Nigeria recalibrates tax reform as investors watch revenue and policy stability

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ABUJA  — Nigeria has opened a six-week review of its 2025 tax reforms, shifting the focus of the country’s fiscal overhaul from legislation to implementation as businesses adjust to a new framework that took effect in January.

The exercise, led by Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele, will examine implementation gaps, legal ambiguities and unintended consequences, while feeding into the government’s 2027 Finance Bill. The review will cover VAT thresholds, withholding tax, capital gains and multiple taxation, alongside rules affecting digital and cross-border economic activity.

The timing is significant, Nigeria’s four major tax laws, enacted in 2025, replaced a fragmented system with a consolidated framework administered through the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Establishment Act and Joint Revenue Board Establishment Act. The Finance Ministry subsequently issued transition guidelines to clarify how liabilities, audits, incentives and returns should be handled across the old and new regimes.

For investors, however, the review is less about the headline tax rates than about predictability, compliance costs and the treatment of capital. Withholding-tax rules are among the areas under examination, while the government has signalled that multiple taxation and regulatory overlaps remain obstacles to investment.

The broader fiscal objective is to raise domestic revenue without relying principally on higher tax rates. Oyedele has repeatedly argued that Nigeria needs to expand its tax base and bring eligible taxpayers into the formal system rather than simply increase rates.

The government has also linked tax reform to a wider fiscal-modernisation programme. Its ARMOR initiative, supported by the World Bank, is designed to strengthen domestic revenue mobilisation, modernise tax and customs administration and improve public-finance transparency.

The review has already attracted 134 submissions from across Nigeria, covering taxation, debt, transparency, capital markets and cross-border investment.

The immediate test is therefore implementation, whether Nigeria can broaden its revenue base while giving companies clearer rules and investors greater policy visibility.

The recommendations due within six weeks will provide an early indication of how the government intends to balance those competing objectives in the 2027 fiscal cycle.