NESG Urges Government to Amend Tax Act, PIA, and Electricity Law to Boost Business Environment
The Nigeria Economic Summit Group (NESG) has called on the National Assembly to amend key economic laws, including the Nigeria Tax Act 2015, the Petroleum Industry Act (PIA), and the Electricity Act 2023. This recommendation aims to improve Nigeria's business environment by addressing regulatory challenges and fostering a more enabling climate for enterprises.
Policy Brief Unveiled in Abuja
The recommendation was presented in Abuja during the unveiling of a policy brief on priority legislative actions needed to support businesses. The document, developed by the Ernest Shonekan Centre for Legislative Reforms and Economic Development, a subsidiary of NESG, highlights the urgent need for legal reforms to drive economic growth.
Tax Reforms for Small Businesses and Forex Recovery
On the Nigeria Tax Act, NESG recommended aligning the definition of small businesses with provisions in the Companies and Allied Matters Act to better reflect their contribution to GDP, employment, and exports. The group also proposed amending provisions to allow companies to deduct foreign currency expenses using official exchange rates published by the Central Bank of Nigeria (CBN) or other approved channels. This would enable businesses sourcing forex at higher rates to fully recover their costs.
Additionally, NESG advised that compliance costs, data privacy, and cybersecurity risks linked to digital fiscal tools in the Tax Act should be carefully assessed, particularly for micro, small, and medium enterprises (MSMEs). The group warned that poorly implemented provisions could increase operational costs and discourage business growth.
Electricity Sector Reforms and State Collaboration
On the Electricity Act, NESG emphasised the need for stronger collaboration between distribution companies and state governments to attract investment. It said state-level legal frameworks should support a business-friendly environment that improves returns on investment in the power sector. The group also urged states to address key challenges such as energy theft, poor metering, low revenue collection, and infrastructure protection.
Furthermore, NESG recommended targeted interventions to improve access to meters in low-income and rural communities, which would enhance tariff collection and sector viability.
Strengthening the PIA Framework
NESG called for amendments to the Petroleum Industry Act to address gaps and maximise opportunities in the oil and gas sector. The group noted that while the PIA provides a comprehensive legal and fiscal framework, improvements are needed to sustain investor confidence and optimise sector performance.
Concerns Over Law Overlaps and Implementation
Nigeria's ongoing economic reforms are anchored on three major frameworks—the tax reform laws, the PIA, and the Electricity Act 2023—aimed at improving fiscal management, governance, and investment inflows. However, NESG raised concerns about possible overlaps between these laws, especially where tax provisions intersect with sector-specific regulations, potentially creating uncertainty for investors.
Stakeholders agree that reforms are necessary but stress that effective implementation is critical to achieving the desired outcomes. The group identified the Nigeria Tax Act, Petroleum Industry Act, and Electricity Act as top priorities for legislative action to drive economic progress.
