The Federal Government has reiterated that all lawyers and law firms across Nigeria are legally required to remit 7.5 percent Value Added Tax (VAT) to the Federal Inland Revenue Service, FIRS, in accordance with the new tax reform law set to commence on January 1, 2026.
According to the government, the new regulation covers professional services, including legal practice, which falls within the taxable category under Nigeria’s fiscal framework. The reform aims to widen the tax base, prevent evasion, and boost government revenue for development projects across the country.
The clarification followed growing concerns from some lawyers, particularly younger practitioners, who questioned their inclusion in the VAT payment system. The FIRS Chairman, Zacch Adedeji, while responding to the issue, explained that professionals such as lawyers cannot be exempted from VAT because they earn income from services that are specifically listed as taxable under the law. “A professional like a lawyer can generate much higher profits than a typical trader. Lawyers are not exempt because they render professional services clearly defined in the law,” he said.
Adedeji stressed that all legal practitioners must register with the FIRS, file VAT returns, and remit collections promptly, adding that failure to comply would attract penalties as provided by the law. He also noted that the FIRS has the legal power to appoint third parties to recover unpaid taxes from defaulters living outside the country.
However, the government noted that some groups are exempted from the VAT regime, including traders, low-income earners earning less than N800,000 per year, military personnel, and small businesses with a turnover not exceeding N100 million annually. It added that where VAT is mistakenly charged to any exempt individual or business, refunds can be processed within 30 days.
Meanwhile, Abiola Sanni, SAN, Dean of the Faculty of Law, University of Lagos, commended the reform as a significant step in Nigeria’s tax evolution. He urged state governments to align their tax systems with the federal framework to promote fiscal stability and ensure that generated revenue is effectively used to improve infrastructure, education, and healthcare.
