Understanding the FG’s Stance on Proposed Amendments to National Tax Laws
Taiwo Oyedele, Chairman, Presidential Tax Reform Committee
The Federal Government of Nigeria has clarified that the proposed alterations to the country’s tax framework are corrective measures rather than wholesale changes, ensuring the core integrity of existing tax laws remains intact. Officials stated on Thursday, 15 January 2026, that the legislative refinements currently under review are intended to streamline administration and eliminate ambiguities without disrupting the broader fiscal landscape or significantly altering the tax burden on businesses.
The clarification comes as the National Assembly evaluates the Tax Reform Bills, which have sparked debate regarding their potential impact on sub-national revenue sharing and corporate compliance requirements. The executive branch maintains that these "minor changes" are essential to modernise the system and align it with global best practices in digital economy taxation and transparency.
The Scope of Proposed Alterations
The government’s position focuses on the principle of legislative continuity. According to the Presidential Committee on Fiscal Policy and Tax Reforms, the amendments target specific clauses within the Value Added Tax (VAT) Act and the Companies Income Tax Act (CITA). These adjustments seek to simplify the tax filing process for Small and Medium Enterprises (SMEs) and clarify the jurisdictional boundaries between federal and state collection agencies.
Key areas of focus in the legislative updates include:
Administrative Harmonisation: Reducing the number of overlapping taxes that currently contribute to the "multiple taxation" burden on the private sector.
Clarity on Derivation: Addressing concerns raised by various regional blocs regarding the distribution of VAT revenue.
Technological Integration: Formalising the use of automated systems for real-time tax assessment and remittance.
Maintaining Fiscal Stability
Investors and policymakers have expressed concerns that frequent alterations to tax laws could lead to fiscal instability. However, the Federal Government asserts that these amendments are "fine-tuning" mechanisms. By addressing minor inconsistencies now, the government aims to prevent future legal disputes that often lead to prolonged litigation and revenue leakage.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has previously emphasised that the overarching goal is to increase the tax-to-GDP ratio from its current level to approximately 18% over the next three years. This objective relies on broadening the tax base and improving collection efficiency rather than simply increasing tax rates.
Institutional and Public Response
The response from the organised private sector remains cautious but optimistic. The Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) have consistently advocated for a tax regime that encourages production. While the government maintains that the alterations are minimal, stakeholders are closely monitoring the final draft of the bills to ensure that "minor changes" do not introduce hidden costs or complex compliance hurdles.
The Federal Inland Revenue Service (FIRS) has already begun preparing its internal infrastructure to accommodate these shifts, signaling that the transition will be managed through a gradual implementation phase to allow corporate entities sufficient time to adjust their accounting systems.
The Federal Government’s assurance that the proposed alterations will not fundamentally destabilise Nigeria’s tax laws reflects a commitment to fiscal predictability. For the investment community, the focus remains on the implementation of these reforms and their ability to foster a more transparent business environment. As the legislative process concludes, the success of these amendments will be measured by their capacity to simplify the tax code while meeting the government’s ambitious revenue targets for 2026 and beyond.
