens the tax field while promoting voluntary compliance,” he added.
According to Adedeji, one of the most transformative features of the reform is the introduction of fiscalization, a digital system for real-time tax collection using e-invoicing technology.
“Fiscalization allows the FIRS to collect taxes electronically, starting with large taxpayers. The good news is that this process has already begun, meaning there will be revenue increase without the poor paying more,” he said.
He emphasized that under the new law, non-resident companies or individuals conducting business in Nigeria, whether through a physical presence or digital platforms, must register for tax compliance.
“Your physical presence is no longer required to be taxed in Nigeria; if you have significant economic activity here, even from abroad, you are subject to Nigerian tax under this new law.
“And most importantly, every non-resident company or person doing business in Nigeria, whether through physical presence or through economic presence, must also register for the purpose of compliance with the task obligation.
“If you carry out economic activity in Nigeria, whether you are in China, New York or Australia, you would be subject to Nigeria tax regime,” he stated.
Speaking further on the reform, he said it has introduced new incentives to attract investment and stimulate growth in key sectors, noting that investors in agribusiness would enjoy automatic five-year tax exemptions, while businesses in strategic sectors could access a 5 per cent tax credit, usable for up to five years.
“For instance, anyone investing in agricultural business is entitled to five years of automatic tax exemption. There’s also an economic development incentive that grants a five percent tax credit, which can be used to settle tax liabilities or carried forward for another five years,” he said.
He stated that to curb illicit financial flows and ensure multinational corporations pay their fair share, the new framework adopts a global minimum tax rule.
“Any multinational company operating in Nigeria with revenue above €750 million must now pay at least 15 per cent tax, even if it claims exemption elsewhere. If Nigeria does not collect it, another country will. This closes loopholes used for profit-shifting,” he stated.
On fairness in the tax regime, he said the law levels the playing field by bringing previously under-taxed industries such as gaming and lottery businesses into the standard 30 per cent corporate tax bracket, up from the earlier 7 per cent.
“Before now, gaming and lottery businesses were taxed at seven percent, which was unfair to other companies. The new law ensures uniformity and fairness across sectors,” he noted.
Adedeji stressed that the reform was guided by data and designed to encourage economic growth rather than stifle enterprise.
“The essence of this law is to encourage business, not to empower the tax authorities. It grants exemptions to small companies, simplifies compliance procedures, and ensures that no legitimate transaction, whether digital or physical, escapes the tax net,” he said.
He further assured that the law provides safeguards for businesses, including faster VAT refunds, protection for small enterprises, and provisions to ensure ethical conduct by tax officers.
“From this year, tax officers are expected to act within the law and the highest standards of ethics. Our goal is to build trust and transparency in Nigeria’s tax system,” he said.
The new tax laws, including the Nigerian Tax Administration Act, take effect from January 1, 2026.
“This reform is about creating a coherent fiscal system that supports business, attracts investment, and drives sustainable national development,” he stated.
Also speaking, the Dean of Faculty of Law at University of Lagos, Prof Abiola Sani, called on state governments to initiate their own tax reform efforts to address local challenges such as multiplicity of taxes and uncoordinated revenue collection.
Sani noted that while the federal tax reform is historic, state tax systems remain largely outdated, creating inconsistencies that burden businesses and investors.
“This is a federal tax reform, and we have been having federal reforms for a while. But I doubt if we have ever had any state tax reform. States must also focus on tax reform. Issues like multiplicity of taxes are sub-national matters, they won’t change unless states take action,” he said.
Sani explained that the new federal tax framework consolidates all major tax statutes into one comprehensive document, a first in Nigeria’s fiscal history.
“We now have four new statutes, the Nigerian Tax Act 2025, the Nigerian Revenue Service Act, the Joint Revenue Board Act, and another establishing a new institution called the Private Commons. For the first time, all tax types are contained in one statute, with over 200 sections, a landmark reform,” he said.
He encouraged lawyers, scholars, and tax practitioners to take personal responsibility for mastering the new laws, noting that tax expertise in Nigeria remains largely underdeveloped.
Sani added that while the reform is a “watershed moment” for Nigeria, fiscal sustainability requires long-term structural commitment from both federal and state governments.
