The brand new tax regime, anticipated to return into power on 1 January 2026, will give multinationals and native corporations a 5‑per‑cent annual tax credit score, the chairman of the Presidential Fiscal Coverage and Tax Reform Committee, Taiwo Oyedele, has stated.
The coverage features a 5‑per‑cent annual tax credit score for investments in eligible precedence sectors; high‑up tax exemption thresholds of fifty billion for native companies and €750 million for multinational corporations; and an choice for companies concerned in overseas‑foreign money transactions to remit taxes in naira on the official alternate fee.
The reform, described by coverage consultants as one of the vital formidable in a long time, is designed to “simplify taxation, broaden the tax base, and enhance income technology” with out stifling enterprise progress, significantly amongst micro, small and medium‑sized enterprises (MSMEs).
With MSMEs contributing “over 48 per cent of Nigeria’s GDP” and using greater than “80 per cent of the workforce”, the reform’s influence on this section is anticipated to be profound. Analysts say that if correctly carried out, it may reshape compliance tradition, promote formalisation, and drive inclusive progress.
Talking in an interview in Lagos, Taiwo Oyedele stated the reform marks a major turning‑level in how the Nigerian authorities views taxation, not merely as a income supply however as a “social contract” between residents and the state.
“Taxation is not only a fiscal instrument; it’s a foundational pillar of the social contract between residents and authorities. When residents see transparency and accountability in taxes, compliance naturally follows,” Oyedele stated, emphasising the necessity for stronger tax literacy.
Oyedele described Nigeria’s present public understanding of taxation as “close to zero” and urged the federal government to accentuate training and advocacy amongst “company entities, SMEs, and the casual sector” to enhance compliance and belief.
Beneath the brand new framework, corporations with an annual turnover under ₦100 million and stuck property underneath ₦250 million shall be absolutely exempted from company tax. This transfer goals to ease the compliance burden on micro and small companies.
The company tax fee for bigger companies will drop from 30 per cent to 25 per cent, pending presidential approval primarily based on suggestions by the Nationwide Financial Council.
Oyedele famous that these changes are designed to create a fairer, extra easy, and extra clear system that rewards compliance and funding, whereas lowering the multiplicity of taxes which have lengthy plagued Nigerian companies.
He additionally drew consideration to gaps in fiscal administration, citing the continued use of outdated withholding‑tax techniques and weak expenditure‑monitoring mechanisms.
He advocated the adoption of company‑governance codes within the public sector to institutionalise fiscal self-discipline, stating that the federal government must be ruled by the identical ideas it calls for from enterprise: transparency, accountability, and worth for cash.
He urged stronger public‑expenditure monitoring and unbiased audits to stop monetary leakages.
In the meantime, the Affiliation of Small Enterprise House owners of Nigeria (ASBON) has said that for the reforms to succeed, the federal government should additionally sort out the difficulty of a number of and casual taxation, particularly on the native authorities degree.
It referred to as for council taxes to be eradicated to permit the brand new tax reforms to succeed.
ASBON recognised the advantages of the brand new tax regime for smaller companies however criticised inadequate stakeholder engagement and potential burdens on some enterprises.
Talking in a media chat, ASBON president, Dr Femi Egbesola, criticised the federal authorities for insufficient engagement with SMEs on coverage issues, noting that the brand new tax reforms ought to deal with bureaucratic hurdles.
ASBON leaders highlighted challenges in Nigeria’s tax system, such because the multiplicity of taxes, complexity and poor administration, which can hinder enterprise operations.
He warned that, regardless of reforms, macro‑financial instability and features just like the revised Capital Beneficial properties Tax may improve poverty and non‑compliance.
ASBON acknowledged advantages equivalent to revenue‑tax exemption for small companies with turnover as much as ₦50 million, a consolidated 4‑per‑cent improvement levy, and expanded zero‑rated VAT on important objects.
The ASBON boss really useful a collaborative method to tax coverage, advocating for inclusive implementation, simplified processes, and a supportive enterprise surroundings.
ASBON maintained cautious optimism, recognising useful provisions in new tax insurance policies whereas urging higher authorities collaboration and deal with small companies’ financial realities.
The Centre for the Promotion of Non-public Enterprise (CPPE) and the Civil Society Legislative Advocacy Centre (CISLAC) have each counseled the reforms, describing them as a daring step towards fiscal modernisation and equity.
Chairman of CPPE, Dr Muda Yusuf, stated the reforms would make Nigeria’s tax system “extra equitable, environment friendly, and clear”.
“One of many largest good points is the discount within the multiplicity of taxes, which has lengthy annoyed Nigerian companies,” Yusuf stated. “A number of redundant levies have been eliminated, whereas new incentives have been launched to draw funding and stimulate manufacturing.”
He additionally identified that the non-public revenue tax threshold has been expanded, exempting low‑revenue earners from PAYE obligations — a transfer he believes will ease the monetary stress on households and small companies.
CISLAC government director Auwal Musa Rafsanjani urged the federal government to make sure transparency, accountability, and equity in implementing the reforms.
He warned that the success of the brand new tax legal guidelines will rely upon whether or not revenues are used for the general public good moderately than misplaced by corruption or administrative loopholes.
“Nigeria is shedding vital income to tax evasion, avoidance, and weak enforcement,” Rafsanjani stated. “We additionally see a number of companies competing as tax collectors, resulting in exploitation and twin taxation. A unified, clear system is urgently wanted.”
He added that girls and weak teams usually endure unfair taxation, stressing {that a} fairer regime would assist right such social imbalances.
Rafsanjani referred to as on the Nationwide Meeting, significantly the Senate, to deepen public sensitisation, noting that many Nigerians nonetheless lack ample understanding of the brand new legal guidelines.
Specialists agree that whereas the 2026 tax reform will increase Nigeria’s fiscal base, its success will rely upon public belief, coverage consistency, and accountable governance.
As Nigeria strikes towards implementation, Oyedele’s message stays clear: “Taxation is a shared accountability, a social contract that may solely work when each authorities and residents maintain up their ends of the cut price.”
