The Federal Government has commenced a six-week review of the 2025 tax laws, with the exercise expected to address implementation challenges and provide recommendations for the proposed Finance Bill 2027.
The review will focus on contentious and emerging issues in the new tax regime, including Value Added Tax thresholds, withholding tax, capital gains, multiple taxation, taxpayer rights and the administration of tax refunds.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday in Abuja while inaugurating the Technical Subcommittee on Fiscal Policy and Tax Reforms.
Oyedele said the implementation of the tax laws had exposed areas where greater clarity, refinement and further reforms were required.
“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 four major tax laws — the Nigeria Tax Act 2025, Nigeria Tax Administration Act 2025, Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025 — took effect on January 1, 2026.
The minister said the latest exercise should not be interpreted as an attempt to undo the reforms, but as a mechanism for improving their implementation in response to lessons from the economy.
He said, “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.”
According to him, the review will also examine wider issues relating to fiscal policy and management, public financial management, debt, transparency, capital markets and cross-border capital flows.
Oyedele disclosed that 134 submissions had been received from the six geopolitical zones following the government's call for public input, with additional submissions submitted in hard copies.
He said stakeholders had proposed clearer and simpler rules around VAT thresholds, withholding tax and capital gains, while also seeking stronger measures to address multiple taxation.
They also called for improved coordination among revenue authorities and greater use of digital systems and data sharing to eliminate repeated requests for information from taxpayers.
Other recommendations received by the government included stronger taxpayer protections, faster processing of refunds and measures to reduce the burden on small businesses.
Stakeholders also proposed changes aimed at strengthening investment and competitiveness in mining, renewable energy, healthcare and the capital market.
Oyedele charged the subcommittee to consider the wider economic consequences of proposed tax changes, especially for low-income households, workers and businesses.
“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 cautioned that measures designed to increase government revenue could have unintended consequences if they impose greater costs on the wider economy.
“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,” he said.
The minister further described complexity in tax administration as an additional burden on businesses, warning that complicated rules could increase compliance costs and create room for discretion and 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,” Oyedele said.
The committee will also review the Deduction of Tax at Source Regulations 2024 and prepare revised withholding tax regulations.
It is expected to examine the Companies Income Tax (Significant Economic Presence) Order 2020 and develop an updated framework that aligns with the new tax laws and international practices.
Oyedele said withholding tax should continue to function primarily as an advance-payment and compliance mechanism rather than become an additional financial burden on businesses.
He expressed concern that withholding funds belonging to companies could undermine investment and expansion, particularly given the high cost of capital in Nigeria.
“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 subcommittee 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, Budget Office of the Federation and Nigerian Investment Promotion Commission.
Representatives of SMEDAN, 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 members.
Others include representatives of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture and the four major accounting firms — Deloitte, EY, KPMG and PwC.
Folorunsho said the committee would ensure that its proposals were technically sound, practical to administer and responsive to the realities confronting taxpayers, businesses and government.
He said the panel would consult widely during the six-week exercise while seeking to strengthen revenue mobilisation without imposing unnecessary burdens on taxpayers.
The committee is expected to submit its recommendations at the end of the six-week review period, ahead of further consideration of the Finance Bill 2027.
Leave a Reply