Kickstart the New Year: Essential Tax Law Insights for Nigerians from an Economist

Introduction
Implementation of Tax Laws
Controversy Surrounding the Reforms
President's Assurances
Expert Opinion
Impact on Low-Income Earners
What Businesses Should Expect
Call for Caution and Accountability

Nigeria on Thursday, January 1, 2026, began the implementation of its highly anticipated new tax laws and fiscal reforms amidst widespread public apprehension.

President Bola Ahmed Tinubu signed the legislation into law in June 2025, which took effect on January 1, despite numerous requests from various groups for a delay to allow for further evaluation.

Among those advocating for the Federal Government to postpone the implementation were the Nigeria Labour Congress (NLC), the Minority Caucus of the House of Representatives, former Senate Leader Ali Ndume, human rights lawyer Femi Falana (SAN), former Minister of Education Oby Ezekwesili, Bauchi State Governor Bala Mohammed, and multiple opposition parties.

The debate surrounding the tax reforms intensified when lawmaker Abdulsamman Dasuki raised concerns regarding alleged modifications to the published version of the tax law. In response to the outcry, the leadership of the National Assembly mandated that the laws be re-published to address the issues raised.

In defense of the reforms, President Tinubu reassured Nigerians that the new tax laws would not impose additional burdens on them.

This sentiment was echoed by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, who asserted that the implementation was essential to revamp the country’s revenue framework.

Further facilitating the rollout, Justice Bello Kawu of the Federal Capital Territory High Court dismissed a lawsuit aimed at halting the implementation of the tax laws.

Despite these reassurances, concerns about the potential impact of the reforms on individual incomes, prices, businesses, and corporate operations have continued to generate public unease.

In an interview with DAILY POST on Wednesday, economist and professor, Godwin Oyedokun, encouraged Nigerians to move past fear and misinformation, emphasizing that the reforms require “calm understanding rather than panic.”

He clarified that the goal of the new tax laws is not to penalize taxpayers but to enhance government revenue sustainably.

“The aim of the new tax laws is not to complicate life for Nigerians.

“It is designed to improve revenue efficiency, plug leakages, and reduce the country’s dangerous reliance on oil income,” he stated.

According to Oyedokun, Nigeria’s tax-to-GDP ratio remains among the lowest in the world, restricting the government's ability to finance infrastructure, healthcare, education, and security without excessive borrowing.

“What the government seeks to do is broaden the tax base, rather than universally increase tax rates,” he remarked.

Impact on Low-Income Earners

Addressing concerns that the reforms could exacerbate hardship, Oyedokun indicated that most low-income earners are unlikely to be directly impacted.

“Personal income tax thresholds and exemptions remain in place to safeguard the most vulnerable Nigerians,” he explained.

“The larger burden is anticipated to fall on higher-income earners, large corporations, and sectors that have historically maintained weak compliance,” he added.

However, he cautioned that indirect effects could still arise.

“There is a legitimate risk that some businesses may transfer compliance costs to consumers through increased prices, particularly in an inflationary climate.

“However, this largely depends on how the laws are enforced and the competitiveness of the markets,” he noted.

What Businesses Should Expect

For businesses, the economist recognized that the reforms may initially seem demanding.

“Stricter reporting requirements and tighter enforcement will raise compliance costs in the short term,” he said.

“However, these measures aim to ensure fairness so that companies that fulfill their tax obligations are not disadvantaged while others evade the system,” he remarked.

He added that effective implementation could ultimately benefit the private sector.

“A transparent and predictable tax system can promote business growth through enhanced infrastructure, improved public services, and reduced policy uncertainty,” Oyedokun stated.

Call for Caution and Accountability

Oyedokun advised Nigerians to remain informed and actively engaged as the new laws take effect.

“Nigerians should approach these reforms with informed caution, not panic,” he said. “Public education, dialogue, and engagement with tax authorities are crucial.”

He also emphasized the government's responsibility to ensure accountability.

“Taxes must translate into visible public value.

“Without service delivery and transparency, even the best-designed tax laws will encounter resistance,” he warned.

According to him, the success of the new tax regime will ultimately rely on trust, effective communication, and responsible governance.

“There may be short-term discomfort, but widespread harm is not a given.

“If implemented fairly and with sensitivity to current economic realities, these reforms can benefit Nigeria in the long run,” Oyedokun concluded.

Frequently Asked Questions

What are the new tax laws in Nigeria?

The new tax laws are a set of reforms aimed at enhancing government revenue, improving compliance, and broadening the tax base, which took effect on January 1, 2026.

How will these tax reforms affect low-income earners?

Most low-income earners are unlikely to be directly affected as personal income tax thresholds and exemptions remain in place to protect them.

Eze Chidiebere Paul

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