Nigerians may get changes as FG reviews new tax laws after implementation issues

• FG begins a six-week review of Nigeria’s new tax laws to fix implementation issues and clarify confusing areas.

• The review will focus on VAT thresholds, withholding tax, capital gains tax and multiple taxation concerns.

• Finance Minister Taiwo Oyedele says the exercise is not to cancel the reforms but improve how they work.

• Stakeholders submitted proposals on reducing compliance stress, protecting small businesses and improving investment.

The Federal Government has started a six-week review of Nigeria’s new tax laws after businesses, investors and other stakeholders flagged areas they say need clarification and adjustment.

The review comes months after the country’s major tax reforms came into effect, with the government admitting that some challenges only became obvious when the laws started interacting with real businesses and everyday economic activities.

The exercise will look at some major areas of concern, including Value Added Tax (VAT) thresholds, withholding tax rules, capital gains tax treatment and the issue of multiple taxation faced by businesses across Nigeria.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced the review on Thursday in Abuja while inaugurating the Technical Subcommittee on Fiscal Policy and Tax Reforms.

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Oyedele, who also chairs the Presidential Fiscal Policy and Tax Reforms Committee, said the government’s experience with implementing the new laws showed that some parts needed to be explained better, refined or adjusted.

“The real test begins when the law meets the economy, as businesses interpret it, administrators implement it, investors respond to it, and citizens experience it. Implementation inevitably reveals areas requiring clarification, refinement or further reform,” the minister said.

The four major tax laws — the Nigeria Tax Act 2025, Nigeria Tax Administration Act 2025, Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025 — officially took effect on January 1, 2026.

According to Oyedele, the government is not trying to throw away the reforms but wants to make sure they work better for Nigerians, businesses and the economy.

“The Finance Bill 2027 should not be seen as just another annual legislative exercise. Our task is not to rewrite the 2025 reforms, but to preserve their fundamental principles while learning from implementation and responding to new economic realities.”

He added that the review would consider areas where the laws may have created unexpected problems, where compliance can become easier and where changes can support investment.

The minister said the government received 134 submissions from Nigerians across different geopolitical zones after requesting public feedback on the tax reforms.

Some of the major issues raised by stakeholders include making VAT rules easier to understand, reviewing withholding tax requirements, improving capital gains tax rules and tackling multiple taxation by different government agencies.

Businesses also called for better coordination among revenue authorities, more digital systems and data sharing to reduce situations where taxpayers are repeatedly asked to submit information already available to government agencies.

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Other suggestions included stronger taxpayer rights, quicker tax refunds, support for small businesses and policies that encourage investment in sectors like mining, renewable energy, healthcare and capital markets.

Oyedele said tax policies must be judged by how fair, efficient and competitive they are, not just by how much money they generate.

“Every tax reform produces winners and losers; the question is whether a policy is fair, efficient and competitive, not whether it is popular with everyone,” he said.

He also warned that complicated tax rules can become another burden for businesses.

“Complexity is itself a tax; it raises compliance costs and creates room for discretion and arbitrage. Where two approaches achieve the same outcome, choose the simpler one,” Oyedele said.

One major area the committee will examine is withholding tax, which the minister said should not become an extra financial burden on companies.

He explained that businesses already struggle with high borrowing costs, and holding back their funds through withholding taxes could affect expansion and growth.

“In a country where the cost of capital is very high, if you withhold the funds that businesses should use for expansion for even one year, it comes at a huge cost,” he said.

Apart from preparing recommendations for the Finance Bill 2027, the committee will also review existing tax regulations, including the Deduction of Tax at Source Regulations 2024 and the Companies Income Tax (Significant Economic Presence) Order 2020.

The six-week review committee is made up of representatives from key government agencies and private sector groups, including the Nigeria Revenue Service, Central Bank of Nigeria, Nigeria Customs Service, Debt Management Office, Budget Office of the Federation, Manufacturers Association of Nigeria, Nigerian Economic Summit Group, tax bodies and major accounting firms.

The co-chair of the committee and Chairman of the Tax Advisory Committee, Albert Folorunsho, said the panel would focus on creating recommendations that work for taxpayers, businesses and government.

“Our recommendations must therefore be technically sound, administratively practicable, and responsive to the realities confronting taxpayers, businesses, and government,” Folorunsho said.

He added that despite the short timeline, the committee would engage relevant stakeholders and work towards improving revenue collection without adding unnecessary pressure on Nigerians and businesses.