New Tax Regime Commences January 2026 as President Signs Tax Reform Bills into Law

A new regime of taxation will come into effect from January 2026, following the signing into law of four fiscal reform bills by President Tinubu.

The new Acts aim to simplify Nigeria’s tax system. The new Nigeria Tax Bill combines tax laws, cuts income tax for low earners (0% on the first N800,000), and frees small businesses (under N25m turnover) from profit tax.

Value Added Tax rises to 15% by 2030, but essentials like food are exempt. The Nigeria Tax Administration Bill ensures uniform tax collection. The Nigeria Revenue Service Bill creates a new tax agency for efficiency.

Conflict resolution and collaboration are enhanced by the Joint Revenue Board Bill. These changes may lower taxes for many but could favour richer states, raising concerns in less developed areas, like the north. 

The four bills, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill, were passed by the National Assembly after extensive consultations with various interest groups and stakeholders.

When the new tax laws become operational, they are expected to significantly transform tax administration in the country, leading to increased revenue generation, improved business environment, and a boost in domestic and foreign investments. 

The historic presidential assent to the bills at the Presidential Villa, Abuja, was witnessed by the Senate President, Speaker of the House of Representatives, Senate Majority Leader, House Majority Leader, chairman of the Senate Committee on Finance, and his House counterpart.  

One of the four bills is the Nigeria Tax Bill (Ease of Doing Business), which aims to consolidate Nigeria’s fragmented tax laws into a harmonised statute. By reducing the multiplicity of taxes and eliminating duplication, the bill will enhance the ease of doing business, reduce taxpayer compliance burdens, and create a more predictable fiscal environment. 

The second bill, the Nigeria Tax Administration Bill, will establish a uniform legal and operational framework for tax administration across federal, state, and local governments.

The Nigeria Revenue Service (Establishment) Bill, the third bill, repeals the current Federal Inland Revenue Service Act and creates a more autonomous and performance-driven national revenue agency—the Nigeria Revenue Service (NRS). It defines the NRS’s expanded mandate, including non-tax revenue collection, and lays out transparency, accountability, and efficiency mechanisms. 

The fourth bill is the Joint Revenue Board (Establishment) Bill. It provides for a formal governance structure to facilitate cooperation between revenue authorities at all levels of government. It introduces essential oversight mechanisms, including establishing a Tax Appeal Tribunal and an Office of the Tax Ombudsman.