Legal proceedings have thrown the planned January 1, 2026, launch of Nigeria's comprehensive new tax regime into uncertainty. An Abuja High Court, sitting as a vacation court, commenced a crucial hearing on Monday, December 29, 2025, on a lawsuit aiming to stop the enforcement of the recently enacted tax laws.
Legal Challenge Against Tax Reforms
The suit, filed by The Incorporated Trustees of the African Initiative for Abuse of Public Trusts, contests the validity and implementation of major tax reform Acts. These laws were passed by the National Assembly and subsequently assented to by President Bola Ahmed Tinubu. The defendants in the case include the Federal Republic of Nigeria, the President, the Attorney-General of the Federation, the leadership of the National Assembly, and the Assembly itself.
The plaintiff's core allegation centers on alleged discrepancies within the new tax legislation. In a Motion Ex Parte presented to the court, they are urgently seeking an interim injunction. This order would restrain the Federal Government, the Federal Inland Revenue Service (FIRS), the National Assembly, and all relevant agencies from implementing the new laws until the main suit is resolved.
Specific Prayers Before the Court
The plaintiff's requests are detailed and aim for a swift legal process. They have asked the court to specifically block the implementation of four key Acts:
- The Nigeria Tax Act, 2025
- The Nigeria Tax Administration Act, 2025
- The Nigeria Revenue Service (Establishment) Act, 2025
- The Joint Revenue Board of Nigeria (Establishment) Act, 2025
Furthermore, they seek to restrain President Tinubu, personally or through any agency created under the new laws, from enforcing the Acts in any state until the motion on notice is heard. Additional prayers include an order for an accelerated hearing of the substantive suit, an abridgement of time for defendants to file their counter-affidavits to just five days, and permission to serve court processes through substituted means.
Controversy Surrounds Fiscal Restructuring
The disputed tax reform package is a cornerstone of the Tinubu administration's broader fiscal restructuring agenda. The government's stated goals are to widen the tax base, improve revenue collection efficiency, and reduce Nigeria's heavy reliance on borrowing. The reforms consolidate multiple existing laws to modernize tax administration, strengthen compliance, and enhance coordination between federal and state revenue agencies.
However, the laws have been mired in intense controversy since their passage. Critics, including civil society groups, labour unions, and some state governments, have raised several red flags. Their concerns include alleged alterations to the Acts after legislative passage, a perceived lack of adequate stakeholder consultation, potential infringement on states' fiscal autonomy, and the feared burden on businesses and low-income earners.
The National Assembly leadership and the Presidency have consistently dismissed allegations of post-passage alterations. They maintain that the laws were duly passed, gazetted, and remain intact. Officials argue that these reforms are critical for stabilizing Nigeria's economy in the face of rising debt servicing costs and dwindling oil revenues.
Awaiting the Court's Crucial Ruling
After listening to arguments from the plaintiff's counsel, the court has fixed a ruling on the application for the interim injunction. This impending decision is being keenly awaited by the Presidency, the National Assembly, state governments, and citizens nationwide. The court's ruling will ultimately determine whether the controversial and wide-reaching tax reforms will take effect as scheduled on New Year's Day, 2026, or face a significant legal delay.
