TINUBU SIGNS LANDMARK TAX REFORM BILL INTO LAW, UNVEILS SWEEPING CHANGES TO BOOST ECONOMY
By Exponent News, Abuja – June 27, 2025
President Bola Ahmed Tinubu has signed into law a landmark Tax Reform Bill that introduces sweeping changes aimed at simplifying Nigeria’s tax system, easing burdens on low-income earners and small businesses, and enhancing revenue collection for national development.
The newly enacted law, widely praised by analysts and stakeholders, marks a significant overhaul of Nigeria’s fiscal policy framework and is expected to shape the economic landscape in years to come.
Highlights of the Tax Reform Law include:
- FIRS Renamed: The Federal Inland Revenue Service (FIRS) has been rebranded as the Nigeria Revenue Service (NRS).
- Unified Revenue Collection: The NRS will now take charge of revenue collection duties previously handled by agencies such as the Nigeria Customs Service, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Ports Authority (NPA), and Nigerian Maritime Administration and Safety Agency (NIMASA), to streamline and centralize tax collection.
- Tax Relief for Low-Income Earners: Individuals earning ₦800,000 or less per year will now enjoy full exemption from personal income tax.
- High-Income Taxation: A 25% personal income tax will now apply exclusively to Nigerians earning over ₦50 million annually.
- Support for Small Businesses: In a bold move to stimulate entrepreneurship and economic inclusion, small business owners are now exempted from paying income tax entirely.
- Corporate Tax Reduction: Beginning in 2026, corporate income tax for medium and large companies will drop from 30% to 25%, a shift expected to boost investment and job creation.
- VAT Relief on Essentials: To cushion the effect of inflation and ease the cost of living, essential goods and services such as food, electricity, school fees, medical services, and pharmaceuticals have been exempted from Value Added Tax (VAT).
- No Tax Rate Increase: Contrary to speculation, the law does not increase VAT (which remains at 7.5%) or corporate tax (still at 30%), maintaining the current rates for general taxpayers.
- New Development Levy Introduced: A 2% to 4% Development Levy has been introduced to support the operations of key national institutions including NELFUND, TETFund, NITDA, and NASENI, reinforcing government efforts in education, technology, and industrial advancement.
The Tinubu administration hailed the reform as a bold step towards a more equitable and business-friendly tax regime that balances economic growth with social responsibility.
“Nigerians can now expect a simpler, fairer tax system that promotes inclusivity and supports national development,” a statement from the Presidency read.
The reform aligns with President Tinubu’s Renewed Hope Agenda and continues the government’s push for sustainable economic reforms.
