Recently, President Bola Tinubu signed into law four radical tax reform bills that are expected to transform Nigeria’s fiscal and revenue framework. This is highly commendable as these Nigerian tax laws bring together many existing tax laws into one simplified and accessible document, making compliance easier for people and businesses. The four laws are the Nigeria Tax Act, 2025, the Nigeria Tax Administration Act, 2025, the Nigeria Revenue Service (Establishment) Act, 2025, and the Joint Revenue Board (Establishment) Act, 2025. Notwithstanding initial controversies, misconceptions and misunderstandings, these revolutionary tax legislations were passed by the National Assembly after extensive consultations with various interest groups and stakeholders. Having become operational, the new tax laws are expected to significantly transform tax administration in the country, leading to increased revenue generation, improved business environment, and a boost in domestic and foreign investments.
According to a pre-signing press release dated June 25, 2025 by Bayo Onanuga, Special Adviser to the President (Information and Strategy), one of the four bills, now Act, is the Nigeria Tax Bill (Ease of Doing Business), which aims to consolidate Nigeria’s fragmented tax laws into a harmonised statute. By reducing the multiplicity of taxes and eliminating duplication, the bill will enhance the ease of doing business, reduce taxpayer compliance burdens, and create a more predictable fiscal environment. The second bill, the Nigeria Tax Administration Bill, will establish a uniform legal and operational framework for tax administration across federal, state, and local governments. The Nigeria Revenue Service (Establishment) Bill, the third bill, repeals the current Federal Inland Revenue Service Act and creates a more autonomous and performance-driven national revenue agency— the Nigeria Revenue Service (NRS). It defines the NRS’s expanded mandate, including non-tax revenue collection, and lays out transparency, accountability, and efficiency mechanisms. The fourth bill is the Joint Revenue Board (Establishment) Bill. It provides for a formal governance structure to facilitate cooperation between revenue authorities at all levels of government. It introduces essential oversight mechanisms, including establishing a Tax Appeal Tribunal and an Office of the Tax Ombudsman.
Many experts and commentators have hailed these innovative tax laws. According to Aderonke Atoyebi, it is one of the most transformative economic decisions Nigeria has seen in years. For those who understand how broken the old tax system has been, how it confused businesses, frustrated workers, and punished small traders, these new laws come as a relief. The Nigerian Tax Act, 2025 brings together many existing tax laws into one simplified and accessible document, making compliance easier for people and businesses. Together, these laws lay the groundwork for a more accountable and functional tax system. She was optimistic that the change to VAT distribution is one of the most practical parts of the Tax Reform Bills. For years, states contributed to VAT collection but had no direct benefit tied to their efforts. That has now changed. Under the new formula, each state will keep 30 per cent of the VAT it generates. Another 50 per cent will be shared equally among all states, while the final 20 per cent is allocated based on population. This means states with strong commercial activity will receive a more accurate return. It also gives every state a reason to grow its local economy, support traders and service providers, and take tax collection more seriously. Another provision in the new law is the exemption of small businesses from company income tax. Any business earning below N50m annually will no longer be taxed under that category. This is a good one, especially in a country like ours where micro and small enterprises make up a large part of the economy. By easing this pressure, the law encourages more of these businesses to register formally, access financial services, and expand steadily without fear of disruption. The Tax Reform Acts, for once, speak the language people understand. People just want to know what they are paying, why they are paying it, and that it won’t change tomorrow without warning. What this means for Nigerians is a more stable and predictable system, one where people can focus on earning a living without second-guessing government demands. For the self-employed and those doing small-scale businesses, it brings relief from the constant anxiety of multiple levies and unclear charges. For salary earners, especially those at the lower end, it protects more of their income and removes deductions that once went unquestioned. It gives room for young people building digital businesses, women running home-based enterprises, and artisans trying to grow their work to operate more confidently. This reform also strengthens the link between tax and development by creating systems that can actually be tracked and understood. When revenue is collected properly and shared appropriately, it becomes easier to hold leaders accountable. Over time, this helps restore trust, not just in tax, but in governance itself.
Beyond the euphoria of the expected gains of the new tax laws and fiscal regimes introduced by President Tinubu, it is sadly noted that issue of prompt payment of tax or default in tax payment does not attract severe consequences for political office seekers and or holders. Under the respective provisions of the national Constitution, payment of tax is neither a qualification/eligibility criteria or disqualification/ineligibility criteria for anyone seeking election as President/Vice President (under sections 131, 137 and 142(2)); Senator and Member of the House of Representatives (under sections 65 and 66); Governor/Deputy Governor (under sections 177, 182 and 187(2)); Member of the State House of Assembly (under sections 106 and 107) and even Chairman of a Local Government. Section 24(f) of the Constitution of the Federal Republic of Nigeria, 1999 as amended merely provides that “It shall be the duty of every citizen to declare his income honestly to appropriate and lawful agencies and pay his tax promptly”. Of course, this is obeyed more in breach than observance. Worse still, as stated earlier, payment of tax as and when due or at all does not form one of the grounds for qualification or disqualification from seeking election or holding public offices in Nigeria. Following this constitutional construct, decisions of the Courts have gone on to certify that tax payment or default in payment of tax is not a ground for eligibility or ineligibility from seeking or holding elective public office. Under section 84(3) of the Electoral Act, 2022, a political party shall not impose nomination qualification or disqualification criteria, measures, or conditions on any aspirant or candidate for any election in its constitution, guidelines, or rules for nomination of candidates for elections, except as prescribed under sections 65, 66, 106, 107, 131, 137, 177 and 187 of the Constitution. Thus, an election petition on qualification or disqualification cannot be based on any ground outside those stated in the Constitution. Needless to overemphasise that this state of the law constitutes a major setback to the new regime of tax laws currently in operation in Nigeria. Is it not plain ridiculous, for instance, that a Presidential aspirant in a political party who obtains nomination form for as much as one hundred Million Naira will not be under legal obligation to show evidence of prompt payment of tax and declaration of his or her asset? Hence. this is a call for urgent constitutional amendment to make prompt payment of tax as a pre-condition or ground for eligibility/qualification for election into public office in Nigeria. Anyone seeking to be elected President/Vice President, Senator, Member of the House of Representatives, Governor/Deputy Governor, Member of the State House of Assembly and Chairman of a Local Government must pay his tax promptly failing which he or she should be constitutionally ineligible to be elected in that stead. This should also apply mutatis mutandis to appointive positions. Any person who fails, refuses or neglects to pay his or her tax promptly or as and when due is, to put it mildly, irresponsible and not a good citizen.
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