FG to review tax laws

The Federal Government of Nigeria has launched a six-week review of the recently enacted tax laws in an effort to identify any gaps in implementation, address consequences that have emerged since their introduction, and consider concerns raised by the private sector and other stakeholders. The review will scrutinize various aspects, such as Value Added Tax thresholds, withholding tax, capital gains treatment, and multiple taxation.

President Bola Ahmed Tinubu signed four new tax bills into law last year, deeming them crucial for his administration's reforms and the nation's prosperity. These bills include the Nigeria Tax Bill (Ease of Doing Business), the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.

Upon commencement of the implementation, the private sector raised concerns over certain provisions, particularly those related to Companies Income Tax and withholding tax. In June, a coalition of prominent private sector bodies, led by the Manufacturers Association of Nigeria, the Nigerian Association of Small and Medium Enterprises, and others, penned an open letter to President Tinubu.

They expressed their unwavering support for the tax reform agenda but argued that the implementation approach adopted by the National Revenue Service (NRS) had undermined the spirit and intent of the reforms. The groups emphasized their willingness to comply with the law while seeking a clear, lawful, and functional framework for filing accurate returns and paying existing taxes.

A crucial point of contention is the treatment of taxes related to accounting periods that ended before January 1, 2026. The private sector contends that the General Transition Guidelines issued by the Minister of Finance stipulate that tax obligations arising from these periods should continue to be governed by the repealed tax laws, even if filing and payment deadlines fall in 2026.

However, the NRS interpreted these guidelines differently, directing companies to file their Companies Income Tax returns for the 2026 Year of Assessment under the new NTA and NTAA framework. This led to a dispute, with the NRS claiming that it had no statutory authority to process such returns under the repealed tax legislation.

The controversy intensified when the NRS Emerging Taxpayers Office in Abuja issued a notice directing companies to comply with the new tax laws for their 2026 tax filings. The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, inaugurated a committee to review the implementation of the new tax laws and acknowledged that the government is shifting from fundamental tax reforms to continuous improvement.