Nigeria’s 2025 Tax Law: Facts vs fear as expert debunks misinformation

Barely weeks after President Bola Ahmed Tinubu signed the 2025 Tax Reform Bills into law, public debate has been clouded by misinformation circulating on social media.

While critics have warned of dire consequences, a closer look at the legislation suggests otherwise, according to tax analyst and journalist Arabinrin Aderonke Atoyebi.

Atoyebi, who serves as technical assistant on broadcast media to the Executive Chairman of the Federal Inland Revenue Service, says many of the viral claims are “fearmongering, not fact.”

“The 2025 tax reform is not the death of small businesses. It actually provides them with new protections,” she stressed.

One of the biggest misconceptions, Atoyebi noted, concerns the electronic transfer levy. A Twitter user known as “Biggest Mack” had claimed that every bank inflow would now be taxed.

“This is simply false. The law makes it clear: only business profits are taxable, not every deposit. Before tax is calculated, all legitimate business expenses and statutory deductions like pension contributions and health insurance are allowed,” Atoyebi clarified.

She added that the approach mirrors “standard practice in advanced economies we claim to admire.”

Responding to fears that businesses crossing ₦25 million in turnover would be crushed under heavy taxation, Atoyebi explained that the new law sets higher thresholds for protection.

“Enterprises with turnover up to ₦100 million and assets not exceeding ₦250 million are exempt from Company Income Tax, Capital Gains Tax, and the Development Levy,” she said.

According to her, this provision shields neighbourhood shops, startups, and other small ventures from excessive tax burdens while encouraging them to formalise their operations.

Regarding concerns about double taxation, Atoyebi stated that the new Development Levy, set at 4 percent, consolidates multiple sector-specific charges into a single charge.

“This levy is applied only on assessable profit after expenses are deducted. It simplifies tax obligations, not complicates them,” she explained.

She further reassured Nigerians that Value Added Tax (VAT) remains at 7.5 percent, contrary to rumours of an increase.

The list of zero-rated essentials has also been expanded to cover food, healthcare, education, and public transport.

“These safeguards mean the essentials of everyday life are protected from tax and could even help ease inflationary pressures,” she added.

Perhaps the biggest win, according to Atoyebi, is the exemption of low-income workers.

“The new framework exempts anyone earning up to ₦800,000 annually from personal income tax. Millions of teachers, artisans and junior staff are lifted out of the tax net completely,” she said.

Meanwhile, higher earners will be taxed progressively at rates up to 25 percent, a measure she said “aligns with global best practice: those who earn more contribute more.”

Beyond the figures, the reform establishes the Nigeria Revenue Service to replace the Federal Inland Revenue Service, with promises of digital filing, easier registration, and a Tax Ombuds office.

“For decades, Nigerians have complained of multiple taxation, harassment, and confusion. This law, if properly implemented, addresses those very issues,” Atoyebi noted.

She, however, urged Nigerians to be vigilant in ensuring transparency.

“Of course, scepticism is healthy. But questioning should be based on facts, not half-truths. Fear may be louder, but facts are sturdier. And right now, Nigeria needs facts more than ever.”