Understanding Nigeria’s New Tax Law: Separating Facts from Misconceptions
By: Abayomi Queen – Abuja
The recent passage of Nigeria’s new tax law has sparked widespread discussion across media platforms, social media, and professional circles.
While the law aims to streamline taxation, broaden the country’s revenue base, and improve compliance, a wave of misinformation and public concerns has accompanied its rollout.
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The Nigeria Tax Act (NTA), 2025, consolidates multiple existing tax statutes into one unified tax code, simplifying Nigeria’s tax framework and eliminating overlapping and conflicting provisions
The Nigeria Tax Administration Act (NTAA), 2025 – This law harmonises tax administration and compliance procedures across federal, state and local governments to improve efficiency and reduce disputes.
Nigeria Revenue Service (Establishment) Act (NRSEA), 2025 – It establishes the Nigeria Revenue Service (NRS) as the new revenue collection authority, replacing the Federal Inland Revenue Service (FIRS), with broader responsibility for federal tax and revenue administration.
Joint Revenue Board (Establishment) Act (JRBEA), 2025 – This act creates the Joint Revenue Board to coordinate tax efforts across all tiers of government and includes mechanisms such as the Tax Appeal Tribunal and a Tax Ombudsman to strengthen dispute resolution and taxpayer protection.
The four new law seeks to modernise Nigeria’s tax framework, providing clarity on personal income tax, company tax, value-added tax (VAT), and digital economy taxation. The government’s stated objective is to make tax administration more efficient, reduce loopholes, and ensure that every taxpayer contributes fairly to national development.
Despite these intentions, rumours and misunderstandings have taken hold. Some reports claim that the law introduces “new taxes on salaries” or will automatically increase deductions from workers’ paychecks.
These claims are incorrect. The law does not create additional taxes for employees on their existing salaries, but it strengthens enforcement mechanisms to ensure that previously under-declared income is properly assessed.
Another concern circulating is that small businesses and informal sector operators will face heavy burdens.
While the law expands the tax net, provisions exist for graduated thresholds, simplified filing requirements, and exemptions for low-income earners. The goal is to include more taxpayers in a transparent system without stifling business activity.
Experts note that much of the anxiety stems from limited public understanding of the law’s specifics. ranging from digital economy taxation, where online transactions above certain thresholds are now taxable, reflecting global trends in digital taxation
The law clearly outlines penalties for evasion aiming to discourage underreporting without imposing arbitrary fines.
The law is designed to modernise Nigeria’s tax system, promote fairness, and increase revenue mobilisation for critical public services.
With proper awareness, education, and compliance support, Nigerians can benefit from a clearer, more efficient tax system without fear of arbitrary burdens.
(DEMOCRACY NEWSLINE NEWSPAPER, JANUARY 9TH 2026)
