The Nation Newspaper

Tag: Tax

  • New tax laws take effect from January 1, 2026 — Adedeji

    New tax laws take effect from January 1, 2026 — Adedeji

    …laws designed to ease burden on low-income Nigerians – Oyedele

    The newly signed tax reform laws will officially take effect from January 1, 2026, giving room for adequate preparation and alignment with Nigeria’s fiscal calendar, Executive Chairman of the National Revenue Service (NRS), Zacch Adedeji, announced on Thursday.

    Speaking to journalists at the State House after President Bola Ahmed Tinubu signed the laws, Adedeji explained that the six-month window before implementation would allow the government and relevant stakeholders to sensitise the public, align internal systems, and ensure smooth transition in line with global best practices.

    “Based on best practices globally, because when you have this kind of change, it takes time for all stakeholders—participants, operators, and regulators—to adjust the system. So with the magnanimity of the National Assembly and Mr. President, the effective date will be January 1, 2026, by the special grace of Almighty God”, he stated.

    Adedeji said implementing such sweeping reforms mid-year would disrupt fiscal coherence, noting that it is best to begin with the start of a new calendar year.

    “When you have this kind of change, it’s not what you do mid-year. It’s better to start from the beginning of the year,” he added.

    The effective timeline, he stressed, is intended to ensure adequate public education, institutional planning, and seamless harmonisation with the annual budgeting cycle.

    Meanwhile, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, described the newly enacted laws as “pro-poor,” assuring that the reforms are designed to relieve financial pressure on low-income earners, small businesses, and the most vulnerable segments of society.

    Also speaking at the post-signing briefing along with Adedeji, Oyedele revealed that the reforms include sweeping exemptions and new frameworks aimed at making taxation fairer and more equitable.

    “More than one-third of workers in both the private and public sectors will now be completely exempt from PAYE. They will not have to pay personal income tax. Over 90 percent of small, micro, and nano businesses will no longer need to worry about corporate income tax, VAT, withholding tax, or PAYE for their employees”, he disclosed.

    According to Oyedele, the reforms are structured to leave “more money in the hands of the ordinary Nigerian to take care of their daily needs,” with targeted relief in critical sectors such as food, healthcare, and education.

    “Any traces of VAT in food, education, and healthcare are now removed completely. So, we should see prices of those items come down,” he said.

    Read Also: BREAKING: Tinubu signs Tax Reform bills into law

    He further noted that additional VAT exemptions cover housing, transportation, and accommodation—areas he described as the top three expenditure categories for most Nigerian households.

    “These three account for more than 80 percent of where Nigerians spend their money. That’s a huge relief for them,” he stated.

    Beyond economic relief, the new laws are also expected to modernise Nigeria’s tax system by improving efficiency, transparency, and public trust in the administration of tax revenues.

    “There are now provisions to help us improve the efficiency of how we collect taxes, and also improve transparency in reporting the taxes we collect. We expect this transparency to be directly linked to how those taxes are utilised for the benefit of the people”, Oyedele noted.

    President Tinubu had, minutes earlier, signed into law four tax-related bills: the Nigeria Tax Reform Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act, saying “I have just signed into Law, the four fiscal reforms bills. It is a new dawn for Nigeria”.

    Details shortly…

  • Fed Govt urged to tax abandoned containers to cut $500m annual losses

    Fed Govt urged to tax abandoned containers to cut $500m annual losses

    To tackle the worsening crisis of abandoned shipping containers clogging Nigeria’s ports, the Sea Empowerment and Research Centre (SEREC) has recommended the introduction of a “demurrage tax on all unreturned empty containers” that remain in the country beyond the official three-month period.

    In its latest bulletin, the centre urged the Federal Government to adopt this policy as a strategic revenue option while curbing port congestion and recovering the economic losses estimated at over $500 million annually.

    “Shipping companies already charge Nigerian shippers an average of N10,000 per day for demurrage after the third day.

    “Imagine if the government places a demurrage tax on a percentage basis on every unreturned container after the official 90-day period. Such additional revenues are enough for road and environmental maintenance,” SEREC noted.

    The group’s recommendation is anchored on the growing burden of over 100,000 unreturned empty containers littering the ports and key transport corridors, contributing to logistical delays, environmental hazards, and avoidable costs.

    The bulletin stated that the cost of returning a 20-foot empty container to its origin port ranges from $2,000 to $4,000, while a 40-foot container could cost $3,500 to $6,000, depending on market conditions.

    Aside from freight costs, abandoned containers are linked to high storage fees, port congestion, and demurrage penalties, which can rise to N60,000 per container monthly. About 45 per cent of the idle containers are said to be “rickety” and no longer seaworthy, posing safety and environmental risks.

    Drawing from international examples, SEREC cited how countries like Germany, France, the UK, the US, and Australia have implemented container detention fees, demurrage penalties, or deposit return schemes to ensure containers are promptly returned and circulation is maintained.

    Read Also: FG reports N6.9tn revenue in first four months of 2025

    To mitigate Nigeria’s own crisis, the group proposed a strategic container return framework to be jointly coordinated by the Nigerian Shippers’ Council (NSC), Nigerian Ports Authority (NPA), and the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN).

    “Other nations are tackling this problem with strong regulatory backing. Nigeria cannot afford to ignore it any longer,” SEREC’s Head of Research, Eugene Nweke stated.

    “We have formally written to the Minister of Marine and Blue Economy, urging immediate policy action on this pressing issue.”

    The centre further recommended long-term solutions, including increased export activity, upgraded port infrastructure, and the development of an efficient container tracking and return system, all aimed at easing the pressure on Nigeria’s maritime logistics and preventing future losses.

    “The implementation of a demurrage tax is not just about revenue. It’s about protecting our maritime space from decay, ensuring efficiency, and aligning with global best practices,” the maritime think tank stressed.

  • Makinde, FIRS, others urge moderation in expanding tax net

    Makinde, FIRS, others urge moderation in expanding tax net

    Governor Seyi Makinde of Oyo State and the Chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji have called on stakeholders in the sector to be humane in their bid to expand the nation’s tax net to cover the informal sector.

    They urged the stakeholders under the aegis of the Joint Tax Board (JTB) and other stakeholders in the revenue generation drive to adopt strategy and deep understanding in their effort to widen the tax net.

    They made the call in separate remarks at the opening of the 157th JTB meeting at The Jagz Hotel, Iyaganku, Ibadan, the Oyo state capital city on Monday

    The two-day meeting had: “Taxation of the Informal Sector: Potentials and Challenges”, as theme and it is being attended by top tax administrators, policy influencers, and key stakeholders from across the country, to brainstorm on integrating the informal sector into Nigeria’s tax framework.

    Declaring the event open, Makinde explained that the informal sector is the backbone of the local economy and should be engaged technologically for meaningful impact.

    He urged the stakeholders to consider modalities to deepen partnership with the informal sector, such that dragging them into the tax net would be based on understanding rather than enforcement

    While noting that government must be strategic, the governor also urged the administrators and stakeholders to be humane in its approach, stressing that the goal should not only be to increase revenue but to support and empower those within the informal economy so they can thrive and contribute meaningfully.

    Makinde also reiterated his administration’s commitment to balancing fiscal responsibility with inclusive economic growth while highlighting the significance of the state’s recent initiatives that have improved on its revenue generation drive.

    Read Also: Makinde’s posters for 2027 presidential election flood Kano

    Makinde said: “This theme is timely, but it must also aligned with the real work that we are currently doing in your various states and across Nigeria to improve tax system, especially as you are trying to find solutions to the informal sector. I have listened to the chairman of the JTB. He’s on, I guess, well, formalize the sector, and then you can tax them.

    “But you are all here with diverse experiences, and then you can sit down and talk. Find out what is the best path forward. How do you balance the challenges that have been identified? And also, how do we look forward? I have heard people talk about, oh, in Nigeria, we do not have any reason or any need to have any challenge with poverty.

    “This is a rich country. Yes, we are rich in natural resources, but it’s a poor country, because economic prosperity cannot be based only on your natural resources. For you to have economic prosperity, you must ensure that you go out there, mobilize your people.

    “You must have knowledge and skills. And you must also have intensive production. You must produce something. That is when you can move from being resource-rich to economic prosperity.

    “To move away from federal allocation to generating incomes, having productivity at the local level; so in our state, we are not just talking about expanding the tax net. We are actively ensuring that people are productive.

    “And then we are moving the revenue base of the state forward. We recognize that the informal sector, made up of traders, artisans, commercial drivers, and small businesses, forms the backbone of our local economy. Historically undertaxed, this segment has not become a focus of strategic action.”

    He urged the participants to spend the opportunity of the meeting to come out with a framework that will not put pain on the informal sector. He also listed his expectations from the experts and stakeholders after the meeting.

    “So you spend the next two days challenging yourselves. And I do hope that you come up with a solution. We are taking concrete steps to bring more people into the tax net without burdening them unnecessarily. So our initiatives include mass tax education, where you let people know you want to pay for these services.

    “We have to find a way to pay for it. Also simplified processes, where you can stay in the corner of your business premises and pay your taxes in there. And also incentive-linked compliance. So, we encourage people to have voluntary tax compliance for benefits, such as access to employment schemes and credit facilities.

    “We have a lot to do. And that is why I am particularly hopeful about the outcome of this meeting. So in the next two days, I look forward to hearing about further proven methods of capturing revenue from highly mobile and how to track informal businesses, and how that will work side by side with formalization of the informal sector.

    “I also like to hear the solution from this room as it regards ways to deepen partnership with stakeholders like transport union and market association. Also, I look forward to innovations in using data and technology to track and support informal businesses without excessive bureaucracy. So this forum is an opportunity to exchange ideas on how to move from intent to impact across states and sectors.

    “In our state, we are committed to continuous improvement. We are also, like Femi said, strengthening the capacity of our state board of internal revenue to manage compliance more effectively with empathy and fairness. The future of taxation, especially of the informal sector, depends on how well we balance enforcement with understanding”, the governor added.

    Earlier in his welcome address, Adedeji, who also doubles as the JTB Chairman acknowledged Oyo State’s pioneering role in national development and tax administration.

    He noted that the informal sector accounts for 92.6 percent of Nigeria’s employed population, according to the National Bureau of Statistics (NBS), emphasizing the sector’s critical importance in Nigeria’s economic structure.

    Adedeji stated that the JTB, currently transitioning to the Joint Revenue Board (JRB) with expanded scope and responsibilities, would continue to harmonize and modernize tax systems nationwide.

    He cautioned against any attempt of adding tax burden on the poor and charged the meeting to focus on conceiving strategies to formalize the informal sector before any tax attempt.

    He said: “Our meeting here provides the right platform to brainstorm innovative and equitable ways of bringing the informal sector into the tax net without alienating or overburdening it.”

    While stressing that the administration of President Bola Tinubu is concerned about the well-being of operators of the informal sector noting that the ongoing efforts to capture the players into the taxable net is to properly organize the sector for effective economic planning and not to tax them.

    Also speaking earlier, Executive Chairman of the Oyo State Internal Revenue Service, Mr. Femi Awakan who also spoke on the state’s tax reforms and challenges reported that Oyo state’s IGR has grown from N1.6 billion per month in 2019 to about N8.5 billion per month in Q1 2025, which according to him marked a 240 percent increase over the same quarter.

    Despite these gains, Awakan highlighted key challenges affecting tax administration, including inadequate public investment, limited institutional autonomy, technological gaps, and poor tax culture as he called for greater financial and operational independence for revenue services and investments in data-driven and technology-enabled tax systems.

    He said, “We must reach the unreached, capture the untouched and tax the sector once considered negligible. But we must also ask: How do we do this without stirring the hornet’s nest or being tagged anti-masses?”

    In a sideline interview, the Executive Secretary of the JTB, Olusegun Adesokan, assured that stakeholders will exhaustively brainstorm and come up with resolutions that will form a robust template that will enhance the nation’s economy.

  • FG launches e-invoicing platform to curb tax evasion, boost transparency

    FG launches e-invoicing platform to curb tax evasion, boost transparency

    The federal government has unveiled a new electronic invoicing platform known as the Merchant Buyer Solution.

    It is designed to modernise Nigeria’s fiscal infrastructure, enhance transparency in commercial transactions, and significantly reduce tax evasion.

    The new platform was officially launched in Abuja on Tuesday by the Federal Inland Revenue Service (FIRS), in conjunction with the inauguration of the National Electronic Invoicing Inter-Agency Steering Committee. 

    This moves the country a step closer to the full Implementation of digital public infrastructure as well as introduce real-time monitoring mechanisms for business transactions.

    During the unveiling, Lead Consultant to the E-Invoice Inter-Agency Steering Committee, Sadiq Arogundade, explained that the Merchant Buyer Solution is intended to bring uniformity and structure to invoice creation and exchange across both the public and private sectors. 

    He noted that the platform operates within the broader Digital Public Infrastructure (DPI) framework, incorporating elements such as identity, data exchange, and payments.

    Arogundade pointed out that the system is built to enable interoperability among stakeholders, allowing for efficient data sharing across platforms, including integration with existing Enterprise Resource Planning (ERP) systems used by businesses and government agencies. 

    According to him, the system brings a higher degree of transaction integrity, given that it can authenticate the origin and destination of each invoice in real time.

    “This platform ensures we know exactly who is issuing the invoice and who is receiving it,” he said. “That level of visibility offers unprecedented oversight and integrity in financial documentation, both for regulatory and business purposes.”

    The initial pilot phase of the Merchant Buyer Solution, he said, is currently being implemented among select large taxpayers with complex transaction structures. 

    Arogundade disclosed that global technology firm Huawei has already been integrated into the trial phase, which is being carefully monitored for user feedback and system performance. 

    The broader plan is to extend the platform’s reach to include all large taxpayers and eventually medium and small-scale enterprises across the country.

    Tayo Koleoso, Chief of Staff to the FIRS Executive Chairman and Chairman of the Inter-Agency Steering Committee, described the initiative as a transformative step forward in fiscal governance. He said it is part of the strategic vision of the Executive Chairman of the FIRS, Dr Zacch Adedeji, to deepen fiscal transparency and improve national revenue performance through digital innovation.

    Read Also: FIRS orders banks to close illegal tax collection accounts

    “This is a major milestone,” Koleoso stated. “It is more than a technological project—it is a national infrastructure that will provide real-time visibility into business transactions, improve tax compliance, and ultimately contribute to sustainable revenue generation for development.”

    He added that the project had successfully concluded its development phase and had now moved into the pilot implementation stage. 

    The newly inaugurated Inter-Agency Steering Committee, he said, will be instrumental in guiding the rollout of the e-invoicing system, ensuring strong collaboration among key stakeholders and adapting the system to suit the operational realities of Nigeria’s economy.

    Built on the Universal Business Language (UBL) framework, the Merchant Buyer Solution enables the seamless creation, validation, and exchange of electronic invoices in line with globally accepted standards. 

    The platform’s structure allows users to generate electronic invoices that are compatible with both local compliance requirements and international business practices.

    The pilot rollout is being conducted in collaboration with several government institutions and major players in the private sector. 

    These include the Nigeria Customs Service, the Office of the Accountant-General of the Federation, the Nigeria Inter-Bank Settlement System (NIBSS), the Central Bank of Nigeria (CBN), as well as leading corporations such as MTN, UBA, Seplat Energy, and Huawei.

    The Inter-Agency Steering Committee, which began operations at the same launch event, has been tasked with providing strategic oversight throughout the rollout and beyond. 

    Its responsibilities include promoting collaboration among agencies, identifying and resolving sector-specific implementation challenges, and offering expert advice on legal and procedural reforms to support the e-invoicing framework.

  • The benefits of tax compliance in Nigeria

    The benefits of tax compliance in Nigeria

    By Arabinrin Aderonke

    Tax! Tax!! Tax!!! Who should be involved, and why does it even matter? People often see tax compliance as a burden, but the truth is it is a tool for financial stability, business expansion, and national development. 

    Most Nigerians do not like stress, yet many unknowingly create problems for themselves by ignoring their tax obligations. It is only when penalties hit, government services become inaccessible, or financial doors close that some realize the cost of non-compliance. 

    I have seen it happen over and over again. Someone needs a loan, a contract, or even government service, only to find that their tax records or lack of them are standing in the way. 

    The reality is that paying taxes is not just about avoiding trouble with the authorities. It comes with benefits that can protect your finances and contribute to a better Nigeria.

    One of the advantages of compliance is avoiding penalties and interest. Tax laws are simple if we follow them. Late payments and non-compliance attract fines and interests that only get worse over time. 

    Many people think they are saving money by avoiding taxes, but they end up paying far more in penalties. Beyond avoiding penalties, compliance guarantees access to government services. In Nigeria, a tax clearance certificate is not just a document. It is a key that unlocks many benefits. For example, in Lagos, it is required to access free education, healthcare, and even affordable housing schemes. Many businesses also need it to qualify for government contracts. Those who ignore their tax obligations often find themselves stuck, unable to access these services simply because they failed to comply.

    Read Also: Personal Income Tax by wealthy Nigerians to hit 25%, says Edun

    Another often-overlooked benefit is eligibility for tax benefits and credits. Many assume taxes only take from them, but what they need to know is there are provisions within the system that actually help taxpayers save. For example, small businesses in Nigeria can claim exemptions if they file their income tax returns properly. Larger businesses that pay early can receive tax credits of 1% or 2%, reducing their overall tax burden. These incentives are designed to reward compliance, yet many people miss out on them simply because they want to dodge taxes.

    Tax compliance also helps with better financial planning and also provides legal protection. A taxpayer who understands their obligations can plan ahead, budget effectively, and avoid unnecessary financial stress. 

    For people looking for loans or financial assistance, tax compliance boosts creditworthiness. When requesting loans banks and lending institutions review tax returns. A clean tax record demonstrates financial prudence, making it simpler to obtain loans and even lower interest rates. 

    However, a history of noncompliance raises red flags for lenders, making it harder to obtain financial assistance when it is most needed. Tax-compliant businesses have an edge because they are seen as reliable, while those that evade taxes risk damaging their reputation and losing potential business opportunities.

    Tax compliance is our civic duty. Everyone wants better roads, good schools, quality healthcare, and reliable security, but these things don’t just happen. Developed countries like the United States of America have strong tax systems because their citizens understand that taxes drive progress. 

    If we want a better Nigeria, tax compliance is not an option. It is a necessity. Tax compliance promotes economic stability and progress. When people and companies pay their taxes, the government has money to invest in development projects that create jobs, support industries, and boost the economy.

    Who doesn’t want peace of mind? No penalties, no last-minute rush to pay off debts or face legal repercussions. By promoting a culture of tax compliance, we can build a Nigeria where resources are allocated effectively and public services excel, ultimately benefiting everyone in society. Tax compliance is more than just paying taxes. The benefits far outweigh the costs. Do the right thing. Pay your tax today.

    _Arabinrin Aderonke Atoyebi is the technical assistant on broadcast media to the executive chairman of the Federal Inland Revenue Service._

  • ‘Only one per cent of rich Nigerians pay tax’

    ‘Only one per cent of rich Nigerians pay tax’

    Evasion of tax payment by 99 per cent of high-net-worth individuals is responsible for Nigeria’s low tax-to-GDP ratio of just six per cent, a report by a consortium of think tanks and professional bodies has asserted.

    The report, published and released by Tax Justice Network Africa (TJNA), Oxfam Nigeria, Civil Society Legislative Advocacy Centre (CISLAC) and Oxfam Novib, urged the government to capture the rich into the tax net.

    After investigating Nigeria’s tax system, the oganisations revealed the disproportionate tax burden on the poor and the vast untapped revenue potential from taxing the ultra-wealthy.

    Titled: “Taxing the rich: Nigerian fair tax monitor thematic report”, the organisations called for progressive taxation of 99 per cent of the wealthy evading taxation.

    TJNA is an African network of civil society organisations, composed of think tanks, trade unions, feminist groups, youth-led & faith-based organisations, and community-based organisations spread across African countries.

    Oxfam works to influence policy change in favour of the poor and most vulnerable while CISLAC is a not-for-profit and research organisation promoting active civil-society monitoring and advocating for legislative accountability in Nigeria.

    Investigation showed that one per cent of Nigerians, who are the richest, account for 25.5 per cent of the nation’s wealth, while the bottom 50 per cent own only 4.7 per cent.

    The report indicated that Nigeria could yield more than N4.59 trillion ($6 billion) annually from taxing just 4,690 wealthy individuals to reduce inequality and significantly boost national revenue.

    It added that as estimated by Institute for Policy Studies, Oxfam, Fighting Inequality Alliance and Patriotic Millionaires, implementing an annual net wealth tax would raise more than $6 billion with rates at two per cent on wealth over $5 million; five per cent on wealth over $50 million and 10 per cent on wealth over $1 billion.

    “This would be enough to more than double the government’s health budget or reduce households’ out of pocket health expenditure by 40%.

    “There are 4,690 individuals with a net worth of $5 million or more, with wealth totaling $107.2 billion, and 245 individuals with $50 million or more with a combined wealth of $56.5 billion,” they said.

    “A step toward a comprehensive net wealth tax could be to introduce a tax rate of one percent on the stock value of shares. This could bring in an approximate revenue in Nigeria of $492 million annually or $389 million annually from just the 11 largest companies,” the report claimed.

    Failure will aggravate economic inequality

    The failure to adequately tax the wealthiest, sponsors of the report argued will exacerbates economic inequality and weakens the country’s ability to fund essential public services.

    “Without comprehensive tax reforms, revenue shortfalls will continue to place an undue burden on low- and middle-income earners.

    “These results in a system where those who can least afford it are expected to contribute the most, deepening social and economic disparities.

    “By focusing on progressive taxation, Nigeria has an opportunity to reallocate resources more equitably, ensuring that wealthier individuals contribute their fair share to national development.”

    The report also highlighted the role of tax exemptions and incentives, which often disproportionately benefit the wealthy while failing to generate meaningful economic growth.

    It emphasised that large corporations and high-net-worth individuals frequently exploit legal loopholes to minimise their tax liabilities, further reducing government revenue.

    “Strengthening tax compliance through better enforcement, closing loopholes, and increasing transparency are key steps toward a fairer tax system. Additionally, reforms in property taxation and the introduction of a direct net wealth tax could create a more balanced and just fiscal framework.

    Read Also: Ogun needs 7,000mw electricity to be at its best, says Abiodun

    “One of the major challenges facing tax reform in Nigeria is enforcement. The lack of a comprehensive wealth registry, inadequate auditing mechanisms, and weak institutional oversight have allowed tax evasion to thrive.

    “By investing in robust tax administration infrastructure and leveraging digital technologies, Nigeria can enhance its capacity to track wealth and enforce tax obligations. Countries that have successfully implemented progressive tax policies, such as South Africa and Kenya, provide valuable lessons on how targeted tax policies can drive revenue growth and social development.”

    Quoting a Federal Governmental report, commissioned jointly by the Federal Inland Revenue Service (FIRS) and the Joint Tax Board (JTB), the report claimed that there is poor tax compliance by High Net Worth Individuals (HNWIs).

    “Using the FIRS/JBT definition of High Net-Worth Individuals (HNWIs) – individuals earning at least N40 million ($126984.10 USD) a year- the World Inequality Lab shows that approximately 115,000 Nigerians are meeting this threshold.

    “According to Minister of Finance at that time, Mrs. Kemi Adeosun, the Federal Government itself set the number at 130,000 high net worth individuals (HNWIs).

    “However, only 40 of these individuals were identified as compliant taxpayers by the FIRS and JBT criteria, indicating a compliance rate of 0.035% or less.

    “This stark discrepancy highlights significant challenges in tax compliance (and probably also statistical capacity of FITS/ JBT) and among Nigeria’s wealthiest citizens, pointing to a severe issue in effectively taxing the rich.

    “Having only 40 of 115.000 Nigerian HNWIs fulfilled their tax obligations accurately, means that more than 99% of the super-rich individuals in Nigeria didn’t paying their fair share of taxes,” it stressed.

    Recommendations

    The report urged the government to set up a specialised unit to focus on wealthy individuals, distinct from the Large Taxpayers Office.

    It said: “A specialised unit within the Federal Inland Revenue Service (FIRS) dedicated to managing the tax affairs of high-net-worth individuals (HNWIs) should be empowered to conduct detailed audits and use data from multiple sources, such as financial institutions and property registries, to track and verify assets. This unit should emphasise proactive engagement and tax education for long-term compliance.

    “Given the global nature of HNWI assets, Nigeria should leverage international data-sharing agreements to track offshore holdings and address aggressive tax avoidance practices.

    Recommendations

    •      Invest in capacity building: Train tax officials on the complexities of international tax law and high-net-worth taxation to better handle the challenges posed by the financial sophistication of wealthy individuals.

    •      Optimise voluntary disclosure programmes with limited use of amnesty: Implement a revised voluntary disclosure program for offshore and undeclared domestic assets, emphasizing robust follow-up and strict enforcement for non-compliance post-disclosure. These programmes should be strategically limited and linked to broader structural reforms to prevent reliance on amnesty programs, i.e. amnesty schemes like VAIDS should be used sparingly to avoid fostering a culture tax evasion followed by temporary compliance followed by evasion.

    •      Enhance digital infrastructure for tax administration: Improve the digital infrastructure of tax administration to support real-time data sharing between different government agencies and financial institutions. This will facilitate the integration of tax data and enhance the ability of tax authorities to detect and prevent evasion.

    •      Link transparency to public ppending: Connect increased transparency on wealth and taxation to improvements in public spending on social services. Demonstrating the benefits of tax revenue in terms of tangible public goods can help build trust and compliance among taxpayers.

  • Ezigbo, others sworn in as Tax Tribunal commissioners

    Ezigbo, others sworn in as Tax Tribunal commissioners

    Alawyer, Okide Ezigbo, has been appointed as an Honorable Federal Commissioner of the Tax Appeal Tribunal and was sworn in on February 18 in Abuja.

    The tribunal, established under Section 59 of the Federal Inland Revenue Service (Establishment) Act, is tasked with adjudicating tax-related disputes in Nigeria.

    The swearing-in ceremony, presided over by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, saw the induction of 50 newly appointed commissioners.

    Speaking at the event, the minister emphasised that the appointments reflect the Federal Government’s commitment to enhancing Nigeria’s tax dispute resolution system and ensuring fiscal justice.

    Read Also: 2024 Tax Club Quiz Competition

    Okide Ezigbo, a seasoned legal professional from Anambra State, brings over 22 years of experience to the role. He previously practised law at Funke Adekoya SAN Chambers in Yaba and Aelex Law Firm in Ikoyi. His academic and professional career includes being a law lecturer at Aberdeen College and Robert Gordon University in Scotland, he later worked in Canada , holding key positions at Bombardier Inc. Toronto, Irving Oil Limited, New Brunswick, and Ontario Power in Toronto. He is currently the Managing Director of Hello Energy Ltd in Nigeria.

    Okide Ezigbo holds an LLB from the University of Nigeria, an LLM from Robert Gordon University in Scotland, and an MBA from Kellogg School of Management, Illinois, USA.

  • Less than 30% of Nigerians pay tax

    Less than 30% of Nigerians pay tax

    • Bills get backing at public hearing 

    Public hearing on the four tax reform bills commenced in the Senate yesterday with key stakeholders throwing their weights behind them.

    Senate President Godswill Akpabio told the stakeholders at the hearing that less than 30% of Nigerians pay tax.

    “This is part of the ways we can diversify our economy by making sure that we get it right. I don’t think at the moment that up to 30 per cent of Nigeria pay taxes and yet, 100 per cent of Nigerians want good roads”, he said.

    The proposed laws–  Nigeria Tax Bill (NTB) 2024, Nigeria Tax Administration Bill (NTAB) 2024, Nigeria Revenue Service (Establishment) Bill (NRSEB) 2024 and the Joint Revenue Board (Establishment) Bill (JRBEB) 2024—were presented to the National Assembly for passage by President Bola Ahmed Tinubu in October last year. 

    However, the debate on them caused a storm in the House of Representatives before the lawmakers passed the bills for public hearing.

    A major Northern group, Arewa Think Tank, which had its convener,  Muhammad   Yakubu, in attendance, debunked insinuation that the region was against the bills.

    Read Also: Tinubu serious with Ogoni issues, says Fubara

    Minister of Finance and Coordinating Minister for the Economy  Olawale Edun;  Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL) Mele Kyari;    Federal Inland Revenue Service (FIRS) Chairman Zacchaeus Adedeji; Presidential Committee on Fiscal Policy and Tax Reforms Chairman Taiwo Oyedele;  Nigeria Customs Service (NCS) Comptroller- General   Adewale Adeniyi and Nigerian Bar Association (NBA) former President   Yakubu Maikyau were among the stakeholders at the event. 

    Others were Minister of Trade and Investment Jumoke Oduwole;   Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Chairman Mohammed Bello-Shehu; representatives of the Office of the Attorney-General of the Federation, Institute of Chartered Accountant of Nigeria (ICAN); Association of National Accountants of Nigeria (ANAN) and the Chartered Institute of Taxation of Nigeria (CITN).

    Akpabio challenged lawmakers, stakeholders, and the private sector to unite in overhauling Nigeria’s tax system, which he described as outdated and burdensome.

    He emphasised that taxation should not be a tool of oppression, but a mechanism for national development.

    Highlighting the injustice of tax revenue distribution, the Senate President questioned why states hosting factories that pay VAT receive little benefit while corporate headquarters in other regions collect the bulk of taxes.

    “Taxation should be fair, transparent, and efficient. Every Nigerian deserves a system that works for them, not against them,” Akpabio said.

    He urged Nigerians to move beyond social media debates and engage with the actual bills, emphasising that the Senate’s focus is on building a legacy of good governance, not passing laws arbitrarily.

    With digital innovation and streamlined administration at the heart of the proposed reforms, Akpabio assured that the changes would harmonise tax collection, reduce compliance costs, and boost economic stability.

    “This is more than legislation. It is about the future of our economy. Five years from now, we will look back and say, ‘Yes, thanks to these reforms, we built a stronger Nigeria,’’ he said.

    He added that since some Nigerians are not always willing to pay taxes, the reforms would make it easy for them to pay.

    Akpabio said:  “We are not interested in making laws for ourselves. We want to leave what I will call enduring legacies for the future. And I also believe strongly that President Bola Ahmed Tinubu is quite aware that laws are meant to be obeyed and laws are meant for the good governance of the country.

    “In coming up with reforms, he (Tinubu) is looking at the situation yesterday, looking at the situation today, and looking at Nigeria in the future with the way the global trend is going in terms of economic indices and changes.

    “So, whenever reforms come, sometimes it might be difficult for you to comprehend, but the best place for you to come and ventilate your thoughts is right here in the National Assembly.

    “This gathering is significant because the individuals in this hall understand the legislative process. This is the place where we discuss, analyse, and refine policies for the benefit of our nation.

    “We are here not just to debate but to make informed decisions that will shape Nigeria’s economy. At the House of Representatives, we have been actively engaging various stakeholders, including young minds, to ensure inclusivity in governance.

    “I hope these engagements continue until we have fully addressed all concerns, ensuring that our tax laws serve the best interests of the Nigerian people.

    “Enhancing revenue for national development is a responsibility that concerns every Nigerian – men, women, and children alike.

    “Effective taxation is not just about governance; it is about ensuring that our resources are managed efficiently to build a prosperous future.

    “I think what we need to do is to try our best to even discuss and douse most of the speculations, most of the misconceptions, most of the misleading insinuations because I don’t think there is anybody interested in making a law that will not be in the interest of Nigeria, such a law will not last.

    “We were very determined as people, not to just kill the baby at birth. We decided to make sure that we pass it through second reading and then, we subject it to your scrutiny and that’s what we are doing because the way it works in the National Assembly is that if a bill is submitted, and that bill does not pass through second reading, it can no longer be presented in the life of that Assembly.

    “It was important that we pass the second reading and allow you to do all this and ask all the questions, discuss and at the end, we come to something agreeable for all of us.

     “We  would  oversight government to make sure that whatever revenue comes in is well utilised.’’

    The Senate public hearing continues today, to be followed by the House of Representatives hearing tomorrow.

    Finance Minister Edun reiterated that the bills aim to modernise the nation’s tax laws, enhance compliance, broaden the tax base, and create an environment that fosters investments and job creation.

    He said the reforms would also provide equity, efficiency and economic growth.

    He said: “I   thank the National Assembly for its tremendous support, cooperation, collaboration and advice that have been given over the last 20  months or so to His Excellency,President Bola Ahmed Tinubu, and his administration.

    “It has made for progress. It has made for the efficiency and speed of legislation in particular from which the economy has benefited.

    “I must also say, Mr.  President of the Senate, you have indeed, enriched this session by pointing out that the aim of this tax reform and indeed, the aim of President Tinubu and the tax authorities led by the chairman of FIRS is to tax prosperity, to encourage and to engender and to provide the basis for prosperity, which then leads to higher tax revenue.

    “Those who are not doing so well will be encouraged by allowing them to keep their resources to reinvest so that they can grow bigger and it is not until they are successful that they will be taxed.

    “Likewise, Mr. Senate President, you’ve also pointed out the nexus, the link between government revenue and the provision of key services, economic services, infrastructure and other key drivers of the economy and payment of tax.

    “The two are linked and that’s why there is a need now for this all-important reform as part of Mr. President’s Economic Agenda. It’s another bold step, because we are all witnesses to the macro-economics reforms that have been made over the last 20 months or so, and we can all see the progress that has been made, the success that we are witnessing in terms of the economy growing, the reserves growing, inflation stabilising and the budget deficit coming under control and in particular food prices.

    “The key objective of these reforms is to modernise our tax laws, enhance compliance, broaden the tax base, and create an environment that fosters investment and job creation.

    “So, the reforms will look to provide equity, efficiency, economic growth, and critically today, we’re here to have the feedback from the stakeholders, from the public at large.”

    The Finance  Committee Chairman, Senator Musa Sani  said the reforms were not just about taxation, but about building a fairer, more efficient, and growth-oriented tax system that supports businesses, encourages investments, and improves the lives of Nigerians.

    He said: “Many of our existing tax laws are outdated and no longer reflect modern economic realities. Amending these old legislations is both necessary and urgent to create a tax framework that is transparent, predictable, and conducive to economic development.

    “We acknowledge concerns about marginalisation, disproportionate sharing, and possible biases in tax administration and revenue allocation.

    “However, I assure you that this process will be thorough, inclusive, and guided by the national interest. Our goal is to develop a tax framework that promotes economic prosperity, encourages investment, and strengthens Nigeria’s fiscal sustainability.

    “A fair, transparent, and efficient tax system is fundamental to economic growth and national development.

    “I met President Bola Ahmed Tinubu (GCFR) two days ago on the tax reform bills and he told me that Mr Chairman, Senate Committee on Finance, go and do the needful.’’

    NNPCL GCEO Kyari assured that the entire oil and gas industry was in support of the proposed reforms.

    He said: “The proposed tax reform bills, to us in NNPCL, are very necessary enhancement of growth of the economy through more efficient and effective tax collection mechanism.

    “As the largest taxpayer in Nigeria, NNPCL has studied the reform bills, and found the proposals to be reasonable and necessary.”

  • How states can boost tax revenue, by Oyedele

    How states can boost tax revenue, by Oyedele

    State should target the wealthiest 10 per cent of the Nigerian population to widen their tax nets, the Chairman of the Presidential Fiscal Policy and Tax Reform Committee, Mr. Taiwo Oyedele, has counseled.

    He decried the focus by the state government on the poor majority for tax implementation instead of the high net-worth Nigerians.

    Speaking with reporters in Abuja at the weekend, Oyedele said: “Virtually, every state in Nigeria is chasing the bottom 90 percent to collect taxes. They are allowing the top 10 percent to have a field day.”

    He insisted that the issue of poor tax administration in the country lies with governments failing to collect taxes from high-income earners, which the ongoing Tax Reform Bills seek to address.

    Highlighting the revenue generated from personal income tax (PIT), Oyedele said in 2023, the total PIT collected nationwide amounted to N1.5 trillion.

    The Tax Reform panel chair, who compared the figure to the N10 trillion generated from the removal of fuel subsidies and foreign exchange (FX) subsidies, noted that the substantial revenue comes from the same Nigerians who now face financial difficulties.

    He said: “Even if we declare a tax-free year for personal income tax in Nigeria, every state will still be financially well-off. Do you know why? It means we would forgo N1.5 trillion from PIT, but we are already generating N10 trillion into the federation account from subsidy removal and naira floatation. So, the reforms should be viewed holistically, not just one line of revenue.”

    On supporting small businesses, Oyedele announced that the Reform Bills propose to raise the tax exemption threshold for businesses from N25 million to N50 million in annual turnover.

    Read Also: Lagos, stakeholders discuss new ways to boost tax revenue

    “This move aims to ease the tax burden on small enterprises, allowing them to grow and contribute more sustainably to the economy”, he said.

    Regarding Value Added Tax (VAT), Oyedele noted that three per cent of taxpayers account for 97 per cent of the VAT revenue in the country.

    He listed MTN, Dangote, Access Bank, Transcorp Hotel and large corporations, as some of the top taxpayers in the land.

    According to him, small businesses rarely pay VAT and even when they collect it, they often do not remit it.

    Oyedele said: “These top companies are paying VAT today, and they have the capacity to comply with our proposals. The issue is that most of their VAT contributions are credited to Lagos State because their headquarters are located there, while oil companies contribute VAT to Rivers State.

    “We propose that VAT collected by these large corporations should be credited to the states where their customers consume their goods and services, not just where their headquarters are based.”

    He added that this reallocation of VAT would benefit states, with an additional incentive for them to encourage formalisation.

    “As more businesses enter the formal economy, states will see incremental revenue, the tax reform committee chair explained.

    Noting the significant revenue potential at the subnational level, Oyedele said that 85 per cent of major revenue sources belong to the state and local governments.

    These, he said, include personal income tax, property tax, stamp duties, and VAT (excluding the Federal Capital Territory).

    Corporate income tax, customs duties, and petroleum revenues are shared among the federal, state and local governments, with the subnational governments receiving the largest share, he said.

    “FAAC (Federation Account Allocation Committee) is not federal allocation; it is federation revenue that belongs to all tiers of government. Responsibilities and revenues should match,” Oyedele stated.

     He pointed out that the PIT accounts for less than 10 per cent of Nigeria’s total tax revenue, compared to a global average of 30 per cent.

    “Therefore, state governments must address issues such as multiple taxation and the proliferation of taxing agencies to create a more efficient and fair tax system,” he said.

    The proposed tax reforms, Oyedele said, are designed to stimulate economic growth, improve competitiveness, and ensure shared prosperity.

    For businesses, the reforms will reduce business risks, lower tax rates, and provide tax refunds.

    They will also enhance the ability of companies to deduct interest expenses, benefit from input VAT credits, and receive tax relief and economic development incentives.

    Households will benefit from economic relief measures, lower tax burdens, and exemptions for low-income earners.

    The reforms will also reduce VAT rates for the masses and introduce zero rates on essential goods and services. It will also encourage the growth of small businesses and startups, promote remote jobs, and ensure fair taxation of investment income.

    For the government, the reforms will enhance macroeconomic stability, boost revenue mobilization, and improve the tax-to-GDP ratio.

    By raising its credit rating and lowering the cost of debt, the government will create a healthier fiscal balance, ensuring sustainable economic growth for the nation.

    Oyedele stressed that optimising revenue collection across all levels of government is crucial for Nigeria’s economic development.

    By shifting the focus away from taxing low income earners and struggling businesses, the government can generate more revenue while reducing the financial burden on the poor and small businesses.

  • Supreme Court affirms Halliburton’s $6.9m tax debt to Nigeria 

    Supreme Court affirms Halliburton’s $6.9m tax debt to Nigeria 

    • Orders firm to pay N2m cost to FIRS

    The Supreme Court has affirmed the December 2, 2014 judgment by the Court of Appeal in Lagos upholding the additional assessment of US$6,927,248 made by the the Federal Board of Inland Revenue Service (FBIRS) on the revenue of Harlliburton West Africa Limited (HWAL) for the tax years of 1996, 1997, 1998 and 1999.

    In a judgment on Friday, a five-member panel of the apex court held that the appeal filed by HWAL, marked: SC/CV/311/2014 was without merit.

    In the lead judgment, Justice Emmanuel Agim found that HWAL failed to prove its assumption that its subsidiary in Nigeria had already been assessed on the same revenue and that asking it to pay the $6.9million amounted to double taxation.

    Justice Agim noted that both HWAL and its subsidiary in Nigeria are taxable entities, adding that there wre clear evidence, particularly exhibit F, that there was no assessment of Halliburton’s subsidiary in the revenue in question.

    “On the whole, this appeal fails. It lacks merit. It is accordingly dismissed. The appellant shall pay cost of of N2million to the respondent,” Justice Agim said.

    CA/L/320/09

    The dispute arose when the FBIRS, in 2002, made additional assessment of US$6,927,248 for the tax years of 1996, 1997, 1998 and 1999 on Harlliburton, which it challenged before the Body of Appeal Commissioners (BAC).

    The BAC, in its decision, held in favour of FBIRS, a decision HWAL appealed before the Federal High Court in Lagos.

    HWAL prayed the court to set aside the BAC’s decision by declaring the said additional assessment invalid and directing the FBIRS to refund to it the  US$6,927,248 with interest.

    The additional assessment arose from contract transactions between HWAL, a foreign or non-resident company incorporated in Cayman Islands, and its affiliate operating in Nigeria – Halliburton Energy Services Nigeria Limited (HESNL). 

    It was agreed between HWAL  and HESNL that HWAL would obtain contracts from third parties in Nigeria for execution by HESNL, with billing for the contracts made in United States of America dollars. 

    It was the income in US dollars derived by the HWAL from the services rendered by HESNL to third parties that the FBIRS taxed additionally in  2002 to the tune of US$6,972,248 for the years of 1996 — 1999, a decision HWAL before the BAC and lost.

    As part of its decision, the BAC held that the said revenue was taxable, described it as recharges and ordered the HWAL to pay the assessed amount to $6.9m to FBIRS forthwith.

    Read Also: Supreme Court fixes February 10 to hear APC’s case against Rivers LG election

    Although HWAL complied with the order made by the BAC, it challenged the decision before the Federal High Court in Lagos, ehich held in its favour

    The Federal High Court was of the view that the additional tax amounted to double taxation and set aside the decision of the BAC and ordered FBIRS to refund to the respondent the additional tax of US$6,972,248 to HWAL.

    On appeal to the Court of Appeal, the appellate court, in its judgment on December 2, 2014 faulted the decision of the Federal High Court, set it aside and affirmed the judgment of the BAC, a decision HWAL challenged before the Supreme Court, which was affirmed on Friday.