Minister of State for Finance Taiwo Oyedele has acknowledged errors in the country’s ambitious new tax reform laws, even as implementation kicked off in January 2026.
Speaking at the 2026 Annual Conference of the Nigerian Bar Association (NBA) Section on Legal Practice, Oyedele assured stakeholders that a corrective finance bill is in the works to plug the identified gaps.
Oyedele, who chaired the Presidential Fiscal Policy and Tax Reforms Committee that midwifed the sweeping changes, addressed concerns head-on during a fireside chat themed “From Policy to Practice: Making Sense of Nigeria’s New Tax Reforms.”
The remarks, shared via the committee’s official X handle on Friday, came amid lingering questions over discrepancies between the versions of the laws passed by the National Assembly and those eventually gazetted for public use.
The minister attributed the errors to the practical realities of law-making in a complex environment: “manual processes and multiple stages of review.” He stressed that the reforms themselves remain guided by core principles of transparency, fairness, and clear policy intent, rather than arbitrary enforcement.
“Policy intent is crucial in interpreting and implementing tax laws,” Oyedele emphasized. He pointed to longstanding distortions in the old system—where an individual could face an effective tax rate of about 19%, but incorporating the same business as a company often pushed the burden above 40%. “This was the opposite of global best practice,” he noted.
Consistency, he added, is non-negotiable for investor confidence. “If policies can change overnight, it sends the wrong signal to investors. Consistency is critical.”
On equity, Oyedele painted a sobering picture of Nigeria’s economic reality: “Nearly half of working Nigerians earn less than N70,000 monthly. Taxing them aggressively would be unjust.” The new framework, he argued, deliberately shields low-income earners and small businesses in recognition of their limited capacity.
The admission addresses unease that first surfaced publicly in December 2025, when Hon. Abdulsammad Dasuki (PDP, Sokoto) raised a point of privilege on the floor of the House of Representatives.
Dasuki claimed that his review of the gazetted copies—obtained from the Ministry of Information—revealed “material differences” from the versions debated, harmonized, and approved by both chambers of the National Assembly.
“What was passed on the floor is not what is gazetted,” Dasuki declared at the time, describing the situation as a potential breach of legislative procedure and constitutional norms.
The disputed laws form part of a landmark package signed into law in mid-2025, consolidating Nigeria’s fragmented tax regime into four major pieces of legislation: the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act. Full implementation of key components began on January 1, 2026.
National Assembly members, including caucuses, had previously distanced themselves from certain gazetted versions, fueling public skepticism about the integrity of the final output.
Despite the hiccups in drafting and gazetting, Oyedele highlighted several progressive features designed to make Nigeria’s tax system more equitable and business-friendly:
- Elimination of minimum tax for loss-making businesses, ending the practice of taxing capital instead of profit.
- Exemption of essential goods and services — including food, education, and healthcare — from Value Added Tax (VAT).
- Consolidation of multiple overlapping tax laws into a streamlined quartet of statutes.
- Protection for low-income earners and millions of small businesses through higher exemption thresholds and simplified compliance.
These measures, the minister said, aim to incentivize formalization, reduce the tax burden on the vulnerable, and create a predictable environment that aligns more closely with international norms.
Oyedele called for a more transparent legislative process going forward, one in which every version of a bill is publicly available for scrutiny. The proposed finance bill, he indicated, will serve as the vehicle to rectify technical and substantive issues without derailing the broader reform objectives.
As lawyers, businesses, and ordinary Nigerians begin navigating the new tax landscape, the minister’s intervention at the NBA conference seeks to reassure while acknowledging imperfections.
Whether the corrective bill moves swiftly enough to restore full confidence remains to be seen, but in a country where tax policy has long been criticized for complexity and inequity, the willingness to own errors and commit to fixes marks a notable shift in tone.
For now, the message from Oyedele is clear: the destination of a fairer, simpler, and more competitive tax regime has not changed; only the road map requires some urgent patching. Implementation continues, but with eyes wide open to the need for refinement.
WHAT YOU SHOULD KNOW
Nigeria’s new tax reforms, though now in force since January 2026, contain acknowledged errors arising from manual drafting and review processes. Minister of State for Finance, Taiwo Oyedele, has confirmed that a corrective finance bill is being prepared to address the gaps and discrepancies between the passed and gazetted versions.
Despite the flaws in execution, the core objectives of the reforms remain intact—to create a fairer, simpler, and more business-friendly tax system that protects low-income earners, exempts essentials like food, education, and healthcare from VAT, removes punitive minimum tax on loss-making businesses, and promotes consistency and transparency to attract investors.
The government is committed to fixing the technical issues without abandoning the progressive direction of the reforms.
