The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, has said the new tax laws scheduled to take effect in January 2026 will empower Nigerians and drive inclusive economic growth.
Oyedele spoke on Friday at a media workshop in Lagos, where he explained that previous tax reforms created multiple levies that placed heavy burdens on the informal sector, which he described as the backbone of national development.
According to him, the new reforms are designed to make it easier for small businesses to grow by offering incentives for registration and structured expansion.
“If we make life easy for them, the nano becomes micro, micro becomes small, small becomes medium, medium becomes large, and large becomes multinational,” he said.
He disclosed that Company Income Tax (CIT) has been reduced from 30 to 25 per cent, while businesses with an annual turnover below N100 million will pay zero CIT.
“You now have the motivation to formalise your business, because you have tax benefits rather than the disadvantage we used to see,” he added.
Oyedele noted that tax incentives are only part of the benefits of formalisation, stressing that registered businesses are compelled to become more organised and productive, thereby supporting inclusive growth.
“If big companies grow by 40 per cent, few will feel it. If the informal sector grows by 2 per cent, all Nigerians feel it,” he said.
He added that the reduced corporate tax rate would help attract more foreign direct investment, while the harmonisation and elimination of multiple taxes and taxing agencies would improve Nigeria’s global competitiveness.
He recalled that economic shocks in 2023 pushed Nigeria’s tax-to-GDP ratio below 10 per cent and forced government to spend about 97 per cent of its revenue on debt servicing.
According to him, the new reforms will also protect low-income earners, who previously paid about 96 per cent of income tax. From January next year, such earners will be fully exempt from income tax.
He further disclosed that individuals earning N100,000 or less would enjoy additional support through VAT relief on essential items.
Oyedele said Nigeria narrowly avoided economic collapse in 2023 but is now on a recovery path due to the reforms introduced since mid-2023, which he described as necessary to stabilise the economy and rebuild investor confidence.
He dismissed claims that government has increased taxes or engaged in excessive borrowing, noting that several taxes have been cancelled, reversed or harmonised.
He added that the new law introduces zero VAT on food, education, health, rent and transportation, while also strengthening the capital market.