…Rumours, propaganda gas apprehension
…Indicators of financial rebound increase hope
Because the yr winds down, Nigeria is settling into a well-recognized end-of-year ritual: reflection combined with nervousness about what lies forward. In motor parks, markets, places of work and throughout social media timelines, one subject dominates conversations, the brand new tax regime scheduled to take impact in January.
For a lot of Nigerians, it has turn into each an emblem of concern and expectation: concern, as a result of taxation in Nigeria is usually related to coercion and hardship; expectation, as a result of after a bruising financial yr, there’s a longing that issues would possibly lastly start to show round.
From January 1, 2026, the federal authorities will start implementing 4 main legal guidelines, the Nigeria Tax Act, 2025; Nigeria Tax Administration Act, 2025; Joint Income Board of Nigeria (Institution) Act, 2025; and the Nigeria Income Service (Institution) Act, 2025. Collectively, they type one of the bold tax overhauls Nigeria has tried in many years.
On paper, the reforms promise sweeping modifications: over 50 focused exemptions and reliefs, the top of a number of taxation, the outlawing of touting and roadblocks used within the title of income technology, and a extra coordinated tax system throughout federal, state and native governments.
But, away from coverage paperwork and official briefings, a special narrative has taken maintain.
“From January, they may tax all the things,” is now an off-the-cuff chorus, repeated by merchants, artisans and even salaried employees. The brand new tax regime has taken on a lifetime of its personal, formed extra by rumours and propaganda than by the precise content material of the legal guidelines.
That concern was lately heightened by claims that the gazetted variations of the tax legal guidelines differed from what the Nationwide Meeting handed, a report later debunked by Taiwo Oyedele, chairman of the Presidential Fiscal Coverage and Tax Reforms Committee. Though the Nationwide Meeting ordered a regazetting of the legal guidelines, the episode strengthened public suspicion.
Economists say the confusion displays a deeper drawback.
“Within the absence of constant, clear public communication, hypothesis fills the vacuum,” mentioned a tax marketing consultant in Lagos. “Folks find yourself reacting to insurance policies that don’t even exist, whereas ignoring what the reform truly says.”
The nervousness is most intense within the casual sector, the place thousands and thousands already really feel overburdened, harassed by a number of levies, and largely excluded from social safety.
Authorities’s case: reduction, not punishment
Officers insist the fears are misplaced. Talking after a gathering with President Bola Tinubu in Lagos on Friday, Oyedele described the reforms as pro-people and growth-driven.
“These reforms are designed to supply reduction to the Nigerian individuals,” he mentioned.
In line with Oyedele, the largest beneficiaries might be abnormal employees. “Backside 98% of employees will see both no PAYE tax or decrease taxes to be paid,” he said.
Small companies, he added, would additionally achieve considerably. “97% of them might be exempted from company earnings tax, VAT, withholding tax,” whereas even massive corporations are anticipated to pay much less underneath the revised framework.
The aim, Oyedele argued, is to not squeeze more cash out of a struggling inhabitants however to restructure the system to assist progress, inclusion and shared prosperity.
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“The entire concept is to attempt to promote financial progress, inclusivity, in addition to shared prosperity for our individuals,” he mentioned, expressing optimism concerning the rollout. “We’re truly excited on the progress we’re making and we’re wanting ahead to January 1st, 2026.”
In his view, sustainable income will come from financial enlargement, not increased charges. “We consider that over time you get income from progress when the economic system is rising. Folks pay not as a result of the tax fee has gone up however as a result of the bottom has elevated,” Oyedele mentioned.
Past income, he mentioned the reforms are anticipated to enhance Nigeria’s weak tax tradition and compliance. “If folks that weren’t paying earlier than begin paying, they usually’re not low-income earners, not solely do you get extra income, you get equity for society,” he added.
Why Nigerians stay skeptical
Regardless of these assurances, mistrust runs deep. For many years, taxation in Nigeria has been synonymous with aggressive collections, overlapping levies and little proof of service supply in return. For a lot of residents, taxes have felt extra like punishment than civic responsibility.
Simon Samson, chief economist at ARKK Economics and Information Restricted, says a lot of the present nervousness is pushed by misinformation.
“Individuals are usually anxious about new issues, and lack of full data exacerbates this,” he mentioned. “Folks assume this new tax regulation would make them pay extra taxes. Whether it is about charges, that isn’t right.”
What is going to change, Samson defined, is the dimensions of the tax web. “Extra individuals, significantly companies and people within the casual sector, might be introduced into the tax web. That doesn’t imply these already paying taxes can pay increased charges.”
On the long-standing drawback of a number of taxation, Samson pointed to the Joint Income Board Act as a possible game-changer.
“The JRB would coordinate all taxes and guarantee everybody will get a good shake,” he mentioned. “By eliminating overlapping levies and decreasing inefficiencies, evasion and harassment, the reforms mustn’t worsen the price of residing if correctly carried out.”
The Abuja-based lecturer added that new mechanisms resembling tax ombudsmen and tribunals might protect taxpayers, a pointy distinction to previous practices.
Past hardship, in direction of stability?
Away from the noise, there are tentative indicators that Nigeria’s economic system could also be stabilising. Stress on international change markets has eased barely, companies report improved entry to foreign exchange, and analysts are predicting additional inflation moderation and renewed investor curiosity.
For some entrepreneurs, these shifts are already tangible, feeding a quiet hope that the painful changes of 2025 could start to yield outcomes.
If carried out effectively, Samson believes the tax reforms might assist long-term stability moderately than short-term hardship. Diversifying income away from oil would scale back Nigeria’s publicity to world value shocks, whereas increased thresholds and exemptions for MSMEs might assist companies thrive and appeal to funding.
“Harmonisation of tax legal guidelines would additionally enhance investor and client confidence,” he mentioned, “and that’s important for progress.”
On rebuilding public belief, the economist mentioned the federal government should break from previous practices that related taxation with coercion moderately than citizenship. He known as for a clear and corruption-free tax administration, larger accountability to taxpayers and clearer hyperlinks between taxes collected and public tasks delivered.
“Tying taxes to seen tasks would assist individuals see the outcomes of their contributions,” he mentioned, stressing that authorities ought to incentivise compliance moderately than depend on power. In line with him, solely by demonstrating equity and accountability can tax compliance start to be seen as a civic responsibility moderately than an imposed burden.
Modest hopes for a fragile yr forward
For a lot of Nigerians, expectations for the brand new yr are cautious moderately than grand: readability as an alternative of confusion, stability as an alternative of fixed shocks, and respiratory house after years of pressure.
Younger professionals are watching carefully. For them, financial restoration isn’t an summary concept however one thing tied to jobs, salaries and the power to plan a future.
Because the countdown to the brand new yr begins, Nigeria stands at a well-recognized crossroads, between concern formed by previous disappointments and hope fueled by the promise of reform. Whether or not the brand new tax regime turns into a turning level or one other missed alternative will rely much less on the legal guidelines themselves, and extra on how transparently, pretty and humanely they’re carried out.
