By Clement Abayomi and Sakariyah, Ridwanullah
How will the new tax laws affect me? This is a question that Nigerians seem to be asking now that the tax reform laws are being implemented. Anxiety and fear seem to have taken over, perhaps because Nigerians have often learnt that government policies can sound sweet on paper but feel bitter in reality.
So when the Federal Government (FG) unveiled a set of tax reform laws in 2025, the people began to question the significance of these reforms. This article articulates reactions from various angles. Since the tax reform laws came into the limelight, Nigerians have responded with questions, arguments, mistrust, and expectations.
Among other things, public reaction has really been influenced by the scope of the reforms themselves. The Nigeria Tax Act, 2025, which repeals and consolidates more than a dozen federal tax laws (such as the Companies Income Tax Act (CITA), Personal Income Tax Act (PITA), Capital Gains Tax Act, VAT Act, and Stamp Duties Act), has been brought into a single statute.
According to the Nigerian Economic Summit Group (NESG), this consolidation is meant to reduce fragmentation, promote consistency, and modernise Nigeria’s tax system for a digital and globally integrated economy.
Although many Nigerians think that having too many taxes was a problem, reactions have been split between those who see progress and order and those who fear that these reforms now mean government will collect more from them.
In a way, low-income earners and salary workers have reacted positively to the reliefs promised under the law. The introduction of a progressive personal income tax regime, ranging from 0% to 25%, and the full exemption of individuals earning N800,000 or less annually have been among the most applauded provisions. Speaking at the State House, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, stated clearly:
“These reforms are not about raising more taxes. I think people get me wrong. These tax laws, they’re new laws, are pro-poor in particular. More than one third of workers in both the private and public sectors will now be exempted completely from PAYE. They will not have to pay personal income tax. What this means is that there will be more money in the hands of the ordinary Nigerian to take care of their daily needs.”
He further explained:
“This was not just an incremental reform. It’s a transformation and it’s a reset to ensure that our most vulnerable citizens don’t carry the burden of tax that they’ve been carrying, to ensure that small businesses get relief.”
In fact, small business owners and SME advocates have described the reforms as long-awaited breathing space. Under the new law, companies with a turnover of N50 million or less pay 0% companies income tax. Also, exemptions extend to businesses with up to N100 million turnover, including relief from VAT and withholding tax obligations.
Dr Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, welcomed these changes during an interview on News Central TV.
“For most small and medium enterprises in Nigeria, I think the new tax law is a new development because it offers quite a number of exemptions and incentives, exemptions from the payment of VAT, from the payment of company income tax for those within the threshold of N100 million turnover and below. I think that for me is a good development,” he said.
He added: “There’s the benefit of collapsing all manner of taxes into very few taxes because before now, we have taxes that number up to 30, different kinds of taxes. So there’s been a lot of harmonisation of these taxes.”
Significantly, tax professionals and economists have focused on obligation, redistribution, and the expansion of the tax net. On Channels TV, Wale Ajayi, Partner and Head of Tax at KPMG West Africa, pointed to responsibility rather than the sentiments flying around.
“The principle of taxation is always to tax the people that earn the higher income so that government can provide the resources. I think the problem in Nigeria today is that people assume that because they provide the healthcare, they provide the power, they provide water, they shouldn’t be paying taxes,” he maintained.
He further stated: “Tax is obligatory on the part of citizens. Once you earn revenue or profits, you must pay tax. Government needs money to provide infrastructure, but if you and I do not pay taxes, where would the money come from?”
Similarly, economist Dr Vincent Nwani, speaking on TVC, observed:
“If you ask me, that law just tried to bring in more people, more Nigerians, into the tax net. We’ve been hearing for a long time that the people that pay tax are very few, both corporates and individuals. So, for me, what this new tax law has done is to attempt to bring in more taxpayers into the tax net.”
In addition to that, Dr Nwani maintained that the tax law reform is an attempt to ensure that the poor are protected.
“The second one is to see how they can use the tax principles to redistribute income, to protect the masses or the poor in the society,” he said.
Moving forward, it can be observed that digital taxation and expanded surveillance provisions have generated both acceptance and anxiety. The application of capital gains tax to digital and virtual assets, VAT obligations for non-resident suppliers, and mandatory reporting by Virtual Asset Service Providers (VASPs) have made many Nigerians uneasy. Although policy experts believe that these measures align Nigeria with global practices, citizens are still adjusting to the idea that crypto transactions, online services, and large bank inflows will now be closely monitored under the law, with banks required to report transactions exceeding ₦25 million for individuals and ₦100 million for companies.
In all of these, it is impossible not to notice public distrust. This has remained the strongest emotional reaction across social and online platforms. An online contributor on Reddit, identified as “grossindel”, captured this frustration succinctly.
“The problem is accountability. A lot of Nigerians are unemployed so they don’t realise that formal workers already pay personal income taxes. We’re also paying VAT, stamp duties, motor park and market levies. What have they done with these taxes already paid? You’re not formally employed, you provide your own basic amenities. Then at the end of the year they want 20% of that money.”
Of course, this view reflects a belief that taxation without visible public benefit feels like punishment rather than civic duty.
In fact, some persons tend to see the reforms as a trigger for political consciousness rather than just revenue collection. Another Reddit contributor, “kayandrae”, took a more confrontational stance.
“Personally, I’m happy that these tax reforms are there. Maybe when people start paying for bad governance they will be motivated to fight. Because Nigerians will accept rubbish until our personal funds are involved.”
In his reaction to the tax law reforms, award-winning poet and writer Saheed Sunday maintained that the new development is progressive, although he noted that the government is deficient in managing funds.
“I haven’t really given it much thought. However, I think it is progressive. It is a way to actually ensure that the rich people give back to the same society that made them rather than mooching off it like leeches. The only issue is with the government itself, and that’s what scares everybody. The fact that the government has never actually been accountable to anything. So, it might not make any difference that this reform is progressive since the government is regressive with funds management,” he said.
However, the Federal Government has responded to Nigerians by calling for trust, patience, and cooperation. In a press release issued from the Presidential Villa on December 30, 2025, President Bola Ahmed Tinubu said:
“These reforms are a once-in-a-generation opportunity to build a fair, competitive, and robust fiscal foundation for our country. The tax laws are not designed to raise taxes, but rather to support a structural reset, drive harmonisation, and protect dignity while strengthening the social contract.”
Addressing controversies, Tinubu added:
“Our administration is aware of the public discourse surrounding alleged changes to some provisions of the recently enacted tax laws. No substantial issue has been established that warrants a disruption of the reform process.”
He concluded by assuring Nigerians that “absolute trust is built over time through making the right decisions, not through premature, reactive measures,” and pledged that the government would continue to act “in the overriding public interest to ensure a tax system that supports prosperity and shared responsibility.”
Obviously, the discussion surrounding the tax reform laws is less about the tax itself and more about trust. If Nigerians cannot see fairness, discipline, and real value in return, compliance might be difficult. So, until the outcomes of these reforms begin to show in public services and bring about economic stability, public reaction will keep swinging between acceptance and doubt.
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