With just four days to go before the implementation of Nigeria’s most sweeping tax overhaul in decades, the nation’s socioeconomic landscape is heating up with diverging reactions. Set to take effect from January 1, 2026, the newly enacted tax reform laws have drawn applause from some quarters and intense criticism from others — particularly organised labour and small business operators.
The Reform at a Glance
The tax reform package — consisting of four major laws: the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act — was signed into law in June 2025 by President Bola Tinubu, after extensive legislative review.
The government and its reform committee say the changes are designed to simplify and modernise a long-fragmented tax system, encourage investment, and make the fiscal regime fairer and more growth-oriented.
Under the new regime:
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Around 97% of small businesses will be exempted from key taxes like Corporate Income Tax (CIT), Value-Added Tax (VAT), and Withholding Tax (WHT).
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Thresholds and exemptions for low-income and middle-income earners have been introduced to reduce the burden on ordinary workers.
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A single tax authority — the Nigeria Revenue Service (NRS) — will replace the existing Federal Inland Revenue Service to harmonise tax collection.
Despite these planned reliefs and simplifications, the approach to implementing the changes has sparked fierce debate.
Manufacturers Back the Reform
The Manufacturers Association of Nigeria (MAN), has publicly backed the tax reform laws. MAN’s Director-General, Segun Ajayi-Kadir, described the regime as pro-business and anticipates significant relief for manufacturers, particularly from the multitude of nuisance taxes levied at sub-national levels.
According to Ajayi-Kadir, the reforms will free manufacturers from petty levies and create a more predictable tax environment — crucial for planning and investment. He also pointed out that businesses with turnovers below ₦100 million annually would benefit from exemptions on major taxes, which he believes will stimulate growth at the grassroots level.
Labour Threatens Revolt Over Exclusion and Lack of Clarity
In stark contrast, the Nigeria Labour Congress (NLC), has warned of a possible revolt should the reforms be implemented without sufficient consultation and transparency. The labour body insists it was neither involved in drafting the laws nor adequately briefed after they were signed.
NLC spokesperson, Benson Upah, criticised the lack of public enlightenment and accused the government of sidelining workers — who are among the largest group of taxpayers. Upah expressed concerns over opaque processes, particularly around how new tax agents might operate and how revenues will be collected and used, warning that these could provoke widespread resistance if unresolved.
In a related development, the NLC President has urged citizens to reject any version of the tax laws that appear distorted or improperly gazetted, further signalling labour’s readiness to mobilise if key grievances aren’t addressed.
SMEs Call for Suspension
Small and medium-sized enterprises — key drivers of Nigeria’s economy — have also raised red flags. Organisations like the Association of Small Business Owners of Nigeria (ASBON), argue that many micro and small enterprises do not yet understand the new tax framework, and rushing its enforcement could lead to widespread confusion and failure of compliance.
ASBON President, Femi Egbesola, stressed the need for a suspension of implementation to allow for more comprehensive stakeholder engagement, clearer guidelines, and even a pilot phase before nationwide rollout.
He warned that inadequate awareness might trigger resistance or active protest among the small business community.
Government Defends the Timeline
In defence of the timeline, Taiwo Oyedele — Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms — has maintained that delaying the reforms would mean retaining an outdated and overburdened tax system.
He warned that such delays could lead to higher prices for basic goods and services, counteracting the intended relief that the new regime aims to deliver.
The government argues that comprehensive tax reform is essential to boosting compliance, reducing wasteful incentives, and broadening the tax base without introducing new levies.
What Happens Next
With only days to go before January 1, stakeholders remain sharply divided. Supporters in the manufacturing sector are optimistic about the potential for a more streamlined and investment-friendly tax system.
In contrast, labour unions and SMEs are demanding greater transparency, stakeholder inclusion, and a slower, more consultative rollout.
As implementation nears, the government faces the challenge of balancing urgent economic reform with widespread acceptance — a task critical to ensuring the success of one of Nigeria’s most ambitious fiscal policy shifts in recent history.
