The Chairman of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, has welcomed the recently signed tax reform bills by President Bola Ahmed Tinubu, describing them as a step towards a more equitable, efficient, and transparent tax system. Yusuf emphasised that while the reforms are commendable, their implementation must remain flexible to address any imperfections as they emerge.
The four major bills—the Nigerian Tax Bill (Ease of Doing Business), the Nigerian Tax Administration Bill, the Nigerian Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill—seek to harmonise the country’s fragmented tax laws and streamline collection processes.
In an interview with Voice of Nigeria, Dr Yusuf spoke on the impact of the reforms:
“It will make the tax system more equitable, more efficient, and more transparent.
One of the biggest benefits is the reduction in the multiplicity of taxes, which has long been a challenge for Nigerian businesses,” he said.
He also noted that several redundant or burdensome taxes have been removed, while new concessions have been introduced to incentivise production and attract investment.
Relief for Small Businesses and Average Nigerians
The reforms provide significant tax relief for small businesses and low-income earners. Under the new laws, businesses with an annual turnover of ₦100 million or less will be exempted from corporate income tax and value-added tax (VAT).
In addition, the personal income tax threshold has been expanded, meaning that low-salaried individuals will be exempt from PAYE tax obligations.
“These changes will ease the burden on small enterprises and everyday Nigerians, ensuring the tax system supports growth at the grassroots level,” Yusuf explained.
Overburdening Citizens
A key objective of the reform is to improve Nigeria’s tax-to-GDP ratio without placing additional strain on already struggling citizens. According to Yusuf, the focus is on increasing tax efficiency through technology and plugging revenue leakages rather than hiking rates.
“There are many who should be paying taxes but aren’t. The deployment of technology will help address this, ensuring more people and businesses are brought into the tax net,” he said.
Transition Timeline and Preparedness
The new laws are expected to take effect from 20 January 2026, allowing a six-month transition period. Yusuf believes this window is sufficient for government agencies, businesses, and citizens to prepare.
“There are institutions already in place. What is needed now is tweaking structures, training officers, and creating awareness. Six months is enough if well utilized,” he asserted.
Avoiding Bureaucratic Pitfalls
Addressing concerns about over-centralisation, particularly criticisms previously levelled at the Federal Inland Revenue Service (FIRS), Yusuf emphasised the importance of designing a decentralised and inclusive framework for the newly established Nigerian Revenue Service (NRS).
“This transition period should be used to design an operational model that avoids bottlenecks and unnecessary bureaucracy. It must be participatory to ensure smooth implementation,” he advised.
He reiterated that no legislation is perfect and called for a continuous feedback mechanism to fine-tune the system based on real-world outcomes.