Tinubu Signs Landmark Tax Reform Bills, Overhauling Nigeria’s Revenue System.
President Bola Tinubu has signed four transformative tax reform bills into law, heralding a significant shake-up of the nation’s revenue collection agencies. The signing ceremony, held at the Presidential Villa in Abuja on Thursday, 26 June 2025, marks a pivotal step towards streamlining Nigeria’s fragmented tax system, boosting investor confidence, and fostering economic growth.
The four bills – the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill – were passed by the National Assembly following months of rigorous consultations with stakeholders across the country. These laws aim to consolidate Nigeria’s tax framework, eliminate inefficiencies, and create a fairer, more transparent system for businesses and citizens alike.
President Tinubu, speaking at the signing ceremony, described the reforms as a “clear departure from previous policies” that unfairly burdened vulnerable Nigerians and shielded inefficiencies. “We are laying a foundation for a tax regime that is fair, transparent, and fit for a modern, ambitious Nigeria,” he said. “These reforms will deliver targeted relief for low-income earners, small businesses, and families working hard to make ends meet.”
The Nigeria Revenue Service (Establishment) Bill, one of the cornerstone pieces of legislation, repeals the Federal Inland Revenue Service (FIRS) Act and establishes the Nigeria Revenue Service (NRS) as the sole agency responsible for collecting federally chargeable taxes. This move will see major revenue-generating agencies, including the Nigeria Customs Service, Nigerian Upstream Petroleum Regulatory Commission, and several federal ministries, cede their tax collection mandates to the NRS. The shift is expected to trigger a significant restructuring of Nigeria’s revenue architecture, ensuring greater efficiency and accountability.
The Nigeria Tax Bill aims to consolidate the nation’s fragmented tax laws into a single, harmonised framework, reducing duplication and simplifying compliance for businesses and individuals. The Nigeria Tax Administration Bill establishes a unified legal structure for tax administration across federal, state, and local government levels, designed to minimise disputes and optimise revenue collection.
The Joint Revenue Board (Establishment) Bill introduces a formal governance structure to enhance cooperation between revenue authorities at all levels. It also establishes a Tax Appeal Tribunal and an Office of the Tax Ombudsman to provide oversight and resolve taxpayer complaints.
According to Zacch Adedeji, Executive Chairman of the NRS (formerly FIRS), the new laws will take effect from 1 January 2026, allowing six months for planning, public education, and alignment with Nigeria’s fiscal calendar. “These reforms are about creating an enabling environment for businesses, reducing poverty, and ensuring equitable resource distribution,” Adedeji stated.
The road to these reforms was not without controversy. The bills faced significant opposition, particularly from northern governors and lawmakers, who argued that the proposed derivation-based Value Added Tax (VAT) distribution model could disadvantage northern states with lower consumption bases. Critics, including the Northern Governors’ Forum, expressed concerns that the reforms might disrupt fiscal federalism and centralise tax authority.
In response, President Tinubu directed the Ministry of Justice to collaborate closely with the National Assembly to address these concerns, ensuring extensive stakeholder engagement. The Presidency has repeatedly assured that the reforms will not impoverish any region or weaken federal agencies but will instead foster sustainable growth and equitable resource allocation. “This is the very essence of democracy,” a statement from the Presidency noted, welcoming the nationwide debate as a testament to Nigeria’s democratic spirit.
The reforms are poised to significantly transform Nigeria’s tax administration, with the government targeting a minimum tax-to-GDP ratio of 18% within the next three years. Nigeria’s current tax-to-GDP ratio of 13.5% lags behind the continental average, contributing to fiscal deficits and reliance on borrowing. By streamlining tax collection and broadening the tax base, the government aims to increase revenue without imposing additional burdens on citizens.
The legislation is also expected to enhance Nigeria’s attractiveness to both domestic and foreign investors. “We have opened the door for new economic and business opportunities. Nigeria is truly ready and open for business – easy in, easy out,” Tinubu declared.
Economic experts have praised the reforms as long overdue, citing Nigeria’s challenges with tax evasion, multiple taxation, and high collection costs. The Presidential Committee on Fiscal Policy and Tax Reforms, led by Taiwo Oyedele, played a central role in shaping the bills, recommending the harmonisation of over 200 taxes into a more manageable framework.
The signing of these bills has been hailed as a testament to President Tinubu’s commitment to economic reform under his Renewed Hope agenda. Senate President Godswill Akpabio, who witnessed the signing, commended the National Assembly’s rigorous review and stakeholder engagement, which prioritised national development over regional sentiments.
As Nigeria prepares for the implementation of these reforms, Tinubu called for collective action, stating, “This is our rallying cry: Simplify. Reform. Grow. Let the world know that Nigeria is open for business, and this time, everyone has a fair shot.”
The new tax laws are expected to usher in an era of fiscal discipline, transparency, and inclusivity, positioning Nigeria as a competitive player in the global economy while ensuring that the benefits of taxation reach all corners of the nation.
