The federal government has defended the newly enacted tax laws, saying the reforms are not new burdens but measures to simplify Nigeria’s tax system, eliminate multiple levies, and boost investor confidence.
Nigeria Tax Act (NTA) and Nigeria Tax Administration Act (NTAA) sparked nationwide discussions, with some citizens questioning their effect on businesses. Tax authorities, however, insisted that the reforms had been widely misunderstood. They said the laws were aimed at modernising tax administration, enhancing transparency, and strengthening revenue generation without stifling growth.
Technical Assistant on Broadcast Media to the Executive Chairman of the Federal Inland Revenue Service (FIRS), Arabinrin Atoyebi, explained that the four per cent Development Levy was not an additional charge. Atoyebi said the levy consolidated several existing levies, including Tertiary Education Tax, NITDA Levy, NASENI Levy, and Police Trust Fund Levy, into a single, transparent payment.
According to her, the consolidation will ease compliance, reduce duplication, and provide predictability for businesses that have struggled with multiple agency collections.
She added that small and non-resident companies were exempt, as the law protected vulnerable enterprises while promoting fairness.
Atoyebi further clarified that claims suggesting the removal of Free Trade Zone (FTZ) incentives were false. She said all existing benefits remained intact, but new guidelines will ensure companies in the zones focussed on export-driven production rather than domestic trading.
She explained that FTZ firms could sell up to 25 per cent of their output locally without losing exemptions, and a three-year transition period had been provided for investors to adjust. The reforms, she added, aligned Nigeria’s FTZ operations with global standards in countries such as the UAE and Malaysia.
The government also introduced a 15 per cent Minimum Effective Tax Rate (ETR) for large multinationals in line with the OECD/G20 global tax agreement, which had been endorsed by more than 140 countries.
Atoyebi said the move ensured Nigeria retained revenue that could otherwise be collected abroad under international “top-up” tax rules, while also applying the same standard to large domestic corporations to maintain fair competition.
She added that the new chargeable gains framework allowed investors to sell shares and reinvest in other Nigerian companies within the same year without paying tax on the gains — a move expected to boost venture capital, private equity, and start-up growth.
“The reforms are not about raising taxes; they are about making the system more efficient and growth-oriented,” Atoyebi said.
She added that the laws would improve investor confidence, strengthen public finances, and create a stable environment for economic growth.
Folalumi Alaran
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