The Nigerian Economic Summit Group (NESG) has declared that the 2025 tax reform acts, which birthed four tax laws, hold the promise of bequeathing to Nigeria a more equitable, efficient, and transparent tax system provided its implementation is timely, inclusive, and firmly rooted in transparency and accountability.
It expressed these views in its occasional paper series titled: “The 2025 Nigerian Tax Reform Acts: Taxing the Fruits, Not the Seed,” which was released on Tuesday.
The four new tax laws are the Nigeria Tax Act 2025; Nigeria Tax Administration Act 2025; Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025.
The signing into law by President Bola Tinubu on June 26, 2025, according to the NESG, laid the “groundwork for a more transparent, efficient, and pro-growth tax system” in Nigeria.
The NESG also pointed out that Nigeria’s tax system has long been plagued by complexity, weak enforcement, and low public trust, stressing that the new reforms aim to reverse this situation by making taxation simpler, fairer, and more focused on value and productivity.
“Thus, the core principle is to ‘tax the fruit, not the seed’—targeting profits and consumption, not early-stage income or small businesses,” it added.
According to the NESG, the 2025 tax reforms mark a major step forward in Nigeria’s fiscal evolution, noting that for individuals, especially low-income earners, the reforms offer relief through exemptions on wages, essential goods, and job-loss compensation.
“For small businesses, reduced tax levies, including income and withholding taxes, are expected to ease compliance burdens and stimulate growth. Larger businesses will benefit from input tax credits, though they must meet stricter compliance requirements,” it said.
The NESG said that the objectives of the new tax laws are to simplify the tax system, broaden the base, protect vulnerable groups, and improve tax collection and accountability.
“In specific terms, the newly enacted tax reform laws pursue several policy, institutional and economic goals, which are to “increase domestic revenue mobilisation and raise Nigeria’s tax-to-GDP ratio to 18 per cent within five years, thereby reducing reliance on oil revenue and debt financing of public expenditures,” it added.
Other objectives of the tax reform laws are to simplify and harmonise the tax system by merging fragmented tax laws into a coherent framework in a manner that would make compliance easy for individuals and businesses.
The NESG also said the new laws would help Nigeria modernise tax administration with the establishment of the Nigeria Revenue Service (NRS) with the mandate to collect and account for all revenues accruing to the federation.
It said: “In addition, the digitalisation of all aspects of tax administration aims to improve efficiency and curb leakages.”
It also said that transparency and taxpayers’ confidence would be enhanced with the introduction of a Tax Tribunal and Tax Ombudsman to resolve disputes and protect taxpayer rights.
The NESG also stated that the laws would promote fairness and equity with its exemption of essentials like food and medicine from VAT.
“It would also simplify compliance for micro and small businesses earning under N50 million annually and foster the strengthening of intergovernmental coordination through the setting up of a Joint Revenue Board to align federal, state, and local tax policies. Also, it will revise revenue-sharing mechanisms to reward productivity while preserving equity,” it said.
The NESG also remarked that the newly introduced tax laws would support economic competitiveness and growth by lowering compliance costs to attract investment.
Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has reiterated the importance of fiscal reforms and stronger international cooperation to support economic growth especially in developing countries like Nigeria.
Speaking at the 4th International Conference on Financing for Development (FFD4) in Sevilla, Spain, on Tuesday, Edun said it was time to rebalance the global financial system to better reflect the needs and realities of developing economies.
In a statement signed by Director, Information and Public Relations, Mohammed Manga, Edun highlighted Nigeria’s reforms to improve tax administration, drive fiscal discipline, and create an enabling environment for private sector investment.
He said: “In today’s evolving global landscape, self-reliance is essential. We are prioritising digital infrastructure, transparency, and institutional reform to deliver more for Nigerians with every naira spent.”
He also stressed the urgent need for stronger international collaboration on tax fairness and illicit financial flows, areas where African economies continue to face systemic disadvantage.
The event brought together senior officials from the United Nations, OECD, EU, and development banks, alongside finance ministers from countries including Nepal, Malawi, and Uruguay.
It further stated that as the Nigerian government continues to drive economic reforms, Edun’s message at the UN finance summit underscores the country’s commitment to achieving sustainable economic growth and development for the benefit of all Nigerians.
Nume Ekeghe and Dike Onwuamaeze
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