President Tinubu's New Tax Laws Offer Big Relief for Small Businesses While Reshaping Nigeria's Revenue System

 

Small Businesses and Salary Earners Rejoice as Tinubu Ushers in a New Tax Era

President Bola Tinubu has signed into law four new tax reform bills aimed at easing the burden of taxation on individuals and businesses across Nigeria. These legislative changes are part of a wider reform agenda designed to simplify the tax structure, improve compliance, and promote transparency. Although the implementation will begin in 2026, the new framework has already sparked conversation among small business owners, salary earners, freelancers, and other taxpayers.

The most impactful change for everyday entrepreneurs lies in the increase of the Company Income Tax (CIT) threshold. Previously, any business earning over ₦25 million annually was required to pay CIT. Under the new law, that threshold has now been doubled to ₦50 million. This means that thousands of small businesses, from roadside boutiques to food vendors and POS operators, are now exempt from this major tax obligation.

This move offers direct financial relief to micro and small enterprises, allowing them to reinvest earnings back into their operations rather than handing them over to the tax authorities. It is a much-welcomed step for many struggling businesses that have long been weighed down by high taxation and low profit margins.

For the average salary earner, the new laws bring hope of a more streamlined and less confusing tax system. One of the key objectives of the reform is to unify and digitalize tax processes. Taxpayers will no longer be subject to multiple overlapping taxes at different government levels. Instead, the goal is to consolidate and simplify these into a more efficient framework that is easier to navigate.

Remote workers and freelancers, whose income sources are often difficult to classify under traditional tax categories, are advised to begin preparing now. The changes on the horizon will likely mean closer monitoring of income sources and a push for better documentation and reporting. While this may feel like added pressure, the shift is intended to make the system fairer and more transparent for all.

A major institutional shake-up is also on the way. The current Federal Inland Revenue Service (FIRS) will be replaced by a new body known as the Nigeria Revenue Service (NRS). The NRS is expected to be more autonomous and efficient, with expanded responsibilities including the collection of non-tax revenues. This rebranding is aimed at not just a name change but a complete overhaul in the way revenue is managed and enforced in the country.

Additionally, a Joint Revenue Board is being introduced to ensure that federal and state tax bodies work together, rather than overlap or duplicate efforts. This coordination should reduce the stress of dealing with multiple agencies and conflicting demands, especially for businesses operating in more than one state.

Another innovative feature of the new laws is the establishment of a Tax Appeal Tribunal and a Tax Ombudsman. These bodies are designed to offer redress for taxpayers who feel wronged or unfairly treated. In previous years, many Nigerians have complained about the lack of an effective platform to challenge tax-related decisions. The new mechanisms promise to change that narrative by offering an accessible, transparent path for resolving disputes.

Though the legislation has been signed into law, its provisions will not be enforced immediately. The grace period up to 2026 gives individuals, businesses, and government agencies the time needed to adapt to the new structure. Experts say this phased approach will make the transition smoother and allow for proper sensitization and system upgrades.

These tax reforms are part of a broader push by the Tinubu administration to improve the ease of doing business in Nigeria. By reducing tax complexities, offering exemptions for small players, and promoting a digital-first approach, the government hopes to increase voluntary compliance and expand the country’s tax base without increasing the tax rate.

Many stakeholders believe these changes signal a shift in government thinking. Rather than relying on force or intimidation to collect taxes, the focus is now on partnership, efficiency, and fairness. While execution remains a significant hurdle, the blueprint laid out by these bills represents a positive direction for Nigeria's economy.

For now, the advice is clear: small business owners can breathe easier, salary earners can look forward to fewer deductions, and remote workers must start preparing for a more structured tax environment. Whether this tax revolution will live up to its promise depends heavily on how well the government follows through on implementation.

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