By Aderonke Atoyebi

Understanding these new tax laws is essential for every Nigerian—it means knowing your rights, your responsibilities, and where to seek help when needed.
On June 26, President Bola Ahmed Tinubu signed into law a set of tax reform bills that will significantly change how taxes are collected and paid across the country. These reforms aim to simplify the tax system, improve fairness, and enhance the efficiency of tax administration. For many Nigerians, this marks a welcome shift from a system that has long been confusing and burdensome.
The reforms include four key laws: 1. Nigeria Tax Act 2. Nigeria Tax Administration Act, 3. Nigeria Revenue Service (Establishment) Act4. Joint Revenue Board (Establishment) Act

Nigeria Tax Act: This law consolidates several old tax statutes into a single, streamlined legal framework. In the past, overlapping tax rules made it difficult for individuals and businesses to know what taxes they owed or how to pay them.

With this Act, redundant taxes have been scrapped, and paying multiple taxes on the same income or goods is no longer permitted. Tax collection is now governed by consistent rules across the country. Whether you reside in Lagos or elsewhere, tax officers are now required to apply the same standards, eliminating double taxation and conflicting instructions from different tiers of government.

A significant provision of this Act addresses Value Added Tax (VAT). The VAT rate remains at 7.5%, but basic goods and services such as food, healthcare, education, housing rent, and public transportation are exempt or zero-rated.

This measure aims to reduce the financial burden on everyday Nigerians. The Act also strengthens the input VAT system, allowing businesses to recover VAT paid on purchases—an incentive that prevents double taxation and promotes business growth.

Another key requirement under this law is that all taxpayers—individuals and businesses alike—must obtain a Tax Identification Number (TIN).

This unique number will make tax registration easier, improve the tracking of payments, and enhance transparency and accountability in the system.

Nigeria Revenue Service (Establishment) Act: This Act replaces the former Federal Inland Revenue Service (FIRS) with the Nigeria Revenue Service, a new agency tasked with collecting all federal taxes, as well as other government revenues like fees and levies.

The agency will deploy modern technology to allow Nigerians to register, file tax returns, and make payments efficiently. This digital transformation is expected to reduce delays, errors, and opportunities for corruption in the tax process.

Joint Revenue Board (Establishment) Act: This law establishes a formal governance body to coordinate tax efforts among the federal, state, and local governments. The board will set standardised practices for all tax authorities, promoting consistency and reducing the overlapping demands and confusion that taxpayers often face.

To protect taxpayer rights, the Act also creates two important institutions: the Tax Appeal Tribunal and the Office of the Tax Ombuds. These bodies will offer avenues for resolving disputes, lodging complaints, and ensuring fairness in tax administration.

Relief Measures for Nigerians: The new reforms provide tangible relief for low-income earners and small businesses. Individuals earning up to ₦800,000 annually will be exempt from Personal Income Tax. Small and medium-sized enterprises (SMEs) with low turnover thresholds will benefit from simplified tax compliance rules and reduced tax obligations. These measures aim to support entrepreneurship and reduce the burden on small traders and business owners.

Implementation Timeline:
All provisions under these new laws will take effect from January 1, 2026. This transition period allows the government to conduct nationwide awareness campaigns to educate citizens and give tax officials time to undergo training and upgrade systems to support a smooth rollout.

These changes mark a significant shift in how Nigeria approaches taxation. For the first time, we are seeing a simplified, unified system that works for both the government and its citizens. The reforms reflect the vision of the Renewed Hope Administration—a Nigeria that is transparent, inclusive, and built for everyone.

Congratulations to all Nigerians as we take this bold step into a new era of tax responsibility and national development.

Aderonke Atoyebi is the Technical Assistant on Broadcast Media to the Executive Chairman of the Federal Inland Revenue Service.

Share on Facebook

Tweet

Follow us

Share

Share

Share

Share

Share