President Bola Tinubu has assented to the four tax reform bills recently passed by the National Assembly, ushering in a new Nigerian tax regime.
The President signed the four tax bills into law during a ceremony at the Presidential Villa on Thursday, June 26, 2025.
The ceremony was attended by the leadership of the National Assembly; the President of the Senate, Senator Godswill Akpabio, and the Speaker of the House of Representatives, Hon. Tajudeen Abbas, alongside some federal legislators, governors, ministers, and aides of the President.
Pan-Atlantic Kompass reports that the four bills signed into law by Tinubu are: the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.
In his address during the ceremony, Tinubu assured Nigerians that the new Nigerian tax regime will significantly transform tax administration in the country, leading to increased revenue generation, improved business environment, and a boost in domestic and foreign investments.
“For too long, our tax system has been a patchwork — complex, inequitable, and burdensome,” President Tinubu wrote on his verified X handle: @officialABAT. “That era ends today. We are laying the foundation for a tax regime that is fair, transparent, and fit for a modern, ambitious Nigeria.”
Speaking after the signing ceremony, the Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, said the new tax regime would begin on January 1, 2026.
He stated: “It takes time for all the stakeholders, participants, operators, and the regulator to change the system.
“So, with the magnanimity of the National Assembly, Mr President assented to the bills. So, the effective date will be January 1, 2026. We have six full months for both sensitisation and planning. This is also considering the fiscal year of the government because when you have this kind of change, it’s not what you do in the media.”
Below is a breakdown of some major aspects of the new laws;
1. FIRS Renamed: The Federal Inland Revenue Service (FIRS) has now been renamed and would be referred to as the Nigeria Revenue Service (NRS).
2. Unified Revenue Collection: The law will empower the NRS to handle revenue collections previously managed by agencies like the Nigeria Customs Service, NUPRC, NPA, and NIMASA.
3. Low-Income Relief: Under the new law workers earning ₦800,000 or less annually are now exempted from income tax.
4. High-Income Tax: According to the new law, individuals earning N50 million annually will now pay a 25% personal income tax.
5. Small Business Exemption: Small business owners are also fully exempt from paying income tax under the new law.
6. Corporate Tax Cut: Starting in 2026, company income tax for medium and large firms will be reduced from 30% to 25%.
7. VAT Exemptions on Essentials: The new law has removed VAT charges on essential items like food, medical services, pharmaceuticals, school fees, and electricity.
8. No Tax Hike: VAT remains at 7.5%, and corporate income tax stays at 30%—there has been no increase.
9. New Development Levy: A 2%–4% Development Levy will now fund critical national institutions like NELFUND, TETFund, NITDA, and NASENI.
10. VAT Sharing Formula among the three Tiers: 10% to Federal Government, 55% to States; 35% to LGAs
11. VAT Sharing Formula for States: 50% based on equality; 30% based on Generation (i.e where VAT was derived); and 20% based on state’s Population.
Below is a brief timeline following the gazetting of the tax laws
July – November 2025: Transition and Institutional Rebranding
Following the signing, the government entered a transition phase into the new Nigerian tax regime. The Federal Inland Revenue Service (FIRS) began its evolution into the Nigeria Revenue Service (NRS), envisioned as the sole revenue collection agency for the federation.
Throughout this period, the Presidential Committee on Tax Policy and Fiscal Reforms, led by Taiwo Oyedele, conducted stakeholder engagements to prepare businesses for the January 1, 2026, commencement date. This window was intended for system upgrades and “internal readiness assessments” by corporate entities to adapt to the new 30% Capital Gains Tax and the 15% minimum effective tax rate for large multinationals.
December 2025: Allegations of Forgery and “Material Discrepancies”
As the implementation date neared, a major controversy erupted in mid-December. Lawmakers, led by Hon. Abdulsamad Dasuki and later supported by Hon. Mansur Manu Soro, raised an alarm that the version of the tax laws published in the Official Gazette differed from the versions actually debated and passed by the National Assembly.
These allegations suggested that “unauthorized insertions” had been made post-passage, effectively granting the executive branch more expansive fiscal powers and removing transparency reporting requirements that the legislature had insisted upon.
The African Democratic Congress (ADC) and other opposition voices characterized these changes as “forgery” and called for an immediate suspension of the rollout.
Late December 2025: The Presidency Stands Firm
Despite the legislative outcry and the formation of a seven-man ad-hoc committee by Speaker Tajudeen Abbas to investigate the discrepancies, the Presidency remained resolute. On December 30, 2025, President Tinubu stated at the State House, Abuja, confirming that the new tax laws would commence on January 1, 2026, as planned. The administration dismissed the concerns as “public discourse” that did not establish “substantial issues” warranting a delay, asserting that the reforms were a “once-in-a-generation opportunity” for a structural reset of the economy.
January 1, 2026: Official Commencement
On January 1, 2026, the new tax regime officially took effect across Nigeria. This marked the start of the Electronic Fiscal System for VAT and the new progressive income tax brackets. While the government moved forward with implementation to stabilize revenue, the shadow of the alteration allegations remained, with legal experts and lawmakers continuing to debate the constitutionality of the gazetted text versus the legislative intent.
