Table of Contents
- FIRS Assurance on Development Levy
- Consolidation of Charges
- Public Concerns Addressed
- Enhancing Economic Competitiveness
- Exemptions for Small Businesses
- Clarification on New Tax Framework
The Federal Inland Revenue Service (FIRS) has reassured Nigerians that the much-debated 4 percent development levy on imported goods will not impose an extra tax burden on businesses.
In a statement issued on Wednesday, the agency explained that the levy is a consolidation of several existing charges intended to streamline the tax system and enhance the business environment.
It noted that public concerns regarding the Nigeria Tax Act (NTA) and the Nigeria Tax Administration Act (NTAA) largely arise from "misinterpretations," especially related to the new levy structure.
The FIRS stated that the reform aims to boost economic competitiveness, safeguard current incentives, and ensure long-term fiscal stability.
The agency clarified that combining multiple levies into a single 4 percent charge will lower compliance costs, eliminate uncertainty, and put an end to the period of conflicting charges from various government agencies.
Additionally, it mentioned that small businesses and non-resident companies are exempt from this levy, providing relief for those most vulnerable and economically sensitive.
"This consolidation reduces compliance costs, removes unpredictability, and concludes the era of multiple agency-driven levies. The law also exempts small businesses and non-resident companies, thereby protecting firms that are particularly susceptible to economic fluctuations," the FIRS stated.
This clarification arrives amid concerns from businesses that the federal government’s new tax framework, set to be implemented in January 2026, would heighten their financial burden.
Will the 4 percent development levy increase the tax burden on businesses?
No, the FIRS has assured that the new 4 percent development levy will not impose an additional tax burden on businesses. It is a consolidation of existing charges aimed at simplifying the tax structure.
What is the purpose of the 4 percent development levy?
The purpose of the 4 percent development levy is to streamline multiple charges into a single levy, thereby reducing compliance costs, eliminating unpredictability, and enhancing the overall business environment.
Are there any exemptions to the new levy?
Yes, small businesses and non-resident companies are exempt from the 4 percent development levy, providing necessary relief to those most vulnerable to economic challenges.
Eze Chidiebere Paul
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