President Bola Tinubu has signed four comprehensive tax laws aimed at transforming Nigeria’s tax system to make it more streamlined, equitable, and growth-oriented.

According to Port Harcourt-based digital media expert and public affairs analyst, Johnmartins Ijere, the new tax laws are designed to reduce complexities, support small businesses, and protect low-income earners while boosting government revenue.

Among the major highlights is the retention of the Value Added Tax (VAT) rate at 7.5%, contrary to earlier proposals for a 12.5% increase. In addition, essential goods and services—including food, healthcare, education, rent, and public transport—are now zero-rated for VAT, a move expected to reduce inflationary pressure.

The new revenue-sharing structure for VAT will now allocate 30% based on consumption, 50% equally among states, and 20% according to population size—ensuring a fairer distribution of national income.

The Four New Tax Laws:

1. Nigeria Tax Act – Consolidates over 50 small taxes into one streamlined tax code.

2. Tax Administration Act – Establishes uniform tax rules across federal, state, and local levels.

3. Nigeria Revenue Service Act – Replaces the Federal Inland Revenue Service (FIRS) with an independent agency.

4. Joint Revenue Board Act – Enhances intergovernmental tax coordination and introduces a Tax Ombudsman and Tribunal.

Key Beneficiaries:

Low-income earners earning below ₦1 million yearly are exempt from income tax and receive rent relief.

Small businesses with turnover under ₦50 million are exempt from company income tax and benefit from simplified filing procedures.

Large corporations enjoy lower corporate tax rates (dropping to 25% by 2026) and VAT recovery on expenses.

Charitable and educational institutions are offered tax incentives on non-commercial income.

Ijere noted that the reforms are part of a broader strategy to raise Nigeria’s tax-to-GDP ratio from 10% to 18% by 2026, aligning with continental benchmarks, without placing extra burden on vulnerable citizens.

The new laws are expected to boost government funding for critical services like infrastructure, education, and healthcare, while encouraging greater voluntary tax compliance nationwide.