“There is no imposition of tax on individuals who were not previously taxable,” Oyedele declared. “Online content creators, influencers, income from virtual assets, and other income-generating activities have always been subject to tax. What the new laws do is provide clarity and ensure fairness, such as allowing deductions for losses where applicable.”
He further clarified that income given as a gift (and not as a payment or commercial transaction) remains non-taxable under the revised framework. This announcement comes amid anxiety in parts of the public that the tax reforms set to take effect on January 1, 2026 would extend new levies on small businesses, freelancers and the “gig economy.” The committee, however, maintains the aim is to rationalize and harmonize Nigeria’s system, reducing complexity rather than increasing burdens.
Why the Administration Says It Must Ask More of the Wealthy
Low Tax Base, High Expectations
One of the strongest drivers behind the tax reforms is Nigeria’s historically low tax-to-GDP ratio. The country collects relatively little tax revenue relative to the size of its economy, compelling reliance on borrowing and leading to recurring fiscal deficits. Analysts have long tied this structural challenge to Nigeria’s inability to fund major infrastructural and human capital projects without external borrowing or oil-driven windfalls.
President Bola Tinubu made clear from the onset of his administration that tax reform was a key pillar in shoring up the country’s fiscal foundations. The reforms aim to create a more sustainable revenue model, reduce dependence on oil and debt, and reposition Nigeria as a more credible player in global investment circles.
Under the new regime, a more progressive structure is envisioned with greater relief for low-income earners and more obligations for high earners and corporations. The aim is to shift the center of fiscal burden toward those best able to pay, rather than squeezing marginal earners.
Oyedele reaffirmed this principle: “The objectives of the reforms have been clear from the very beginning: reduce the tax burden on the masses, harmonise and simplify tax rules to address the multiplicity of taxes, and promote a modern, business-friendly and globally competitive tax system. Our approach is people-centric, growth-focused, and efficiency-driven.”
Harmonisation and Simplification: From 60+ Taxes to Under 10
A recurrent criticism of Nigeria’s tax regime has been fragmentation. Over successive administrations, multiple layers of taxation federal, state, local, sector-specific levies and miscellaneous charges have made compliance complex and costly, especially for small businesses. Some individuals needed to navigate dozens of different levies, permits and ancillary charges, sometimes overlapping or duplicative.
To address this, the new tax laws propose reducing more than 60 existing taxes and levies into fewer than 10 under a harmonised architecture. This consolidation is meant not only to ease compliance but also to eliminate overlapping and opaque charges that in practice often behave like hidden taxes.
Oyedele cited several past levies already reversed or suspended as evidence that the administration is not rigidly expansionist in its tax agenda. Among those referenced by the committee are:
- The 5% levy on airtime and data;
- The cybersecurity levy on bank transfers;
- The carbon tax on single-use plastics;
- Certain excise duties on selected vehicles.
These rollbacks are positioned as proof that the tax reforms are not indiscriminate burdening, but a reengineering grounded in fairness, clarity and economic growth.
How the Reforms Treat Income from Virtual Assets & Content Creation
One of the flashpoints of public debate has been the taxation of income from virtual assets (cryptocurrency, NFTs, digital tokens) and online content creation (influencers, digital marketing, monetized social media). Some feared these categories would be newly targeted by the government under the reforms.
Oyedele pushed back strongly against that perception, arguing that virtual asset income is not a new target but merely being placed on firmer legal ground. According to him:
- Income earned from virtual assets has always been subject to taxation under the existing Personal Income Tax Act (PITA); the new laws simply clarify the scope and enforceability.
- The reform does not bring into the tax net individuals who were previously untaxed; instead it codifies what is already implied by existing statutes.
- Losses on virtual asset income can be deducted (where applicable) under the new clarifications.
- Gifts (i.e., transfers without exchange value) remain non-taxable.
This clarification was widely covered by media analysts and industry commentators. Still, much of the concern from the public was not about whether taxation was lawful but about enforcement whether enforcement would disproportionately affect smaller participants or whether thresholds and reliefs would be sufficient to protect the vulnerable.
Practical Examples: Clarifying Crypto Taxation
Economist Kalu Aja offered illustrative examples to help Nigerians understand how crypto-related income is taxed under the current framework and how the clarifications affect real people:
- Small Gift Example: If an unemployed individual receives $100 (approximately N100,000) from a relative abroad as a gift, they do not pay income tax because the amount falls below the N800,000 threshold; however, VAT and bank transfer charges can still apply.
- Small Investment Gain: If that N100,000 is used to buy Bitcoin and later sold for N200,000, the N100,000 profit falls below the taxable threshold so no income tax is due.
- Large Investment Gain: If the same investment yields N2,000,000 (a N1,900,000 profit), that profit exceeds the N800,000 threshold and would therefore attract income tax under established rules.
- Corporate vs. Personal: If the transaction is carried out under a registered company account, the individual may not be liable for personal income tax on those gains. The company itself may, however, be liable for corporate taxes unless it qualifies for exemption (for example, by having turnover under the N50 million threshold introduced for small company relief).
These examples were used to demonstrate that the reforms aim to protect small, sporadic actors while capturing meaningful revenue from sustained or high-value activity.
Policy experts highlighted the importance of clear guidance on cost basis, record keeping and the timing of taxable events (i.e., whether tax is assessed at realization, at conversion to naira, or at settlement). The committee’s position is that the law clarifications will reduce ambiguity and improve compliance outcomes.
The New Top Rate & Who Pays What
One particularly contentious point is the new top rate of personal income tax. Oyedele disclosed that under the upcoming regime, high-income individuals roughly the top 3% of earners will face a maximum tax rate of 25%. Meanwhile, individuals earning the national minimum wage will be fully exempt from personal income tax.
Currently, the national minimum wage in Nigeria is N70,000 per month, as approved by President Tinubu in 2024. Oyedele emphasized that this tiered structure is deliberate: lowering taxes on mass earners while placing additional obligations on those with greater capacity.
Critics, however, argue that the exemption threshold (for instance, an annual taxable income of N800,000 or less being exempt) might still leave many low-income earners precariously close to the tax net, particularly given inflationary pressures and regional cost differences.
Oyedele countered such criticisms by pointing out that the previous tax structure (dating in many respects from the 2011 framework) had become regressive in practice: inflation and wage stagnation produced fiscal drag, pushing many low- and middle-income earners into higher tax burdens despite limited increases in real purchasing power. Under the new structure, he said, the burden for most will either fall or remain unchanged while the ultra-rich will contribute a visibly larger share.
He also asserted that more than 90% of public and private sector workers would see a reduced tax burden under the revised schedule a claim that analysts say will require careful verification during implementation.
Legislative Steps, Gazette Publication and Timing
Earlier in the year, Nigeria’s National Assembly moved the proposed tax reform bills through the legislative process. The House of Representatives passed its version in March; the Senate passed its own version in May 2025. Following committee reconciliations and executive review, President Bola Tinubu signed the package into law on June 26, 2025. The bills were then published in the official government gazette; a necessary step to make the new legal framework enforceable.
The four new laws that form the backbone of the reform are:
- Nigeria Tax Act (NTA), 2025
- Nigeria Tax Administration Act (NTAA), 2025
- Nigeria Revenue Service (Establishment) Act (NRSEA), 2025
- Joint Revenue Board (Establishment) Act (JRBEA), 2025
Together these acts are designed to modernize tax administration, unify revenue management, and create a single, more transparent agency to oversee tax collection and compliance.
Despite formal adoption, government sources have communicated a phased approach to implementation. Certain highly sensitive measures such as a proposed fuel surcharge have been postponed to avoid immediate public hardship. That pragmatic step reflects government sensitivity to cost-of-living pressures and the political economy of fiscal reform.
Voices From Across the Spectrum
Supportive Perspectives
Many economists and policy watchers see the reforms as overdue and necessary. They argue Nigeria must move from one-off spending to structural revenue generation, especially given volatile oil markets and uncertain global capital flows.
Supporters highlight several expected benefits:
- Improved revenue sustainability: predictable domestic revenue reduces reliance on borrowing.
- Better investment climate: simplifying taxes and removing duplicative levies can improve the ease of doing business.
- Global alignment: the reforms bring Nigeria closer to international tax standards for digital income and multinational taxation.
Some commentators called out provisions that gradually reduce corporate tax for certain classes of businesses while expanding small business thresholds measures intended to stimulate formal-sector enterprise growth.
Criticisms and Concerns
Nevertheless, the reforms have drawn skepticism and criticism from multiple quarters. Key concerns include:
- Threshold adequacy: Some say the exemption threshold (for instance N800,000 annually) may be insufficiently generous, exposing marginal workers to tax.
- Enforcement fairness: Worry exists that enforcement will hit informal and small actors harder than the well-advised wealthy.
- Double taxation risk: There are concerns about overlapping withholding mechanisms for example PAYE and later reconciliation assessments that may create friction.
- Implementation capacity: A new, centralized administration needs strong technology, staffing and governance to avoid corruption and leakage.
Observers warn that if these operational risks are not managed, public confidence could erode and compliance could fall undermining potential revenue gains.
What Citizens and Businesses Should Know & Do
For Nigerians seeking to prepare for the new regime, the committee and independent advisors emphasize the following practical steps:
1. Educate Yourself
Follow official publications from the Nigeria Revenue Service (NRS), the Ministry of Finance, and reputable advisory firms. Public clarification and administrative guidance will be rolled out in stages; missing those updates could lead to avoidable compliance issues.
2. Maintain Clean Records
Digital asset trades, content monetization and online business activities will increasingly require transparent bookkeeping. Clear records of purchase price (cost basis), sale proceeds, dates and fees will matter for any eventual audits or reconciliations.
3. Seek Professional Advice
Those near threshold margins, or with mixed income streams, will benefit from consulting tax professionals. Early planning can reduce surprises and ensure lawful optimization.
4. Monitor Implementation Details
Because some measures will be phased in, watch for secondary legislation, administrative practice notes and the publication of regulations that clarify interpretive details.
5. Engage in Public Oversight
Civil society, the media and professional associations should continue to monitor the roll out to ensure transparency, fairness and that safeguards are in place to protect low-income and informal groups.
Implementation Risks and Mitigation
Implementation will determine whether the reforms deliver on their promise. Key risk areas and mitigation strategies include:
- Administrative capacity: investing in modern IT infrastructure and staff training reduces errors and leakage.
- Data integration: secure interagency data sharing helps reconcile withholding and final assessments, lowering disputes.
- Dispute resolution: accessible appeals and fast-track dispute processes prevent long-drawn litigation.
- Targeted support: temporary reliefs or targeted grants for vulnerable groups can blunt short-run shocks.
- Transparency: public dashboards showing collection, allocation and expenditure increase accountability.
Experts argue that technology and administrative reform accompanied by clear taxpayer communication will be decisive. Without them, even well-designed laws risk underperformance.
Wider Economic Implications
If successfully implemented, the reforms could yield several macroeconomic benefits. Greater domestic revenue reduces reliance on oil revenue and sovereign borrowing, which in turn may ease currency pressure and provide fiscal space for capital investment in infrastructure, education and health.
Conversely, poorly managed reform risks creating short-term economic drag. Businesses facing increased compliance costs may delay investment; households adjusting to new withholding practices could experience liquidity stress. Hence the importance of phased implementation, targeted exemptions and pragmatic timing.
Conclusion: Reform With Caution, But Also Hope
Nigeria stands at a difficult but potentially transformative moment in its fiscal trajectory. The Tinubu administration, through the efforts of Taiwo Oyedele and the reform committee, is signaling a philosophical shift: taxing less broadly but more fairly; reducing the confusion of multiple levies; and pushing for sustainable, domestically generated revenue.
Yet good intentions must pass the test of execution. Implementation will be key. The credibility of the reforms will hinge on transparency, fairness, administrative capacity and guardrails against abuse. Only if low- and middle-income Nigerians genuinely feel relief (or at least no new pain) will trust in the system be bolstered.
If the government and its agencies get this right, the new tax regime could help unlock resources for infrastructure, education, health and economic diversification without relying excessively on oil, debt or external aid. If it misfires, public discontent could rapidly erode any political capital the reforms were meant to build.
In the end, the promise of this reform is a modern, more just and efficient Nigeria. It is a promise that must now be carefully fulfilled through competent, transparent and accountable implementation.
It’s a welcome policy direction that balances reform with compassion, but it must be followed by integrity-driven implementation.