Nigeria Begins Review of 2025 Tax Laws Ahead of 2027 Finance Bill

The Federal Government has begun a six-week review of Nigeria’s 2025 tax reforms, with officials looking at implementation problems, unclear provisions and unintended effects that have emerged since the new tax framework took effect in January 2026.

Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele inaugurated a Technical Subcommittee on Fiscal Policy and Tax Reforms in Abuja on Thursday, September 17, giving the committee six weeks to complete its work.

The review is expected to provide recommendations for the Finance Bill 2027.

Government says the reforms are not being reversed

The review comes less than nine months after Nigeria’s new tax framework became operational.

Four major laws came into effect from January 1, 2026: the Nigeria Tax Act 2025, Nigeria Tax Administration Act 2025, Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025.

Oyedele said the latest exercise should not be interpreted as an attempt to rewrite or abandon the reforms.

Instead, the government wants to preserve their main principles while correcting problems identified during implementation.

The minister said the experience of applying the laws in the real economy had shown areas where clarification, refinement or further reform could be required.

This distinction is important for taxpayers and businesses because the review itself does not change the tax rules currently in force.

VAT thresholds among issues under review

One of the areas identified for examination is the treatment of Value Added Tax thresholds.

Stakeholder submissions have called for clearer and simpler provisions around VAT, particularly where businesses need to determine their obligations under the new framework.

The review will consider whether existing provisions are producing the intended outcomes and whether changes are needed to make compliance easier.

The government has not announced a new VAT threshold as part of Thursday’s announcement.

Any eventual changes would have to go through the appropriate legislative or regulatory process.

Withholding tax also faces review

Withholding tax is another major issue before the subcommittee.

The government plans to review the Deduction of Tax at Source Regulations 2024 against the new tax laws and prepare revised withholding tax regulations.

Oyedele said withholding tax should function as an advance-payment and compliance mechanism rather than become an additional cost for businesses.

He also warned that excessive withholding could tie up working capital at a time when Nigerian businesses face high financing costs.

The review could therefore examine how withholding rules affect cash flow, compliance and the cost of doing business.

Capital gains treatment will be examined

The treatment of capital gains is also among the areas identified for review.

The subcommittee will consider whether the current framework is clear and workable under the new tax regime.

The government is also reviewing the Companies Income Tax (Significant Economic Presence) Order 2020, with the intention of developing an updated framework that is aligned with the new tax laws and international practices.

That issue has particular relevance to businesses operating across borders and companies providing digital services into Nigeria.

Multiple taxation remains a concern

Another issue raised during the government’s public consultation was multiple taxation.

Businesses and other stakeholders have called for better coordination among revenue authorities to reduce situations in which taxpayers face overlapping demands.

The review will consider ways to improve coordination and reduce unnecessary compliance burdens.

Stakeholders have also proposed greater use of digitalisation and data sharing so taxpayers do not repeatedly submit information that government agencies already possess.

The objective is to make the tax system easier to administer while maintaining the government’s ability to collect revenue.

Government received 134 submissions

The review follows a public call for input on the country’s fiscal and tax framework.

Oyedele said the government received 134 submissions from across Nigeria’s geopolitical zones, in addition to physical submissions.

The proposals covered more than taxation alone.

They included fiscal policy and management, public financial management, debt, transparency, capital markets and cross-border capital flows.

Other proposals included stronger taxpayer rights, faster tax refunds, safeguards for small businesses and measures intended to improve investment and competitiveness.

The subcommittee has been directed to assess the proposals based on evidence and their likely economic effects.

Small businesses are part of the review

Small businesses are among the groups that could be affected by changes to tax administration.

The government has specifically asked the committee to consider the impact of proposed changes on low-income households, workers and businesses.

Stakeholders have also proposed safeguards for smaller businesses and simpler compliance procedures.

This matters because the practical cost of complying with tax rules can extend beyond the amount of tax owed. Businesses may also incur accounting, administrative and professional costs when rules are difficult to understand or apply.

The government has said reducing unnecessary complexity should therefore be part of the review.

Taxpayer rights and refunds are also on the agenda

The consultation produced proposals for stronger taxpayer protections.

These include improved taxpayer rights and faster processing of refunds.

The issues are particularly relevant as the government attempts to increase compliance while building greater confidence in the tax administration system.

The Federal Ministry of Finance’s earlier transition guidelines said the new tax framework was intended to provide clarity, fairness and administrative certainty as Nigeria moved from the previous system to the new regime.

The latest review provides an opportunity to examine whether those objectives are being achieved in practice.

Committee includes government and private-sector representatives

The Technical Subcommittee brings together officials from several government institutions and representatives of business and professional organisations.

Members include representatives of the Federal Ministry of Justice, Nigeria Revenue Service, Joint Revenue Board, Nigeria Customs Service, Central Bank of Nigeria, Debt Management Office, Budget Office of the Federation and Nigerian Investment Promotion Commission.

SMEDAN, the Manufacturers Association of Nigeria, Nigerian Economic Summit Group, Nigerian Bar Association and professional accounting and tax bodies are also represented. Deloitte, EY, KPMG and PwC are among the accounting firms represented on the committee.

The subcommittee is chaired by the Permanent Secretary of the Federal Ministry of Finance, with Tax Advisory Committee Chairman Albert Folorunsho serving as co-chair.

Recommendations will feed into Finance Bill 2027

The committee has six weeks to complete its assignment.

Its recommendations are expected to help shape the Finance Bill 2027.

That means any proposed amendments resulting from the review would still have to move through Nigeria’s legislative process before becoming law.

For now, the tax laws that took effect on January 1, 2026 remain the operative framework.

The Federal Ministry of Finance’s June implementation guidelines already established how taxpayers, revenue authorities and tax practitioners should handle the transition from the previous laws to the new system.

What taxpayers should watch

For individuals and businesses, the immediate development is not a new tax rate or a new tax obligation.

Instead, the government is reviewing how the existing system is working.

The areas to watch include VAT thresholds, withholding tax, capital gains, multiple taxation, taxpayer rights, refunds, digital compliance and the taxation of cross-border and digital economic activity.

The eventual recommendations could lead to amendments, revised regulations or administrative changes.

Until those changes are formally approved and take effect, taxpayers should continue to comply with the current laws and official guidance.

The six-week review marks a shift from designing Nigeria’s new tax architecture to examining how that architecture performs in practice.

The outcome will provide an early indication of which parts of the 2025 reforms the government intends to clarify, adjust or strengthen as it prepares the Finance Bill 2027.