The reforms: the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Act, and Joint Revenue Board Act, took effect on January 1, 2026.

For Enhancing Financial Inclusion & Advancement (EFInA), a financial sector market catalyst driving financial inclusion across Nigeria, the tax reform could make or mar vulnerable Nigerians.

In its newsletter released today, 9th January, 2026 EFInA suggests that for millions of Nigerians, from teachers and artisans to market women and informal traders, the reforms promise relief: Individuals earning ₦800,000 or less annually are exempt from personal income tax; small companies with turnover under ₦100 million pay no company tax; essential goods like basic foods, medicines, education materials, and electricity now carry zero VAT; and a newly established Tax Ombudsman office provides channels to challenge unfair treatment.

But, EFInA’s 2023 Access to Financial Services survey, however, highlights potential pitfalls. Many rural and informal operators lack formal accounting systems, bank statements, or digital tools.

Women-owned businesses, already underrepresented in formal financial systems, could face hurdles if compliance requires documentation they don’t have.

Without targeted awareness, digital access, and compliance support, these reforms risk unintentionally widening the gender and regional gaps they aim to close.

“Tax reform can either protect vulnerable Nigerians or add new burdens,” EFInA notes. “Consumer protection means ensuring these policies benefit those they are intended to serve, not create new obstacles.”

As Nigeria moves forward, the question remains: EFInA is asking, will the new tax system be a lifeline for low-income households, or another barrier in the journey to financial inclusion?

[Culled from EFInA Newsletter]

Entrepreneurs here don’t just contend with the market; they contend with the state itself. Sudden tax reforms, unpredictable import bans and contradictory regulations hit them; the environment is usually more like a minefield than a marketplace. 

The question is no longer whether you can compete with other businesses, but if you can survive policy shocks long enough to compete at all.

The Context & Stakes

The country’s business environment is high-potential but high-risk. Reforms are truly designed to improve revenue, regulate emerging industries, and boost infrastructure. But in practice, the unpredictability of these changes usually destabilises businesses before they can adapt.

With a tax-to-GDP ratio of just 9%, one of the lowest in Africa, the government is having challenges in widening the tax net. The Nigeria Tax Act 2025 introduced a 4% Development Levy on assessable profits, consolidating several existing levies. While aimed at simplifying compliance, such measures often arrive with little transition time, leaving businesses struggling to rework budgets overnight.

This is not a problem unique to big corporations, as small businesses, which form the backbone of Nigeria’s economy, face their own version of this challenge. Those with turnover under ₦100 million are exempt from Companies Income Tax, but exemptions exclude professional service firms, creating uneven relief and distorting competition.

When the rules change faster than you can adapt, even the most promising venture can collapse.

The Four Big Obstacles

a) Ever-Changing Tax Regimes

Tax changes here are not occasional; they’re constant. Beyond the new Development Levy, digital asset taxation is now law. Profits from crypto and virtual assets are taxable under the new framework, but enforcement is still tricky due to valuation gaps and anonymity challenges. 

The speed and frequency of such reforms mean businesses are perpetually in a state of adjustment, burning resources on compliance rather than growth.

b) Lack of Infrastructure

Nigeria’s infrastructure stock stands at just 30% of GDP, far below the World Bank’s benchmark of 70%. This gap, projected to reach $878 billion over the next 26 years, is the reason SMEs spend twice as much producing goods as their peers in better-served economies. 

Unreliable power forces reliance on generators. Overstretched ports and congested roads delay shipments. Even with 35 governors planning to spend ₦17.51 trillion on infrastructure this year (a 54% increase from 2024), execution is still not certain.

c) Regulatory Whiplash

Few sectors illustrate this better than crypto and fintech. In 2021, the CBN banned crypto transactions, but by 2023, the ban was reversed. Now, under the Investments and Securities Act 2025, crypto is recognised as a regulated digital asset under SEC jurisdiction. 

Fintech companies are caught between overlapping oversight from the CBN and SEC, creating compliance confusion that slows innovation and drives some startups underground.

d) Corruption & Rent-Seeking

The UNODC’s 2024 Nigeria Corruption Survey shows over 70% of Nigerians refused to pay a bribe at least once, a sign of commendable resistance. But corruption still ranks among the country’s top three challenges. 

From procurement to licensing, rent-seeking behaviour inflates costs and wastes time. Many entrepreneurs silently admit that bribes remain “the price of getting things done,” even when they affect trust in institutions.

Survival & Growth Strategies

• Diversify Revenue Streams: Relying on a single source of income is dangerous when a policy change can erase it overnight.
• Stay Policy-Aware: Join trade associations, attend policy briefings, and actively monitor regulatory developments. Being caught off-guard is expensive.
• Build Flexible Models: Design operations that can shift quickly, for example, businesses that can toggle between import and local sourcing depending on customs rules.
• Invest in Digital Agility: E-commerce, remote service delivery, and cloud-based operations can help bypass some infrastructure constraints.
• Collaborate for Scale: Partnerships reduce exposure. Shared logistics, pooled procurement, or joint advocacy can soften the blow of policy changes.

An SME owner in Lagos recently told me:

“Every time I hear ‘new policy,’ I don’t think about how it will help. I think about how much it will cost me this time.”

Another, a fintech founder, described the constant pivoting as “building on shifting sand.” The frustration is the unpredictability, not limited to the cost.

Macro Takeaway

In Nigeria, policy is a central player, not just the background noise of business. And for many, it feels less like a referee and more like a competitor.

Scaling through goes beyond market fit; it includes policy resilience. Entrepreneurs need to be as skilled at reading government gazettes as they are at reading balance sheets. The prize for those who adapt is a market with huge potential, and the cost for those who can’t is early extinction.

So, I leave you with this:
If you could design one policy to protect Nigerian entrepreneurs from sudden shocks, what would it be?

Among others, the tax reform bills (now laws) included renaming the Federal Inland Revenue Service (FIRS) as Nigeria Revenue Service (NRS).

At the event in Abuja, the President described the sweeping new legislations as pivotal to the success of the administration’s reforms and the country’s prosperity.

READ MORE HERE about the Tax Reform Bills provisions.

The Nigeria Employers Consultative Association (NECA) expressed support for the new tax legislations.

However, at the signing ceremony held in his office at the State House, Tinubu said the occasion presented a new lease of life to every Nigerian and future generations.

“What we did a few minutes ago is the way forward for our country’s prosperity. Leadership must help people take off, lead the way, and navigate every turn and twist. We must help them reach their destination. That is what we are doing.

“We are in transit; we have changed the roads, we have changed some of the misgivings, we have opened the doors to a new economy, business opportunities. We have shown the world that Nigeria is ready and open for business,” the President stated.

Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, extolled the President’s leadership in enabling the passage of the four bills.

He thanked the President for all the support, without necessarily teleguiding the committee, and only asked necessary questions.

“History will remember you for good for transforming our country because you went for a fundamental reform,” he added.

By leveraging the power of the tax system, governments can implement progressive policies that promote social justice, close the gap of social marginalization, and create opportunities for all members of society.

This piece explores the potential of tax reform to combat poverty, promote inclusive growth, and drive economic prosperity, with a focus on strategies that prioritize equity, sustainability, and social impact.

Drawing from global best practices and examples across the African continent, we delve into how tax reform can be harnessed to build a more equitable and resilient society for the benefit of all.

In the rapidly evolving digital landscape, tax reforms are of utmost importance to keep pace with technological advancements and changes in the way we conduct business.

Many countries are in the process of modernizing their tax systems to adapt to the digital economy and ensure that all companies contribute their fair share of taxes.

A crucial aspect of contemporary tax reform is the efficient management and utilization of tax revenue.

This involves streamlining the tax system to minimize inefficiencies and ensure that tax revenue is allocated effectively. Simplifying the tax code can make it easier for individuals and businesses to abide by tax laws, promoting compliance and reducing waste.

Addressing tax avoidance and evasion by multinational corporations is another critical issue in tax reform in the digital age. With the proliferation of online business models, companies have exploited loopholes to shift profits to low-tax jurisdictions, undermining the fairness of the tax system. Governments are now cracking down on these practices to ensure that companies pay their dues.

One proposed solution to combat tax avoidance is the implementation of a digital services tax, which would tax revenue generated from online transactions and digital advertising. This measure aims to level the playing field between traditional and online businesses, while also generating additional revenue for governments.

Essentially, embracing tax reform in the digital age is vital to establishing fair, efficient, and effective tax systems.

By curbing tax avoidance, simplifying tax regulations, and investing tax revenue wisely, countries can create a sustainable and equitable tax framework for the future.

How can individuals effectively save and invest tax-efficiently to contribute to a true federalism model that delivers dividends of democracy in the digital age?

In the digital age, it is crucial to implement tax-saving and investment strategies that are efficient to support true federalism and ensure the effective delivery of dividends of democracy. This involves optimizing tax systems to generate revenue that can be invested back into society.

One key strategy is to focus on simplifying the tax code and making compliance easier for individuals and businesses.

By streamlining the tax process, it becomes more efficient for everyone to fulfil their tax obligations, leading to increased revenue for the government.

Additionally, it is important to address tax avoidance and evasion by implementing measures that target multinational corporations that exploit loopholes in the tax system.

This can include introducing digital services taxes on online businesses to ensure they pay their fair share of taxes, thus increasing government revenue that can be used to support federal initiatives.

Furthermore, investing tax revenue wisely is essential in delivering dividends of democracy. By allocating funds to areas that benefit the populace such as infrastructure, healthcare, education, and social welfare programs, the government can ensure that the benefits of tax revenue are distributed equitably across different regions, promoting true federalism.

Essentially, by implementing efficient tax-saving and investment strategies, addressing tax evasion, and allocating revenue in areas that benefit society, true federalism can be supported in the digital age, leading to the effective delivery of dividends of democracy.

What are the diverse ways in which efficient tax-saving and investment strategies aligned with global practices can be implemented to drive economic development through tax reform, considering examples across the African continent?

Implementing efficient tax-saving and investment strategies aligned with global practices is crucial for economic development through tax reform in various countries across the African continent. By adopting best practices from around the world and tailoring them to suit their specific needs, African nations can generate revenue, promote economic growth, and ensure equitable development.

Some examples of how countries in Africa are implementing such strategies:

1. Simplifying Tax Administration:

Many African countries are streamlining their tax systems to make them more user-friendly and efficient. For example, Rwanda has simplified its tax procedures, making it easier for businesses to comply with tax laws and reducing the compliance burden. This has led to an increase in tax compliance and revenue collection.

2. Addressing Tax Evasion:

African countries are cracking down on tax evasion, particularly by multinational corporations. For instance, Kenya has implemented a digital tax system that tracks transactions and helps prevent revenue leakage. By ensuring that all businesses pay their fair share of taxes, governments can increase revenue for economic development.

3. Digital Services Taxes:

Several African countries are considering or have implemented digital services taxes to capture revenue from the growing digital economy.

For example, Nigeria introduced a 7.5% Value Added Tax (VAT) on online transactions and services. These taxes help level the playing field between digital and traditional businesses while generating additional revenue for government programs.

4. Investment in Infrastructure:

Efficient tax-saving strategies involve allocating tax revenue to critical infrastructure projects that promote economic development. For example, Ethiopia has used tax revenue to invest in infrastructure such as roads, airports, and energy projects, driving industrialization and economic growth.

5. Public-Private Partnerships (PPPs):

African countries are increasingly turning to PPPs to finance infrastructure projects. PPPs leverage private sector resources and expertise, reducing the burden on government budgets. For instance, Ghana has utilized PPPs to fund projects like the Accra-Tema motorway and the Kumasi International Airport expansion.

By implementing efficient tax-saving and investment strategies aligned with global practices, African countries can boost economic development, reduce poverty, and promote social welfare. These examples demonstrate how tax reforms can drive sustainable growth and development across the African continent.

How can tax reform be effectively utilized to alleviate poverty, narrow the gap of social marginalization, and promote sustainability and economic prosperity?

Implementing effective tax reforms can play a significant role in reducing poverty, closing the gap of social marginalization, and fostering sustainability and economic prosperity.

By leveraging the tax system to address inequalities, support the most vulnerable populations, and promote inclusive growth, countries can create a more equitable and sustainable society. Here are some strategies for utilizing tax reform to achieve these goals:

Progressive Taxation: By implementing progressive tax systems that require higher earners to pay a larger proportion of their income in taxes, governments can redistribute wealth and reduce income inequality. This can help level the playing field, lift people out of poverty, and provide resources for social programs that support marginalized communities.

Social Spending: Investing tax revenue in social programs such as healthcare, education, social protection, and affordable housing can help reduce poverty and improve the well-being of disadvantaged groups. For example, countries like Brazil have successfully used targeted social spending programs funded by taxes to reduce poverty rates and improve social mobility.

Tax Incentives for Social Causes: Governments can use tax incentives to encourage private sector investment in initiatives that address social issues and promote sustainable development. For instance, offering tax breaks to companies that invest in renewable energy or provide job training for marginalized populations can help close social gaps while stimulating economic growth.

Combatting Tax Evasion and Corruption: Strengthening tax enforcement mechanisms, improving transparency, and combating tax evasion and corruption are essential for ensuring that tax revenue is collected and allocated effectively. By closing loopholes and promoting accountability, governments can increase public trust, generate more resources for poverty reduction, and reduce social marginalization.

Green Tax Reforms: Introducing environmentally-friendly tax policies, such as carbon taxes or renewable energy incentives, can promote sustainable development while addressing social issues. These measures can stimulate green innovation, create green jobs, and reduce carbon emissions, contributing to long-term economic prosperity.

Emphatically, by utilizing tax reform as a tool for social justice, poverty reduction, and sustainable development, countries can build more inclusive and resilient economies that benefit all members of society.

Prioritizing fairness, equity, and long-term sustainability in tax policies can help close the gap of social marginalization and pave the way for shared prosperity.

The power of tax reforms to reduce poverty, address social marginalization, and foster sustainable economic development cannot be overstated.

By implementing progressive taxation, investing in social spending, incentivizing private sector investment in social causes, combating tax evasion and corruption, and promoting green tax reforms, governments can create a more equitable and inclusive society that benefits all individuals, regardless of their background or circumstances.

Through a holistic approach to tax policy that prioritizes fairness, equity, and long-term sustainability, countries can pave the way for shared prosperity and a brighter future for generations to come.

As we navigate the challenges of the digital age and strive for true federalism in the delivery of dividends of democracy, harnessing the potential of tax reform as a catalyst for social change is paramount to building a more just, prosperous, and resilient world for all.

Speaking during a media parley on Thursday, Mr. Taiwo Oyedele, chairman of the Committee, pointed out challenges businesses face due to the volatility of the foreign exchange (FX) market, which causes frequent changes in the import duty rate.

According to him, the Committee is working with various stakeholders for stability to allow businesses to plan adequately.

In Oyedele’s words, “When we did the budget, we said naira to dollar will be N800, now it is 1,000 something. People need to plan.”

He further urged the government to sign an order that would set the exchange rate at N800 for customs import duty for the remainder of the year.

The proposal comes in the wake of recent adjustments by the Nigerian Customs Service (NCS) to the FX rate for tariffs and duties.

On May 27, the NCS set the rate at N1,480 per dollar, following recommendations from the Central Bank of Nigeria (CBN) based on official FX market trading activities.

Oyedele’s call for a fixed rate of N800 per dollar aims to address the concerns and promote better economic planning and stability for businesses engaged in importation.

The committee’s recommendations are part of broader efforts to reform Nigeria’s fiscal and tax policies to enhance economic growth and stability.

“We have always had issues with fiscal policies but COVID-19 complicated it. Productive was low while the government [not just Nigeria] shared money to people to sustain them [while they were indoors]. This compounded the problems – led to inflation – country like UK witnessed double digit inflation that it never witnessed in a generation. Today, Russia-Ukraine, Israel-Gaza wars are still compounding issues.

“So, we are bold with our proposals. We owe it as a duty to be truthful to our country. If you do not try, your chance of succeeding is zero. Our recommendations are quite bold. The implementations will require diligence.

“The President has assured us that our Committee will not just end at the point of submitting the report, but will be part in the implementation stage”, he said.

The Committee chaired by Taiwo Oyedele  was set up by the President to review and advice on reforms to shape Nigeria’s fiscal policy and tax system.

The Committee’s terms of reference covers Fiscal Governance; Revenue Transformation and Economic Growth Facilitation.

The work of the committee is further divided into 3 phases, being Quick Wins within 30 days; Critical Reforms within 6 months and Implementation within 1 year.

The committee has presented its reports to the President with key recommendations to address critical economic issues ranging from exchange rate management, impact of fuel subsidy removal, moderation of inflation, and facilitating economic growth.

The key recommendations include, but not limited to:

1. Measures to address duplication of functions in public service, ensure prudent public financial management and optimize value from government assets and natural resources.

2. Policy signalling and collaboration by MDAs, economic management, and policy execution team.

3. Use of technology “Data4Tax” to expand the tax net.

4. Increase personal income tax exempt threshold and personal relief allowance.

5. Tax break for private sector in respect of wage increases to low-income earners, transport subsidy and net increase in employment.

6. Permit the payment of taxes on foreign currency denominated transactions in Naira for Nigerian businesses.

7. Remove impediments to global employment opportunities for Nigerians based in Nigeria.

8. Suspension of VAT on diesel and tax waivers on CNG, CNG conversion, and renewable energy items.

9. Comprehensive review of tariffs on the 43 items unbanned from accessing forex in the official market and fiscal policy review of other items prohibited for imports.

10. Reforms of Withholding Tax Regulations to ensure simplicity and ease the pressure on working capital of businesses.

11. Facilitate the use of mobile phones for conditional cash transfers and introduce a spending framework for subsidy removal and forex reform windfall, including a national portal to track spending by FG, states and local governments.

12. Suspension of multiple taxes which place burdens on the poor and small businesses and compensate with windfalls revenue of certain agencies.

13. Expand the official foreign exchange market to incorporate BDCs, forex apps and retail fx dealers, and outlaw transactions in the black market.

14. Digitalise Nigeria’s fx regime and discourage speculative demands and hoarding of fx in cash.

15. Imposition of excise tax on foreign exchange transactions outside the official market.

16. Implement forward contracts for the importation of PMS as a short-term measure pending improvement in key economic indices.

17. Discontinue with the fx verification portal and requirement for Certificate of Capital Importation and export proceeds restriction.

18. Address impediments to export promotion and bottlenecks regarding Exports Expansion Grants, and remove restriction on repatriation and use of export proceeds by exporters.

19. Modify Tax ProMax to allow taxpayers to make part payments of outstanding tax liabilities.

20. Grant waiver of penalty and interests on the condition of full payment of outstanding tax liabilities on or before 31 December 2023.

[Source]