Nigeria has implemented a unified tax regime composed of four laws intended to broaden the tax base, reduce the strain on low-income earners and small businesses, and simplify tax administration. The reforms, effective immediately, proceed despite opposition claims of unauthorized changes. President Bola Tinubu defended the package as necessary to raise sustainable revenue, harmonise levies across 36 states, and fund infrastructure and social programs. Nigeria's tax-to-GDP ratio stands at 13.5 percent, well below EU and U.S. levels.
Nigeria Rolls Out Unified Tax Regime Promising Relief for Low Earners
Nigeria has promised a fairer tax system thanks to the reform (Light Oriye Tamunotonye)(Light Oriye Tamunotonye/AFP/AFP)
Nigeria on Thursday implemented a unified tax regime built around four laws signed in June. Officials say the package is designed to broaden the tax base, ease the burden on low-income earners and small businesses, and simplify tax collection and administration.
What the Reform Includes
The new framework comprises the Nigeria Tax Law, the Nigeria Tax Administration Law, the Nigeria Revenue Service (Establishment) Law, and the Joint Revenue Board (Establishment) Law. Tax expert Chukwuema Eze described the bundle to AFP as a "one-stop" framework intended to both increase revenue generation and lighten taxes on poorer earners.
Political Response
Opposition leader Atiku Abubakar has accused the government of inserting "illegal and unauthorized alterations" into the legislation and pushed for a delay. President Bola Tinubu rejected those charges as "premature" and "reactive," saying the reforms serve Nigeria's national interest and that no substantial problem has been shown that would warrant halting the process.
"No substantial issue has been established that warrants a disruption of the reform process," the president said in a statement.
Goals And Challenges
The administration says harmonising levies across Nigeria's 36 states will improve revenue collection and create a fairer, more growth-oriented tax system capable of funding infrastructure and social investments. Nigeria's tax-to-GDP ratio is reported at 13.5 percent, below the continental average and well under typical EU and U.S. levels of more than 25 percent — a gap the government says the reforms aim to narrow.
Taiwo Oyedele, who leads President Tinubu's tax reforms committee, called the package "a significant step toward building a simpler, fairer, and more growth-oriented tax system." Analysts will be watching implementation closely to see whether the changes broaden compliance without unduly burdening businesses or low-income households.
What Comes Next
The laws have taken effect amid political disagreement, and the practical impact will depend on how quickly the Nigeria Revenue Service and joint revenue boards roll out administrative changes, educate taxpayers, and resolve disputes over provisions claimed by critics to be unauthorized.
Help us improve.
