Nigeria’s Minister of State for Finance, Taiwo Oyedele, has candidly acknowledged that errors made their way into the nation’s recently enacted tax laws. However, he was quick to reassure stakeholders that the implementation of these reforms would be handled with transparency and fairness, rather than through arbitrary enforcement.
Addressing a fireside chat at the 2026 Annual Conference of the Nigerian Bar Association (NBA) Section on Legal Practice, Oyedele emphasized that the policy intent is just as vital as the written word.
Fixing the “Upside-Down” System
One of the primary goals of the new reforms is to fix a long-standing imbalance that penalized businesses for formalizing. Oyedele noted that under the previous regime, individuals faced a much lighter burden than registered companies, a dynamic that stifled economic growth.
“Under the old system, an individual could pay an effective tax rate of about 19 per cent, but registering the same business as a company pushed the burden above 40 per cent. This was the opposite of global best practice,” he said.
By streamlining these rates, the government aims to encourage more entrepreneurs to register their businesses and attract foreign direct investment by promising a predictable tax environment.
“If policies can change overnight, it sends the wrong signal to investors. Consistency is critical,” he noted.
Protection for the Vulnerable
A major highlight of the reform is its focus on social equity. The Minister revealed that the new framework intentionally shields low-income earners and struggling small businesses from the tax net.
- Zero Tax for Low Earners: Individuals earning roughly ₦1 million annually are largely exempt.
- Protection for Workers: Oyedele pointed out that “Nearly half of working Nigerians earn less than ₦70,000 monthly. Taxing them aggressively would be unjust.”
- VAT Exemptions: Basic necessities including food, healthcare, and education, remain exempt from Value Added Tax (VAT) to ease the cost of living.
- End of “Taxing Loss”: The reform removes the “minimum tax” previously levied on companies even when they were making losses. Oyedele described this old practice as taxing capital rather than profit.
Consolidating for Clarity
To make life easier for taxpayers and legal practitioners, the government has collapsed numerous, confusing tax laws into four primary legislations, most notably the Nigeria Tax Act and the Nigeria Tax Administration Act.
Regarding the technical errors found in the current documents, Oyedele explained they were the result of manual review processes and multiple drafting stages. He confirmed that a new finance bill is already in the works to rectify these discrepancies.
“What we need is a more transparent and reliable legislative process where every version of a law is publicly available,” he stated.
The Role of the Legal Community
The Minister concluded by calling on lawyers to act as catalysts for economic growth. As advisors, their interpretation of these laws will directly impact job creation and national revenue.
While acknowledging that Nigeria still has a long way to go to match the tax collection efficiency of peers like South Africa, Oyedele remains optimistic.
“If we improve collection, we can significantly increase funding for infrastructure, education, and healthcare,” he added.
