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The Minister of State for Finance, Taiwo Oyedele, has assured stakeholders that the enforcement of Nigeria’s new tax laws will not be random or arbitrary, stressing that the reforms are grounded in clear policy intent, transparency, and fairness.
He gave the assurance during a fireside chat at the 2026 Annual Conference of the Nigerian Bar Association Section on Legal Practice, themed “From Policy to Practice: Making Sense of Nigeria’s New Tax Reforms.”
Policy intent to guide enforcement
Oyedele explained that beyond the provisions of the law, understanding the purpose behind tax policies is critical to proper implementation. According to him, professionals often focus on the letters of the law while overlooking the rationale that should guide interpretation.
He emphasised that the current reforms are designed to reduce discretion in tax administration, thereby ensuring that enforcement is predictable and consistent across board.
Addressing past inconsistencies
The minister pointed to structural issues in Nigeria’s previous tax regime, particularly the imbalance between personal and corporate taxation. He noted that while individuals could pay an effective tax rate of about 19 per cent, formalising a business as a company could push the burden above 40 per cent.
This, he said, discouraged businesses from formalising, contrary to global best practices where incorporation is typically incentivised.
The new framework, he added, corrects these distortions by aligning tax policy with economic growth objectives and reducing uncertainty for businesses.
Investor confidence and policy stability
Oyedele also highlighted how policy inconsistency has historically affected investor confidence. He cited past instances where sudden proposals, such as sharp increases in taxes on gas companies, created uncertainty in the investment climate.
According to him, predictable policies are essential for attracting both local and foreign investment, noting that abrupt changes send negative signals to investors.
Protection for low-income earners
On inclusivity, the minister said the reforms deliberately shield low-income earners and small businesses from excessive tax burdens. He disclosed that individuals earning around ₦1 million annually, as well as tens of millions of small businesses, have limited capacity to pay taxes.
He added that nearly half of working Nigerians earn below ₦70,000 monthly, making aggressive taxation on such income levels unjust.
Key structural changes
The reforms also introduce significant structural adjustments aimed at improving fairness and compliance. These include the removal of minimum tax requirements for loss-making businesses, which Oyedele described as a form of taxing capital rather than profit.
In addition, essential goods and services such as food, education, and healthcare have been exempted from Value Added Tax (VAT), making the system more progressive.
He further noted that multiple tax laws have now been consolidated into four major legislations, including the Nigeria Tax Act and the Nigeria Tax Administration Act, to simplify compliance and enhance coordination among tax authorities.
Fixing legislative gaps
Addressing concerns about inconsistencies in the law-making process, Oyedele acknowledged that errors occurred due to manual drafting and multiple review stages.
He disclosed that steps are already being taken to correct identified issues through a proposed finance bill, adding that a more transparent legislative process is needed where all versions of laws are publicly accessible.
Role of legal practitioners
Oyedele underscored the role of legal practitioners in shaping economic outcomes through tax advisory and compliance. He noted that decisions made by lawyers directly influence investment flows, job creation, and revenue generation.
While acknowledging improvements in revenue utilisation, he maintained that Nigeria still has significant room to improve its tax collection efficiency when compared to peers.
He concluded by urging stakeholders to prioritise effective implementation, stressing that the success of the reforms will depend not just on policy design, but on how consistently and fairly the laws are enforced.
