Nigeria's long-anticipated tax reform laws have officially been published in the government gazette, marking a significant milestone in modernizing the nation's fiscal landscape. These comprehensive reforms, signed into law on June 26, 2025, establish a new foundation for taxation, administration, and revenue collection in Africa's largest economy. The package consolidates four key legislations: the Nigeria Tax Act (NTA), 2025; the Nigeria Tax Administration Act (NTAA), 2025; the Nigeria Revenue Service (Establishment) Act (NRSEA), 2025; and the Joint Revenue Board (Establishment) Act (JRBEA), 2025. This consolidation aims for greater efficiency and ease of reference within the tax system.

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, confirmed the publication on his official X handle, highlighting the reforms' objectives. He stated that the new laws are designed to modernize Nigeria's tax system, improve compliance across all sectors, and foster a more business-friendly environment. The broader goals also include simplifying Nigeria’s intricate tax structure, providing crucial support for small businesses, attracting much-needed investment in critical sectors, and significantly boosting government revenues, thereby reducing the nation's historical over-dependence on oil.

The commencement of these laws is phased. The Nigeria Revenue Service (Establishment) Act (NRSEA) and the Joint Revenue Board (Establishment) Act (JRBEA) became effective immediately upon their signing on June 26, 2025. Conversely, the Nigeria Tax Act (NTA) and the Nigeria Tax Administration Act (NTAA) are slated to take effect on January 1, 2026. This staggered approach, as explained by Oyedele, ensures that the relevant tax and revenue institutions are fully prepared and adequately resourced ahead of the full rollout of the new tax regime in 2026.

Several key provisions within the new legislation are set to impact businesses across Nigeria. Notably, small businesses with an annual turnover below N100 million and total assets valued under N250 million are now fully exempted from corporate tax, providing significant relief and encouragement for growth. Furthermore, there is a provision for the potential reduction of corporate tax for large firms from the current 30% to 25%, subject to a presidential order issued upon the advice of the National Economic Council. The reforms also introduce a top-up tax threshold set at N50 billion in revenue for local firms and €750 million for multinational corporations. As an economic development incentive, eligible projects in priority sectors will receive an annual tax credit of 5%. To ease foreign exchange pressure and promote the use of the domestic currency, businesses engaging in foreign currency transactions now have the option to pay their taxes in Naira at the prevailing official exchange rate.

These reforms represent a major stride for Nigeria, which has been intensifying efforts to enhance its tax-to-GDP ratio, historically one of the lowest globally. Just a few months prior to these reforms, the tax-to-GDP ratio had risen to 13.5 percent from approximately 10.8 percent three years ago, though still considerably lower than South Africa’s 24.5 percent and the African average of 16 percent. A significant achievement of the new laws is the elimination of several obsolete tax rules, many of which dated back to the British colonial era and had long impeded economic growth, contributing to a complex and opaque tax system. Under the former regime, Nigeria collected over sixty taxes and levies that contributed minimally to the treasury, with limitations such as multiple taxation and a cumbersome collection process deterring investors. The country's tax gap, representing the difference between total taxes owed and collected, currently stands at about 70 percent, underscoring the urgency and necessity of these reforms.

Addressing public concerns, the Presidential Committee on Fiscal Policy and Tax Reforms recently clarified issues surrounding a proposed 5% fuel surcharge. Chairman Oyedele explicitly stated that essential items such as household kerosene, cooking gas (LPG), compressed natural gas (CNG), and clean or renewable energy products are exempt from this levy. This exemption is crucial to prevent the surcharge from exacerbating the cost-of-living burden on Nigerian citizens, demonstrating a commitment to protecting vulnerable populations.

The impact of these renewed efforts is already being observed. Nigeria’s tax collection for the first six months of the year, up to June, amounted to N14.3 trillion. This figure represents a robust 43 percent increase compared to the same period last year and has already surpassed more than half of the government’s total target for the entirety of 2025, signaling a positive trajectory for government revenues under the new framework.