Nigeria is pursuing a two-pillar tax reform technique geared toward elevating its tax-to-GDP ratio to 18 p.c, combining legislative restructuring with digital infrastructure to drive automated, data-led compliance.
Timothy Siloma, companion in tax reporting and technique at PwC Nigeria, mentioned the reform addresses long-standing structural weaknesses within the nation’s income framework, together with a heavy dependence on oil receipts, a low tax-to-GDP ratio, and a excessive value of tax assortment.
“The nationwide tax-to-GDP ratio is about 10 p.c, in contrast with the African common of 18 p.c. In the meantime, the price of tax assortment stands at 4 p.c, far above the worldwide common of 1 p.c. That is clearly unsustainable,” Siloma mentioned at a PwC webinar on Tax Know-how and E-invoicing.
The primary pillar of the reform focuses on simplifying the tax legal guidelines. Authorities plan to break down roughly 60 separate taxes right into a single-digit variety of levies to cut back fragmentation and enhance the benefit of doing enterprise.
“We need to push the nationwide tax-to-GDP ratio to 18 p.c, collapse roughly 60 taxes all the way down to a single digit, and essentially enhance the benefit of doing enterprise,” Siloma mentioned.
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The second pillar centres on digital integration. Underneath this framework, tax authorities will depend on real-time knowledge flows throughout companies, making a unified ecosystem that enhances visibility over financial exercise.
“Knowledge is the gas for this digital engine, shifting the nation from fragmented tax programs to a single, built-in, data-driven ecosystem,” Siloma mentioned.
Digital submitting and e-invoicing are key elements of the digital technique. Mohammad Bawa, e-invoicing challenge supervisor on the Nigeria Income Service (NRS), mentioned the rollout started in 2024 and is being applied in phases, beginning with the nation’s largest taxpayers.
He famous that many giant taxpayers have met the go-live deadline, whereas others are at various phases of integration. As soon as absolutely operational, the system will enable authorities to validate transactions in actual time and reconcile declarations extra successfully.
For firms, the reforms sign a shift away from guide processes. Kenneth Erikume, tax reporting and technique lead at PwC Nigeria, mentioned firms that fail to digitise threat falling behind in an more and more automated compliance surroundings.
“With out the correct programs, corporations can’t carry out reconciliations that present clear proof for the tax authorities,” he mentioned.
He added that automation may assist resolve long-standing inefficiencies in areas resembling withholding tax and value-added tax, notably for firms that battle with making use of the proper charges. “Know-how can resolve all of that,” Erikume mentioned.
Past bettering compliance amongst registered taxpayers, officers anticipate the reforms to broaden the tax base. By combining fiscalisation measures, withholding tax mechanisms, and expanded entry to transaction knowledge, authorities are positioning the system to seize beforehand under-reported segments of the economic system.
With legislative simplification on one hand and digital enforcement on the opposite, the federal government is betting that better transparency and real-time visibility will scale back reliance on reactive audits and enhance income stability.
“All that is being finished to make the adoption very straightforward for all taxpayers,” Bawa mentioned.
Collectively, the reforms symbolize a structural shift in Nigeria’s tax administration, linking authorized readability with technology-driven oversight in an effort to strengthen income mobilisation and modernise governance.
