The Federal Government has commenced a six-week review of Nigeria’s new tax laws, with a technical committee mandated to identify implementation gaps, clarify ambiguities and address unintended consequences arising from the reforms.
The review, which will feed into the proposed Finance Bill 2027, will examine issues including Value Added Tax (VAT) thresholds, withholding tax, capital gains treatment, multiple taxation, taxpayer rights and the ease of doing business.
The 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.
Oyedele, who also chairs the Presidential Fiscal Policy and Tax Reforms Committee, said the government was moving from the initial phase of tax system restructuring to one focused on improving its implementation.
“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,” he said.
The review comes about eight months after four major tax reform laws came fully into force on 1 January 2026: the Nigeria Tax Act 2025, Nigeria Tax Administration Act 2025, Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025.
The Federal Ministry of Finance had earlier issued transition guidelines to clarify how obligations arising before and after 1 January 2026 would be treated under the new framework. The guidelines were designed to promote clarity, fairness and administrative certainty in the transition to the new regime.
134 submissions received
Oyedele said the government received 134 submissions from stakeholders across the six geopolitical zones following its call for public input, in addition to hard-copy submissions.
According to him, the submissions raised concerns about the need to simplify and clarify provisions relating to VAT thresholds, withholding tax and capital gains.
Stakeholders also called for stronger measures against multiple taxation, improved coordination among revenue authorities, greater digitalization and data-sharing, faster tax refunds, and stronger protection of taxpayer rights.
Other proposals focused on reducing compliance burdens on small businesses and improving Nigeria’s competitiveness in sectors including mining, renewable energy, healthcare and the capital market.
Oyedele said the Finance Bill 2027 should build on the existing reforms rather than overturn them.
“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 said.
“We must ask where implementation has revealed ambiguity, where unintended consequences have emerged, where compliance can be simplified, and where we can improve investment and competitiveness.”
‘Complexity is itself a tax’
The Minister warned that overly complicated tax rules could impose additional costs on businesses and create opportunities for discretionary interpretation and tax arbitrage.
“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,” he said.
He also urged the committee to assess the broader economic consequences of the proposed tax measures rather than focusing solely on revenue generation.
“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 added: “A provision that raises revenue may impose a far greater cost on the wider economy. The government must optimise the whole economy, not merely achieve a single objective.”
Withholding tax, digital economy under review
In addition to preparing the Finance Bill 2027, the committee will review the Deduction of Tax at Source Regulations 2024 and prepare revised withholding tax regulations.
It will also review the Companies Income Tax (Significant Economic Presence) Order 2020, with a view to developing an updated framework aligned with the new tax laws and international practices.
Oyedele said withholding tax should continue to function as an advance-payment and compliance mechanism rather than become an additional cost to businesses.
“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.
The Significant Economic Presence review is expected to be particularly relevant to the taxation of cross-border and digital economic activities, as the government seeks to protect Nigeria’s taxing rights while maintaining an environment that attracts investment.
Six-week deadline
Oyedele gave the subcommittee six weeks to complete its assignment and submit its report.
The committee is chaired by the Permanent Secretary of the Federal Ministry of Finance, with the Chairman of the Tax Advisory Committee, Albert Folorunsho, serving as co-chair.
Its membership includes representatives of the Federal Ministry of Justice, Nigeria Revenue Service, Joint Revenue Board, Nigeria Customs Service, Central Bank of Nigeria, Debt Management Office and Budget Office of the Federation.
Representatives of the Nigeria Investment Promotion Commission, Small and Medium Enterprises Development Agency of Nigeria, Manufacturers Association of Nigeria, Nigerian Economic Summit Group, Nigerian Bar Association, Association of National Accountants of Nigeria, Chartered Institute of Taxation of Nigeria and Institute of Chartered Accountants of Nigeria are also on the committee.
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture and representatives of Deloitte, EY, KPMG and PwC are also represented.
Folorunsho said the committee would combine technical expertise with stakeholder consultation in carrying out its mandate.
“Our recommendations must therefore be technically sound, administratively practicable, and responsive to the realities confronting taxpayers, businesses, and government,” he said.
He acknowledged the tight six-week timeline but pledged that the committee would work with stakeholders to produce recommendations capable of strengthening revenue mobilisation without creating unnecessary burdens for taxpayers.
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