Tax Experts Urge Proactive Compliance to Avoid Fallout from New Nigerian Tax Law
Tax experts in Nigeria have issued a strong call for proactive compliance and strategic adaptation as the country's evolving tax reforms reshape its fiscal framework. They warn that businesses and individuals must adjust quickly to avoid penalties and regulatory risks. The experts made these remarks during separate presentations examining the implications of the tax reform laws signed in June 2025, describing the changes as a significant shift aimed at promoting transparency, expanding the tax base, and aligning Nigeria's revenue administration with global standards.
Key Changes and Implications for Businesses
Adewale Ajayi, Partner and Head of Tax Regulatory and People Services at KPMG Africa, emphasized that the reforms represent a deliberate transition from revenue extraction toward economic growth, compliance efficiency, and investment promotion. He noted that businesses will face stricter compliance obligations, enhanced audit mechanisms, and increased accountability for finance executives. Ajayi urged organizations to strengthen internal controls, upgrade systems, and align operational processes with the new legal provisions to mitigate risks.
Similarly, Olamide Obajimi, Partner at Olaniwun Ajayi LP and Chairman of the Tax Appeals Tribunal, Lagos Panel 2, described the reforms as Nigeria's most extensive tax overhaul in decades. He highlighted far-reaching implications for taxpayer obligations, compliance costs, and business operations. Obajimi explained that the legislation establishes a consolidated fiscal framework and positions the Nigeria Revenue Service as the primary federal tax authority. It also introduces institutional mechanisms to improve coordination among tax authorities and strengthen taxpayer protection.
Specific Reforms and Compliance Requirements
Obajimi detailed several key changes under the Nigeria Tax Act, including a uniform companies income tax rate of 30 percent for all non-small companies. The reforms expand eligibility thresholds for small company exemptions and integrate capital gains into chargeable income. Additionally, a four percent development levy has been introduced, along with streamlined capital allowance claims and tightened rules governing deductible expenses. These rules require taxes linked to expenses to be settled before deductions can be claimed.
Joy Chijioke, Associate Director at EY Tax Services, also urged taxpayers and organizations to embrace proactive compliance. She stressed that the technology-driven framework necessitates proper registration, accurate record-keeping, full income declaration, and timely engagement with tax authorities. Chijioke noted that the reforms, effective from January 2026, introduce stronger monitoring capabilities that make non-compliance easier to detect.
Advice for Adaptation and Future Outlook
Chijioke advised organizations to strengthen internal governance structures, update accounting systems, and invest in staff training to meet new compliance expectations. She emphasized that early adaptation will determine how successfully businesses navigate Nigeria's changing tax environment. The experts collectively agreed that while the reforms introduce stricter obligations, they also present opportunities for improved efficiency, stronger governance, and enhanced investor confidence for organizations willing to align with the evolving tax landscape.
In summary, tax experts are urging a swift and comprehensive response to Nigeria's new tax laws to avoid negative fallout and leverage potential benefits in the reformed fiscal system.
