The Federal Government has commenced a six-week review of Nigeria's 2025 tax laws, responding to concerns raised by businesses and stakeholders over Value Added Tax (VAT) thresholds, withholding tax rules, capital gains tax treatment, and multiple taxation issues. Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, announced the review on Thursday in Abuja while inaugurating the Technical Subcommittee on Fiscal Policy and Tax Reforms.
Review Scope and Stakeholder Concerns
The review will focus on several major areas of concern, including VAT thresholds, withholding tax rules, capital gains tax treatment, and the issue of multiple taxation faced by businesses across Nigeria. The exercise comes months after the country's major tax reforms took effect, with the government acknowledging that some challenges only became apparent when the laws began interacting with real businesses and everyday economic activities.
Stakeholders across Nigeria's economic sectors submitted 134 feedback proposals to the federal government, detailing challenges with the implementation of the new tax laws. The submissions were received after the government requested public feedback from Nigerians across different geopolitical zones.
Government's Position on the Reforms
Oyedele, who also chairs the Presidential Fiscal Policy and Tax Reforms Committee, said the government's experience with implementing the new laws showed that some parts needed to be explained better, refined, or adjusted. He stressed that the review is not intended to cancel the reforms but to improve how they work.
“The real test begins when the law meets the economy, as businesses interpret it, administrators implement it, investors respond to it, and citizens experience it. Implementation inevitably reveals areas requiring clarification, refinement or further reform,” the minister said. He added, “The Finance Bill 2027 should not be seen as just another annual legislative exercise. Our task is not to rewrite the 2025 reforms, but to preserve their fundamental principles while learning from implementation and responding to new economic realities.”
The four major tax laws — the Nigeria Tax Act 2025, Nigeria Tax Administration Act 2025, Nigeria Revenue Service (Establishment) Act 2025, and Joint Revenue Board (Establishment) Act 2025 — officially took effect on January 1, 2026.
Key Issues Raised by Businesses
Some of the major issues raised by stakeholders include making VAT rules easier to understand, reviewing withholding tax requirements, improving capital gains tax rules, and tackling multiple taxation by different government agencies. Businesses also called for better coordination among revenue authorities, more digital systems, and data sharing to reduce situations where taxpayers are repeatedly asked to submit information already available to government agencies.
Other suggestions included stronger taxpayer rights, quicker tax refunds, support for small businesses, and policies that encourage investment in sectors like mining, renewable energy, healthcare, and capital markets.
Oyedele said tax policies must be judged by how fair, efficient, and competitive they are, not just by how much money they generate. “Every tax reform produces winners and losers; the question is whether a policy is fair, efficient and competitive, not whether it is popular with everyone,” he said. He also warned that complicated tax rules can become another burden for businesses. “Complexity is itself a tax; it raises compliance costs and creates room for discretion and arbitrage. Where two approaches achieve the same outcome, choose the simpler one,” Oyedele said.
Committee Mandate and Composition
One major area the committee will examine is withholding tax, which the minister said should not become an extra financial burden on companies. He explained that businesses already struggle with high borrowing costs, and holding back their funds through withholding taxes could affect expansion and growth.
Co-chair of the committee and Chairman of the Tax Advisory Committee, Albert Folorunsho, addressed participants during the inauguration, emphasizing the need for practical recommendations that balance government revenue with business growth. “In a country where the cost of capital is very high, if you withhold the funds that businesses should use for expansion for even one year, it comes at a huge cost,” he said.
Apart from preparing recommendations for the Finance Bill 2027, the committee will also review existing tax regulations, including the Deduction of Tax at Source Regulations 2024 and the Companies Income Tax (Significant Economic Presence) Order 2020.
The six-week review committee is made up of representatives from key government agencies and private sector groups, including the Nigeria Revenue Service, Central Bank of Nigeria, Nigeria Customs Service, Debt Management Office, Budget Office of the Federation, Manufacturers Association of Nigeria, Nigerian Economic Summit Group, tax bodies, and major accounting firms.
Folorunsho said the panel would focus on creating recommendations that work for taxpayers, businesses, and government. “Our recommendations must therefore be technically sound, administratively practicable, and responsive to the realities confronting taxpayers, businesses, and government,” he said. He added that despite the short timeline, the committee would engage relevant stakeholders and work towards improving revenue collection without adding unnecessary pressure on Nigerians and businesses.
