FG Confirms January 2026 Start for New Tax Laws

The Federal Government has reaffirmed that Nigeria’s new tax reform framework will take effect as scheduled on January 1, 2026, assuring citizens and businesses that the changes are designed to ease tax burdens, promote economic growth and improve compliance rather than generate instant revenue.

Speaking after a meeting with President Bola Ahmed Tinubu, a senior government official said the administration briefed the President on the progress of implementation of the four tax reform laws recently enacted. According to the official, two of the laws the Nigerian Revenue Service Establishment Act and the Joint Revenue Service Establishment Act have already come into force, having commenced on June 26, 2025.

The remaining two laws, the Nigerian Tax Act and the Nigerian Tax Administration Act, are expected to commence on January 1, 2026, in line with the government’s implementation timeline.

The official also welcomed the outcome of the House of Representatives’ committee review into allegations of alterations to the tax bills, noting that the Federal Government remains committed to working with the National Assembly if further actions become necessary. He stressed that the reform agenda remains intact and on course.

“These reforms are designed to provide relief to the Nigerian people,” the official said, adding that the bottom 98 per cent of Nigerian workers would either pay no personal income tax or see their tax liabilities reduced under the new regime.

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He further disclosed that about 97 per cent of small businesses would be exempted from corporate income tax, value-added tax (VAT) and withholding tax, while large businesses would also benefit from reduced tax rates.

According to him, the overarching objective of the reforms is to promote inclusive economic growth and shared prosperity by easing the tax burden on low-income earners and small enterprises, while creating a more efficient and equitable tax system.

Addressing concerns about preparedness and safeguards against errors in implementation, the official explained that government preparations began as early as October 2024 when the bills were first presented to the National Assembly. He noted that the bills spent about nine months in the legislature before being passed in June 2025, providing ample time for stakeholder engagement and technical reviews.

Since the laws were signed, he said, the government has spent the past six months on capacity building, system upgrades and public sensitisation, describing tax reform as an ongoing process that improves over time.

“One of the reasons why two of the tax laws took effect about six months ago is to allow the institutions involved to get ready,” he explained, citing the gradual establishment of new offices and systems required for effective implementation.

On revenue expectations, the official clarified that the reforms are not aimed at immediate revenue generation. Instead, he said government expects revenue growth to come organically as the economy expands, the tax base widens and compliance improves.

He added that the reforms would eliminate wasteful and distortionary tax incentives, strengthen tax culture and ensure fairness by bringing previously untaxed segments of the economy into the tax net without burdening low-income earners.

The government expressed optimism about the progress made so far, saying it is confident of a smooth rollout of the new tax regime from January 2026.