The tax reform bills proposed by President Bola Ahmed Tinubu have ignited a fierce debate across Nigeria. While critics and supporters clash, many remain unaware of the sweeping changes these reforms aim to introduce. From slashing taxes for small businesses to easing the financial burden on low-income earners, here’s everything you need to know – explained in plain terms.
What’s the Fuss About?
President Tinubu recently sent four tax-related bills to the National Assembly. These are:
Nigeria Tax Bill
Nigeria Tax Administration Bill
Nigeria Revenue Service Establishment Bill
Joint Revenue Board Establishment Bill.
While these bills seek to modernise Nigeria’s outdated tax laws, they’ve also stirred controversy, with governors and regional leaders sparring over revenue sharing and fairness.
Here’s the good news: the Tinubu Tax Reforms are designed to benefit everyday Nigerians, especially the poor and small businesses.
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Here are 23 things you probably didn’t know about Tinubu’s tax reforms:
1. Income Tax Relief for Low Earners
If you earn N800,000 or less annually, you’ll no longer pay income tax – saving N84,000 yearly.
2. Higher Threshold for Maximum Tax Rates
Only those earning above N50 million will pay a 25 percent income tax rate, unlike the current threshold of N3.2 million.
3. Small Business Tax Exemptions
Businesses with turnovers below N50 million won’t pay income tax – a jump from the current N25 million threshold.
4. Reduction in Corporate Tax Rates
Medium and large companies will see corporate taxes drop from 30% to 25% by 2026.
5. Elimination of ‘Minimum Tax’
Companies that fail to declare profits will no longer face a mandatory 1% gross earnings tax.
6. Lower Burden on Big Firms
A new 2% development levy replaces the current 3.75% in additional taxes – directly funding student loans from 2030.
7. Changes to VAT Sharing Formula
States will now receive 55% of VAT revenue, up from 50%, while the federal government’s share drops from 15% to 10%.
8. Progressive VAT Increase
VAT rates will rise gradually from 7.5% today to 15% by 2030—but basic necessities like food and medicine remain exempt.
9. Affordable Food and Essentials
No VAT will be charged on food items, electricity, school fees, or medical services, ensuring prices stay low for the poor.
10. Investment Incentives in Gas
Tax breaks encourage both associated and non-associated gas projects to boost energy supply.
Revolutionising Tax Administration
The Nigeria Tax Administration Bill introduces new ways to ensure compliance and fairness.
11. Catching Tax Evaders High spenders (N25 million/month for individuals, N100 million/month for businesses) are flagged for tax audits via bank records.
12. Payment Flexibility
Taxes assessed in foreign currencies can now be paid in Naira at official exchange rates.
13. Streamlined Collections
The Nigeria Revenue Service (NRS) will take over tax collection from agencies like Customs, enabling regulatory bodies to focus on oversight.
14. Tax Refund Guarantees
Funds for verified tax refunds will be deducted from collections to ensure prompt payments. Empowering Local Governments and Simplifying Taxes.
The Joint Revenue Board Establishment Bill is equally transformative:
15. Local Revenue Committees
LGAs will manage taxes, fines, and rates within their jurisdictions to boost efficiency.
16. Harmonised Offences and Penalties
Tax laws will now have uniform penalties to improve compliance nationwide.
17. Dispute Resolution
A Tax Appeal Tribunal will settle disputes, including disagreements over residency for tax purposes.
18. Taxpayer Advocacy
A Tax Ombudsman Office will help citizens seek justice if treated unfairly by tax authorities.
Why This Matters
Proponents of Tinubu’s reforms argue they are pro-poor, pro-growth, and pro-efficiency. With exemptions for low-income earners and small businesses, alongside incentives for local economic activities, these bills aim to reduce Nigeria’s reliance on oil revenue while fostering a fairer, more inclusive tax system.
What’s next?
The bills have passed the Second Reading in the Senate and now await public hearings. While the debate rages on, analysts agree: if implemented correctly, these reforms could transform Nigeria’s tax ecosystem and uplift millions of Nigerians.
END.
What’s Nigeria protecting with twisted unemployment rate?, by Ola Emmanuel
Fabricated figures? Deliberate information hoarding? Controversial and delusional? Misleading and unreliable? Being economical with truth? Whatever the reactions from various sections of the stakeholders of the Nigeria economy, to whose benefits is a skewed unemployment rate? The latest unemployment rate from the National Bureau of Statistics puts the unemployment rate in Nigeria at 4.3 percent for the second quarter of 2024, thereby presenting Nigeria as doing better or rubbing shoulders with some sought-after economies when it comes to employment generation and productive engagement.
For proper perspective, one should ask: what is the National Bureau of Statistics really measuring when we talk about unemployment rate?
NBS is informing those who need to know that in a given period in the economy, the labour force, which is a combination of individuals who are employed and those who are unemployed (known as the working age population) are gainfully employed. That is, how many of a country’s working-age population is in gainful employment. To give this figure, the NBS, in its wisdom, believes that whoever has been engaged or is working, either with or without earning a consideration, for at least one hour in seven days (1/168) is gainfully employed. This new methodology is a sheer departure from what was being used pre-February 2024 whereby what was measured was that to be considered employed or gainfully engaged, a person must have worked for a minimum of 20 hours within the reference period of seven days (20/168).
If working a few hours less than a day out of seven was earlier considered controversial, how come or how best should one react to a one hour engagement in a week, whether for a pay or it is mere volunteering? A critical mind would want to probe further: are those behind the churning out of these unreliable figures trying to hide something? If yes, what is it they are hiding?
In an attempt to unravel the employment/ unemployment rate mystery, one should attempt to bring to fore the effects of poor or negative unemployment rate on any economy, including Nigeria’s. Poor unemployment rate negatively impacts foreign direct investment drives as no serious investors would want to put funds into an economy where the people in the target country have very little or no consumer spending power. Ahhh, is this why Nigeria is spewing out a skewed unemployment rate? A deliberate plan to principally two-time foreign or domestic investors? High unemployment has many negative effects on the economy. Among these are reduced consumer spending (whereby the unemployed spend less money – effecting reduced demand for goods and services and reduced production, higher rate of layoffs, and economic stagnation), loss of potential outputs, decreased tax revenue for government, increased reliance on social welfare programmes that strain public finances, economic uncertainty, human capital loss, and social unrests which doesn’t help business atmosphere.
Considering the above, can we say the statisticians are playing politics with figures and are helping in building Nigeria’s economy by being economical with the employment situation? To attempt this question, we need to understand the consequences of unemployment on the economy, on government, on the individuals, and consequences of such long term unemployment. One of the consequences on the economy is the GDP gap; that is, the difference between the actual GDP and the potential GDP. Also the government will suffer uncertainty and instability in their dealings – which will render their efforts at governing very ineffective and inefficient.
To the politicians who will always ask to be voted for, uncertainty and instability will cause disaffection with the voters and lead to outright rejection. The individuals are the ultimate losers since their living standards will be directly impacted by high unemployment rate and poor economy. Long term high unemployment rate will cause instability in the economy that will decrease consumption; leading to further unemployment and harder times in the working class finding jobs. It is better to imagine the repercussion of this vicious circle on a people.
Considering the rate at which businesses are closing down in Nigeria and the poor state of entrepreneurship due to poor economy; and in view of the number of fresh graduates being churched out by the tertiary institutions, to report that employment situation is improving in Nigeria is quite delusional. It is reported that every year, Nigerian universities and polytechnics are producing about 600,000 graduates. Loading these fresh graduates into the labour market every year will definitely aggravate Nigeria’s unemployment situation.
Therefore and very clearly, one cannot say that NBS is really helping Nigeria by using wrong measurement tools that throw up wrong results which under-declare the country’s unemployment rate. Rather than covering up the employment situation, Nigeria needs to face its reality and marshal all and sundry to rally towards helping revive the economy. Politicians in government need to understand that they have work to do – and they should get hold of the tools to effectively do the work to make Nigeria an economy that is sought after by the world. Governance is not about starched babanrigas.
. Ola Emmanuel is a business planning consultant and founder of Leacent Incorporated Trustee, a network of entrepreneurs and group of cooperatives. He works with a team of international consultants to conceptualise and plan agribusiness and housing projects. As a certified trainer authorised to use the International Labour Organisation’s enterprise development modules, he trains entrepreneurs and organises workshops and seminars for potential and practising entrepreneurs as well as business managers and cooperatives. He also speaks and facilitates at leadership and management workshops on invitation. His book, Business Planning Made Easy: Step by Step Guide On How To Turn Your Idea To Profitable Business’ is the latest of the books authored by him. Tel: +234(0)9068602954 (call and sms), +234(0)8023257707 (WhatsApp only).
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