The Federal Government has given firm assurances to Nigeria's Organised Private Sector (OPS) that its sweeping fiscal reforms are designed to boost competitiveness and create a thriving business environment, not to impose new burdens. This commitment was central to a major virtual dialogue with stakeholders on the country's new fiscal and regulatory framework.
Government Outlines Vision for Business-Friendly Reforms
Dr. Jumoke Oduwole, the Minister of Industry, Trade and Investment, led the government's message. She stated that the ongoing reforms are in direct alignment with President Bola Tinubu's "Nigeria First" policy, which prioritises domestic investors. "Under the leadership and bold reforms introduced by the President, Nigeria has entered a new era of fiscal discipline, regulatory clarity and economic modernisation," Oduwole declared.
She emphasised the administration's goal is to build a predictable and simplified landscape to attract both local and foreign capital. The dialogue, which included key agencies like the Nigerian Export Processing Zones Authority (NEPZA), the Federal Inland Revenue Service (FIRS), and the Presidential Committee on Fiscal Policy and Tax Reforms, aimed to ensure a smooth transition before the policies take effect on January 1, 2026.
Major Tax Cuts and Incentives Unveiled
Taiwo Oyedele, Chairman of the Presidential Committee on Tax Reforms, unveiled the specific, transformative incentives that form the core of the new legislation. He described them as changes that should excite the business community nationwide.
The headline announcement is a significant reduction in Corporate Income Tax (CIT) from 30% to 25%. This cut will be enacted via an executive order from the President, following advice from the National Economic Council.
An even larger benefit comes from changes to Value-Added Tax (VAT). Starting in January, businesses will be able to claim full VAT input credits on capital expenditure, overheads, and services. Oyedele revealed this measure is worth approximately N3.4 trillion to the private sector—more than double the value of the CIT reduction.
For small businesses, a major relief has been introduced: a N100 million annual turnover threshold below which companies are exempted from paying taxes. This policy is already encouraging a surge in new business registrations with the Corporate Affairs Commission.
Clarifications on SEZs and Capital Gains
Oyedele addressed two critical areas of concern. On Special Economic Zones (SEZs), he clarified the need for a level playing field. Operators selling goods to the domestic market will now be required to pay taxes. "Free zone operators can sell up to 25% to the domestic market without paying corporate income tax until January 1, 2028, after which they will be taxed on sales to the local market," he explained.
He firmly challenged the idea that free zones should compete tax-free with local Nigerian businesses, stating no country permits such an arrangement.
Regarding Capital Gains Tax on shares, the reforms are designed to protect the vast majority of investors. Sales below N150 million annually, with capital gains not exceeding N10 million, are fully exempted. Pension funds, mutual funds, and real estate investment trusts also enjoy exemptions, meaning over 99% of capital market investors are shielded.
While supporting the reforms, the Managing Director of NEPZA, Olufemi Ogunyemi, appealed for a sunset period of about 10 years to allow zone operators to adjust to the new fiscal regime.
FIRS Reaffirms Support for Private Sector Growth
Echoing the government's supportive stance, the Executive Chairman of FIRS, Zacch Adedeji, reaffirmed the administration's commitment. "The vision of the President is actually to support the private sector. He's not ready to tax the seed for the fruit. He's not ready to tax the investment for the return," Adedeji stated, using a powerful metaphor to underscore the policy's intent to nurture, not stifle, business growth.
The collective message from the government is clear: these historic reforms, described by Oyedele as the most far-reaching since independence, are crafted to stimulate investment, simplify the tax system, and ultimately drive Nigeria's economic modernisation forward.
