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Tinubu Signs Tax Reform Bills into Law: What It Means for Nigeria

President Bola Tinubu has signed four tax reform bills into law, aiming to transform Nigeria's fiscal landscape and boost revenue generation. Here are the key changes:

•⁠  ⁠Tax Administration
    - The Federal Inland Revenue Service (FIRS) will be renamed to Nigeria Revenue Service (NRS).
    - NRS will now collect revenues previously handled by agencies like Nigeria Customs Service, NUPRC, NPA, and NIMASA.

•⁠  ⁠Personal Income Tax
    - Workers earning ₦800,000 or less annually are exempt from income tax.
    - A 25% personal income tax will apply only to individuals earning above ₦50 million annually.

•⁠  ⁠Small Businesses
    - Small business owners are fully exempted from paying income tax.

•⁠  ⁠Company Income Tax
    - Company income tax for medium and large companies will be reduced from 30% to 25% starting in 2026.

•⁠  ⁠Value Added Tax (VAT)
    - VAT remains at 7.5%, with no rate increase.
    - Exemptions on essential goods and services, including:
        - Food items
        - Medical services
        - Pharmaceuticals
        - Educational fees
        - Electricity

•⁠  ⁠Development Levy
    - A Development Levy ranging from 2% to 4% will be allocated to support national institutions, including:
        - NELFUND
        - TETFund
        - NITDA
        - NASENI

These changes aim to ease the tax burden on low-income earners and small businesses while boosting revenue generation and attracting investments. The new tax laws will take effect on January 1, 2026.