Tax

By Isah Kamisu Madachi

The furore over whether the tax laws should be implemented has passed. The nationwide discussions about the discrepancy between the gazetted version and the version passed by the National Assembly have also faded. January 1 has come and gone, and many changes, especially around digital transactions, are already beginning to manifest, as provided for under the new tax law. The consolidated tax laws under the tax reform regime are now in force, and as a citizen, I hope they are backed by strong accountability mechanisms and oversight to ensure that collected taxes are used for the right purposes.

However, I observed a major policy gap in the final moments of the law’s implementation, which, if left unaddressed, could not only undermine the law’s effectiveness but also cause greater harm to its objectives. If I were to estimate, I would say that less than 5% of Nigerians understand what the new tax law contains, how it works, and what it does not do. This knowledge gap has created a fertile ground for misinformation, disinformation, and fake news. 

In the past few days, I have personally encountered many people who told me they had withdrawn all the money saved in their bank accounts and converted it to cash. They said they no longer trust cashless transactions. Some were told that every transaction, regardless of the amount, would incur a flat ₦50 fee. 

Others were also told that keeping money in their accounts would result in monthly deductions, or that 5% of their savings would be deducted each month for tax. None of these claims could be traced to any provision of the law, yet they are widely shared with absolute confidence.

Another unfortunate experience was my encounter with a young and vibrant POS agent from whom I regularly withdraw cash. He told me he had shut down his business. According to what he was told, every ₦500,000 transaction would attract ₦15,000 in tax, every ₦5 million would attract ₦250,000, and any transaction above ₦1,000 would automatically be charged ₦50. 

He was also told these deductions would be accumulated and collected at the end of the month, and that’s what frightened him most. He used to make transactions averaging ₦50 million per month. With this information, he now chose to abandon his livelihood. Whether these claims are true or false is not the most important when one considers the damage such misinformation is already causing.

There is also a growing narrative, particularly on social media, that every transaction must now be clearly explained in the narration section. People are being told they must specify whether the money is for savings, shopping, gifts, rewards, profit, or salary. A counter-narrative exists saying this is false. Sadly, the average Nigerian does not know which version to believe. In an environment where official clarity is weak, rumours travel faster than facts.

If I were to document all the misinformation circulating about the new tax law, it would take more than a newspaper opinion. New versions emerge almost every hour. The most alarming outcome of this misinformation is how people are altering their economic behaviour. Businesses are being abandoned. Trust in digital finance is being eroded. People are deserting the cashless system out of fear, believing their money is no longer safe in the banking system.

The only effort I am aware of to address this information gap is the reported engagement of social media influencers to enlighten the public. If this effort has begun, it is not enough. If it has not, then it is urgently needed. But beyond influencers, one must ask: what happened to local radio stations? Radio remains the primary source of information for millions of Nigerians, especially in rural areas. The law should be broken down and discussed in local languages on local radio. 

There are also a proliferation of online television platforms operating across social media spaces. The tax reform committee should collaborate strategically with them to explain the law in simple, creative ways. Influencers alone cannot carry this burden. Public communication must be broader, more structured, and more deliberate.

The Federal Ministry of Information also plays a central role here. There is an urgent need for a simplified version of the tax law, as well as translations into local languages, and for their dissemination in collaboration with state ministries of information. Students, heads of households, community leaders, traders, and small business owners must all be deliberately engaged. Town hall meetings, especially in peri-urban communities, should be organised. They are necessary to counter the scale of misinformation already circulating.

When people are largely unaware of what a law entails, dysfunction is inevitable. The law may exist, but its implementation will be undermined by fear, resistance, and unintended consequences. By the look of things, those who understand the new tax law are currently the fewest in Nigeria, even among the highly educated. If this gap remains wide open, the law may struggle to achieve its intended outcomes.

Now that it’s here, I hope, and I genuinely pray, that if effectively implemented and properly communicated, the new tax laws will become one of the long-awaited channels for fixing many of Nigeria’s challenges. But without deliberate public education, I doubt if the policy can yield the desired result.

Isah Kamisu Madachi is a public policy enthusiast and development practitioner. He writes from Abuja and can be reached via: isahkamisumadachi@gmail.com.

By Oladoja M.O

Nigeria’s new tax law arrives at a moment when questions of domestic resource mobilisation have moved decisively from the margins of fiscal discourse to its centre. The reform is ambitious in both scope and intent. It consolidates previously fragmented statutes, modernises tax administration, strengthens compliance mechanisms, and expands the state’s technical capacity to mobilise revenue in an increasingly constrained macroeconomic environment. 

Read on its own terms, the law represents a serious effort to stabilise public finance and reduce long-standing inefficiencies in the tax system. But tax laws, particularly of this magnitude, should not be mere instruments of collection, but rather reflections of what a state understands taxation to be for. 

When examined from the perspective of national health financing, Nigeria’s new tax law reveals not hostility to health, nor ignorance of its importance, but striking institutional restraint, a deliberate decision to keep taxation largely neutral to the direct financing of public health.

This neutrality is especially significant because it runs counter to the evolving global understanding of domestic resource mobilisation. In contemporary public finance, DRM is no longer conceived simply as the ability of a state to raise revenue, but as its capacity to do so in a manner that deliberately underwrites social protection, safeguards human capital, and reduces long-term economic vulnerability, where health occupies a central place. 

Ill-health is not a random misfortune but a predictable social risk, one that drives household impoverishment, reduces labour productivity, and places sustained pressure on public finances. For this reason, many countries have increasingly integrated health financing into their tax systems, whether through general taxation, earmarked levies, or hybrid arrangements that link tax administration directly to social insurance and prevention financing.

It is against this backdrop that Nigeria’s new tax law must be read. 

The law unquestionably strengthens the means of mobilisation. A unified tax administration framework, enhanced enforcement powers, clearer compliance obligations, and improved data coordination substantially upgrade the state’s fiscal machinery. In theory, this expanded administrative capacity could support innovative approaches to financing social sectors, including health. In practice, however, the law exercises marked caution. Health appears within the tax framework, but only at the margins, and only in forms that preserve the traditional separation between revenue mobilisation and social sector financing.

This pattern becomes evident when examining how health-related elements are treated across the law. Contributions to the national health insurance scheme are recognised as allowable deductions for personal income tax purposes. This recognition is not insignificant; it affirms health insurance contributions as socially legitimate expenditures deserving of fiscal relief. Yet the logic remains passive. The tax system responds only after individuals have already contributed. It does not actively mobilise resources for health, nor does it deploy its collection infrastructure to expand coverage, pool risk, or subsidise access. The fiscal relationship ends at recognition, not generation.

A similar logic governs the treatment of consumption taxes. Essential medicines, pharmaceuticals, and certain medical equipment continue to benefit from favourable VAT treatment. These provisions are defensible on equity grounds, particularly in a system where out-of-pocket spending remains high. But from a financing perspective, their effect is limited. They shield households from additional burden, yet they do not generate fiscal space for the health system. Again, health is insulated from taxation, not financed through it.

The clearest illustration of this restrained approach lies in the treatment of excise duties on tobacco, alcohol, and sugar-sweetened beverages. These taxes are frequently framed as “sin taxes,” ostensibly justified by their potential to alter harmful consumption patterns. In principle, excise taxation is meant to operate through a behavioural channel: higher prices reduce consumption, lower consumption reduces disease burden, and reduced disease burden lowers long-term health expenditure. In Nigeria’s case, however, this logic remains largely theoretical.

First, the excise rates themselves are modest. The levy on sugar-sweetened beverages, for instance, is widely recognised as too low to produce a meaningful price shock that would alter consumption behaviour. Similar concerns apply to alcohol and tobacco, where cultural entrenchment, affordability, and illicit trade further blunt the intended deterrent effect. 

Second, there is no publicly available evidence demonstrating that consumption of these products has declined since the introduction or adjustment of excise duties. On the contrary, available market indicators and anecdotal trends suggest that consumption has increased. Crucially, the state does not appear perturbed by this outcome. Higher consumption translates into higher excise revenue, and excise duties, in practice, function as reliable inflows to the general federal pool.

This reveals a deeper truth about how sin taxes are governed in Nigeria. Despite their rhetorical association with public health, excise duties are not treated as health instruments. They are treated as revenue lines. There is no systematic effort to measure behavioural change, no routine publication of consumption data linked to tax policy, and no formal evaluation of health impact. In policy terms, a behavioural instrument that is not measured is indistinguishable from a revenue instrument. 

The absence of evidence of reduced consumption is not merely a data gap; it indicates that behavioural change is not being actively pursued as an objective.

From a health financing perspective, this has serious implications. Excise taxes generate revenue, yet none of that revenue is structurally linked to health financing. No portion is dedicated to prevention programmes, health insurance subsidies, or system strengthening. The public bears the health consequences of continued consumption, rising non-communicable diseases, increasing treatment costs, and productivity losses, while the fiscal gains accrue centrally, unconnected to the sector that absorbs the burden. In effect, Nigeria taxes harm, tolerates its persistence, and finances neither its prevention nor its consequences through the tax system.

This outcome is unlikely to be accidental. The new tax law is too carefully constructed for its silences to be incidental. Rather, it reflects a broader fiscal philosophy that prioritises flexibility, central discretion, and revenue pooling over sector-specific commitments. Earmarking, even in its softer forms, constrains the treasury’s freedom to allocate resources across competing priorities. From a public health financing standpoint, this caution is costly. It leaves health structurally dependent on discretionary budgets, weak insurance enforcement, donor support, and household spending, even as the state’s revenue-collection capacity improves.

The result is a growing asymmetry. Nigeria now possesses an increasingly sophisticated tax apparatus, but lacks a corresponding approach to financing social risk. Revenue mobilisation is advancing, but allocation logic remains largely unchanged. Health remains acknowledged but peripheral, recognised, accommodated, and indirectly supported, yet excluded from the core architecture of taxation.

None of this implies that the new tax law should have transformed itself into a health financing statute. No! Tax laws cannot, and should not, bear the full weight of social policy. But in an era where domestic resource mobilisation is increasingly framed as a means of financing development rather than merely sustaining government, the continued treatment of health as fiscally incidental is striking. The administrative infrastructure now exists to do more than collect revenue efficiently. What is missing is the institutional decision to deploy that capacity deliberately to protect households from the economic consequences of ill-health.

The most important lesson of Nigeria’s new tax law for national health financing, therefore, lies not in what it includes, but in what it leaves unresolved. The law strengthens the state’s ability to mobilise resources, yet remains silent on whether that capacity should be harnessed to address one of the most predictable and economically damaging social risks. As Nigeria deepens its commitment to domestic resource mobilisation, the critical question will not simply be how much revenue can be raised, but how intentionally that revenue is aligned with protecting human capital. A tax system that improves efficiency without strengthening social purpose risks becoming technically impressive but socially thin.

Oladoja M.O writes from Abuja and can be reached at: mayokunmark@gmail.com.

By Abdullahi Mukhtar Algasgaini

The Nigeria Revenue Service (NRS) has issued a statement to correct what it calls misleading reports about the introduction of Value Added Tax (VAT) on banking services.

In a press release dated January 15, 2026, the NRS categorically denied that the Nigeria Tax Act had newly imposed VAT on banking fees, commissions, or electronic transfer charges.

The Service clarified that VAT has always been applicable to fees for services rendered by banks and other financial institutions under the country’s longstanding VAT regulations.

It stated there is no new tax obligation for customers arising from recent legislation.

The NRS urged the public and all stakeholders to disregard the misinformation and to depend only on its official channels for accurate tax information.

By Muhammad Abubakar

The Nigeria Revenue Service (NRS) has officially unveiled its new institutional logo, formally marking its transition from the Federal Inland Revenue Service (FIRS) to a newly established revenue authority.

The unveiling ceremony took place in Abuja on Wednesday and was announced in a statement by Dare Adekanmbi, special adviser to the chairman of the NRS.

Speaking at the event, Zacch Adedeji, executive chairman of the NRS, described the new brand identity as a major milestone in the ongoing reform of Nigeria’s revenue administration framework, reflecting a renewed mandate and institutional vision.

Adekanmbi noted that the service became operational after President Bola Tinubu signed the Nigeria Revenue Service Establishment Act 2025 in June, paving the way for the transition from FIRS to NRS.

The new logo, officials said, symbolises efficiency, accountability, and a modernised approach to revenue generation in Nigeria.

By Isah Kamisu Madachi

For over a week now, flipping through the pages of Nigerian newspapers, social media, and other media platforms, the dominant issue trending nationwide has been the discovery of significant discrepancies between the gazetted version of the Tax Laws made available to the public and what was actually passed by the Nigerian legislature. Since this shocking discovery by a member of the House of Representatives, opinions from tax experts, public affairs analysts, activists, civil society organisations, opposition politicians, and professional bodies have been pouring in.

Many interesting events that could disrupt the pace of the debate have recently surfaced in the media. Yet the Tax Law discussion persists because public interest is deeply entrenched in the contested laws. However, while many view the issue from angles such as a breach of public trust, a violation of legislative privilege by the executive council, the passage of an ill-prepared law and so on, I see it from a different, narrower, and governance-centred perspective.

What brought this issue to public attention was an alarm raised by Hon. Abdulsammad Dasuki, a Member of the House of Representatives from Sokoto State, during a House plenary on 17 December 2025. He called the attention of the House to what he identified as discrepancies between the gazetted version of the Tax Laws he obtained from the Federal Ministry of Information and what was actually debated, agreed upon, and passed on the floor of both the House and the Senate. He requested that the Speaker ensure all relevant documents, including the harmonised versions, the Votes and Proceedings of both chambers, and the gazetted copies, are brought before the Committee of the Whole for scrutiny. The lawmaker expressed concern over what he described as a serious breach of his legislative privilege.

Beyond that, however, my concern is about how safe and protected Nigerians’ interests are in the hands of our lawmakers at the National Assembly. This ongoing discussion raises a critical question about representation in Nigeria. Does this mean that if Dasuki had also been indifferent and had not bothered to utilise the Freedom of Information Act 2011 to obtain the gazetted version of the laws from the Federal Ministry of Information, take time to study it, and make comparisons, there would have been no cause for alarm from any of Nigeria’s 360 House of Representatives members and 109 senators? Do lawmakers discard the confidence we reposed in them immediately after the election results are declared?

This debate serves a latent function of waking us up to the reality of the glaring disconnect between public interest and the interests of our representatives. The legislature in a democratic setting is a critical institution that goes beyond routine plenaries that are often uninteresting and sparsely attended by the lawmakers. It is meant to be a space for scrutiny, deliberation, and the protection of public interest, especially when complex laws with wide social consequences are involved. 

We saw Sen. Ali Ndume in a short video clip that recently swept the media, furiously saying during a verbal altercation with Sen. Adams Oshiomhole over ambassadorial screening that “the Senate is not a joke.” The Senate is, of course, not a joke, and neither should the entire National Assembly be. Ideally, it should not be a joke to the legislators themselves or to us. Therefore, we should not shy away from discussing how disinterested those entrusted with the task of representing us, and primarily protecting our interests, appear to be in our collective affairs.

It is not a coincidence that, even before the current debate over the tax reform law, it has continued to generate controversy since its inception. It also does not take quantum mechanics to understand that something is fundamentally wrong when almost nobody truly understands the law. Thanks to social media, I have come across numerous skits, write-ups, and commentaries attempting to explain it, but often followed by opposing responses saying that the authors either did not understand the law themselves or did not take sufficient time to study it.

The controversy around the gazetted Tax Reform Laws should not end with public outrage or media debates alone. It should prompt deeper reflection on how laws are made, scrutinised, and defended in Nigeria’s democracy. A system that relies on the alertness of a single lawmaker to prevent serious legislative discrepancies is neither resilient nor reliable. Representation cannot be occasional, and vigilance cannot be optional. 

Nigerians deserve a legislature that safeguards their interests, not one that notices breaches only when a few individuals choose to be different and look closely. If this ongoing debate does not lead to formidable internal checks and a renewed sense of responsibility among lawmakers, then the problem is far bigger than a flawed gazette. When legislative processes fail, it is ordinary Nigerians who bear the cost through policies they did not scrutinise and consequences they did not consent to.

Isah Kamisu Madachi is a public policy enthusiast and development practitioner. He writes from Abuja and can be reached via: isahkamisumadachi@gmail.com.

By Muhammad Abubakar

The National Identification Number (NIN) issued by the National Identity Management Commission (NIMC) will automatically function as a Tax Identification Number (Tax ID) for Nigerians starting from January 2026, the Federal Inland Revenue Service (FIRS) has announced.

According to the FIRS, the policy is part of broader efforts to harmonise government databases, improve tax administration, and expand the country’s tax net. By linking tax records directly to the NIN, authorities aim to reduce duplication, enhance compliance, and make it easier for individuals and businesses to fulfil their tax obligations.

Officials said the integration would streamline identification across government services while strengthening transparency and efficiency in revenue collection.

Nigerians are therefore encouraged to ensure their NIN details are accurate and up to date ahead of the January 2026 implementation.

The move aligns with ongoing digital reforms by the Federal Government to modernise public administration and improve service delivery nationwide.

By Muhammad Abubakar

The Federal Government has removed the 5% excise duty on telecommunications services in Nigeria.

The tax, introduced under the administration of former President Muhammadu Buhari, was to be applied on both voice and data services. It drew strong opposition from telecom operators and consumer groups.

Executive Vice Chairman of the Nigerian Communications Commission (NCC), Aminu Maida, said President Bola Ahmed Tinubu ordered its removal during discussions on the recently passed Finance Act.

The decision is expected to provide relief to over 171 million active telecom subscribers, who have also faced a 50 per cent tariff increase earlier this year.

By Zayyad I. Muhammad

On Thursday, June 26, 2025, President Bola Tinubu signed into law four landmark tax bills that the National Assembly had recently passed.

Whether one agrees or disagrees with Tinubu’s style of governance, the new tax bills signal a new beginning for Nigerians, businesses, and governments, both at the subnational and federal levels.

Some key  highlights of the Reforms are:

Elimination of Duplication in Tax Collection: One major reform is the establishment of the new Nigeria Revenue Service (NRS), which will now collect revenues that were previously handled by numerous agencies, such as the Nigeria Customs Service, Nigerian Ports Authority (NPA), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NIMASA, and others.

Tax Exemption for Low-Income Earners: With the new provisions, individuals earning ₦800,000 or less per year are now fully exempt from income tax. This is a masterstroke, especially for many people in the North. It removes a huge burden and creates space for their small and medium-sized businesses to grow and flourish.

New Personal Income Tax Rate: 

Only those earning above ₦50 million annually will be required to pay the new 25% personal income tax rate. This is both fair and reasonable.

Another significant win for the North, which has the highest concentration of impoverished people in Nigeria, is the removal of VAT on essential goods and services, including school fees, medical services, food, pharmaceuticals, and electricity. This is a significant relief for the poor and small to medium-sized businesses.

The corporate tax rate will now be reduced from 30% to 25%, and small businesses will be fully exempt from paying income tax.

The controversial VAT issue has now been ‘fairly’ settled, and again, it’s a big win for the North, which had previously raised concerns. The new revenue-sharing formula is as follows:

Federal Government: 10%

States: 55%

Local Governments: 35%

Even more importantly, the VAT sharing formula has been revised in a way that favours the North. If northern states seize the opportunity to harness and develop their economies and markets, especially in agriculture, they will benefit significantly.

The new sharing criteria are:

50% of VAT is shared equally among all states

20% is based on population

30% is based on where goods/services are consumed

One of the most important features of these tax reforms is how they protect and uplift the poor and small businesses,especially in the North, where:

About 65% of Nigeria’s poorest people live

Over 52% of the country’s states are located

More than 60% of the population resides

Nearly 70% of Nigeria’s landmass is found

And almost 80% of agricultural production takes place

It’s time for northern states to tap into local knowledge and deploy homegrown experts to thoroughly study the four landmark tax laws in line with each state’s peculiarities and needs, yet with the whole North as the unifying objective.

If well studied and strategically implemented, Tinubu’s new tax reforms could be the silver bullet the North has been waiting for.

They offer fiscal justice, decentralisation of revenue, protection for the poor, incentives for businesses, and a practical opportunity to lift millions out of poverty.

However, as always, it will take visionary leadership, technical expertise, and political will to translate policy into meaningful impact. The opportunity is here. The North must not waste it.

Zayyad I. Muhammad writes from Abuja via zaymohd@yahoo.com.

By Abdullahi Mukhtar Algasgaini

The Speaker of the House of Representatives, Rt. Hon. Abbas Tajudeen, has stated that Nigeria cannot achieve significant progress unless its tax systems are reformed.

Speaking on Thursday in Abuja during a courtesy visit by the leadership of the Chartered Institute of Taxation of Nigeria (CITN), the Speaker noted the country’s struggles with revenue generation, adding that Nigeria ranks among the lowest in Africa in terms of tax collection.

Abbas stated that for businesses to thrive and the country to develop, there was an urgent need to overhaul the current tax system.

He explained that the House had recently passed the second reading of four tax reform bills submitted by President Bola Ahmed Tinubu, which he described as a historic move.

Abbas assured the CITN delegation that all relevant stakeholders, including the institute, would be engaged during public hearings on the proposed legislation by the end of February.

“I am one of those who believe that this country can never move forward if our tax systems remain the way they are,” Abbas said, stressing the importance of reforming the system to generate sufficient revenue.

He further pointed out that Nigeria’s tax system has not been restructured to meet the country’s development needs, particularly in terms of sectoral growth.

The Speaker also noted that the CITN’s goals align with the House’s 10th Legislative Agenda, and pledged collaboration with the institute to move Nigeria forward.

Earlier, the President of CITN, Mr. Samuel Olushola Agbeluyi, FCTI, mentioned that the institute would be celebrating its 42nd anniversary in February.

He highlighted CITN’s extensive reach, with 48 district societies worldwide, including in the U.S. and the U.K. Agbeluyi also praised the institute’s contributions to tax reforms, including the introduction of the Finance Act under the leadership of former President Muhammadu Buhari.

He further addressed the need for a strong attitude towards taxation, citing how the Nigerian National Petroleum Company Limited (NNPCL) failed to remit adequate revenue to the Federation Account, leaving the Federal Inland Revenue Service (FIRS) to intervene.

In his closing remarks, Agbeluyi stated that the purpose of the visit was to strengthen the relationship between CITN and the House of Representatives, ensuring that both entities work together for the nation’s collective progress.

The CITN delegation included senior members such as Prof. Salihu Mukailu, Prof. Mohammed Okara Mainoma, and Dr. J.K. Naiyeju, a former president of the institute, along with several other council members and aides.

By Uzair Adam 

The Ulama Forum in Nigeria has expressed strong opposition to the proposed Nigeria Tax Bill (NTB) 2024 and Nigeria Tax Administration Bill (NTAB) 2024, currently before the National Assembly. 

In a joint statement signed by its Convener, Aminu Inuwa Muhammad, and Secretary, Engr. Basheer Adamu Aliyu, on Monday, the forum raised concerns about the bill’s implications on equity, federalism, and economic fairness.  

The statement criticized the bills for transferring the largest share of Value Added Tax (VAT) revenue from consumption or generation areas to states hosting production entities’ headquarters. 

“VAT is a consumption tax. Transferring its revenue from the areas where it is generated to the locations of head offices undermines fiscal equalization, widens income disparity, and risks social disharmony,” the forum said.  

The forum also noted that the bills threaten the survival of critical agencies such as TETFUND, NITDA, and NASENI by proposing a gradual reduction in their funding through the Development Levy. 

“Phasing out these agencies will jeopardize infrastructure, research, and capacity-building efforts in our tertiary institutions, leaving students to bear exorbitant tuition fees under an ill-conceived student loan scheme,” the statement warned.  

The forum accused the government of rushing the bills without sufficient public scrutiny, alleging that they align with a long-term reform agenda by international financial institutions such as the World Bank and IMF. 

“There is room to suspect that these bills are part of the World Bank’s 10 to 15-year reform agenda, threatening our sovereign independence,” the forum alleged.  

To address these issues, the Ulama Forum urged the National Economic Council and State Governors to intervene and demand a thorough review. 

“The concerns of state governors and other stakeholders must be addressed to give these bills credibility and avoid perceptions of external imposition,” it added.  

The forum recommended that the bills be subjected to extensive public debate and expert analysis to ensure they align with Nigeria’s federal structure and national interest. 

It called on members of the National Assembly to act in the best interests of their constituencies and resist any pressure to pass the bills in their current form.  

“We urge public-spirited individuals and organizations to rise against this threat to fair and even development. The VAT-sharing formula and the proposed bills strike at the heart of federal constitutionalism,” the forum concluded.  

The Ulama Forum emphasized the need for justice and fairness, calling for the bill’s withdrawal to allow for broader discourse and a national consensus.