As the January 1, 2026, effective date for the implementation of a new tax regime in Nigeria, some leaders of the organised private sector (OPS) have expressed concerns that the new tax laws might not be able to end multiple taxations and could have significant implications for Nigeria’s investment climate.
These tax laws are the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Act, and the Joint Revenue Board Act.
Their concerns also included fears that the new tax regime could place an undue burden on businesses.
They also expressed concern about sharp increase in corporate Capital Gains Tax (CGT) rate and the burden of compliance on businesses.
These concerns were expressed on Wednesday, in Lagos, by the President of Chartered Institute of Directors Nigeria (CIoD), Mr. Adetunji A. Oyebanji, and the President of Nigeria British Chamber of Commerce (NBCC) Mr. Abimbola Olashore, at the “LCCI Organised Private Sector Stakeholders’ Forum on Emerging Tax Matters” with the theme: “A New Tax Regime, Fostering Collaboration for Economic Growth.”
Oyebanji, said the four landmark tax reform bills signed into law in June 2025 are ambitious in their scope and laudable in their intent by aiming to simplify tax administration, enhance compliance, and broaden the tax base.
He, however, said the CIoD Nigeria has a duty to articulate the concerns of its members, “and our message today is one of partnership, not opposition.”
He added, “While the new laws rightly aim to increase revenue, some provisions, if not carefully managed, could place an undue burden on businesses already grappling with high operational costs, a volatile currency, and macroeconomic headwinds.
“First, while we applaud the consolidation of some levies into a new development levy, there is a lingering uncertainty that the new regime may not fully eliminate the problem of multiple taxation at the state and local government levels.
“Secondly, the sharp increase in the corporate CGT rate from 10 per cent to 30 per cent is a significant concern.
“At a time when companies are struggling with high cost and fragile margins, such a steep hike risks slowing growth and reducing the tax base over the medium term.
“Thirdly, we must shine a spotlight on the burden of compliance. While the new laws rightly aim for a more digital and streamlined tax administration, many businesses particularly SMEs may struggle to cope with the new reporting requirements and the cost of digital infrastructure.
“Without adequate support, this could drive more firms into informality, undermining the very objective of broadening the tax net.
“Fourthly, many are concerned about the transparency and accountability in the utilisation of tax revenues.”
Speaking in the vein, Olashore said members of NBCC are clear that what they want to see going forward is a tax regime that widens the net to bring more participants into the system, but not one that would pile additional burdens on already compliant businesses.
He said: “We recently reached out to our members to hear directly from them on their experience with the current tax reforms.
“Their feedback provides us with an authentic snapshot of the realities faced by the private sector.
“First is clarity and communication, as many businesses, especially SMEs, find the provisions of the reforms rather vague.
“For example, the turnover threshold for small companies for income tax purposes under the Nigeria Tax Act is N50 million. However, a common misconception is that the threshold is N100 million but the N100,000,000 threshold for ‘small businesses’ as defined by the Nigeria Tax Administration Act only applies for VAT purposes.
“Second is the impact on investment and cross-border transactions. As a bilateral chamber, this is of particular concern to us.
“Investors, whether Nigerians or foreigners, seek predictability but the treatment of chargeable gains on indirect transfer of shares have generated mixed interpretations.
“Similarly, the removal of the foreign loan interest exemption is expected to have significant implications for Nigeria’s investment climate” by increasing the cost of borrowing and eliminating the incentives that once favoured longer-term financing.”
Olashore pointed out that multiple taxation has remained a persistent pain point. “For instance, in the logistics sector, businesses often report being stopped multiple times by different revenue agencies on the same delivery route, each demanding levies.”
He also identified transition period challenges and compliance costs among the concerns expressed by members of the NBCC.
“Although the government had promised a six-month lead time, the gazetted versions of the laws were only released in September, with implementation still set for January 1, 2026. This is not enough time for small businesses to align their accounting systems or understand their obligations,” he said, adding that “many persons do not yet fully understand the new laws, what will change, or how they will be affected
In his opening speech, the President of the LCCI, Mr. Gabriel Idahosa, said Nigeria stands at an inflection point where resilient private enterprise, smart policy, and adequate revenue mobilisation must converge to sustain growth.
Idahosa said: “The 2025 Act, with its sweeping provisions on digital taxation, unified filing systems, and incentives for green and export-oriented industries, offers a bold opportunity.
“Yet bold legislation alone is not enough; effective and collaborative implementation will determine whether we unlock the inclusive prosperity we all seek.”
According to him, “we must interrogate how the new Act will operate, ensuring its laudable objectives translate into predictable, transparent, and business-friendly outcomes.
“Key questions demand our attention: How can the newly introduced Investment and Export Incentive Schemes under the Act be administered transparently to spur industrialisation rather than create avenues for abuse?
“And how do we institutionalise efficient dispute-resolution processes via the Tax Appeal Tribunal, so that tax disagreements do not cripple enterprise?”
In his keynote speech, the Executive Chairman of the Lagos Internal Revenue Service (LIRS), Dr. Ayodele Subair, said the recent signing of comprehensive tax reform laws by President Bola Ahmed Tinubu, marked a watershed moment in Nigeria’s fiscal policy evolution that addressed longstanding structural challenges in Nigeria’s tax system, and present both opportunities and implementation considerations for both the tax authority and businesses operating in Lagos State.
Subair clarified that all individuals liable for tax must register with tax authorities and obtain a Tax ID and must file annual tax returns, “including all sources of income, not just salary such as side business, rentals, investment, digital income.”
He also stated that the Personal Income Tax (PIT) for individuals earning N800,000 or less was zero; but the rate increases by 15 percent, 18 percent, 21 percent, 23 percent and 25 per cent for those whose incomes are above N50 million.
“The effective tax rate for the lower band is set at 11 per cent while the rate for higher income earners is set at 25 per cent.
“Income from virtual or digital assets, non-traditional sources (e.g. prizes, honoraria, grants) are now taxable.
“Fees and commissions earned abroad by resident individuals are also taxable,” he added.
He also clarified that all companies must obtain/register and maintain a valid Tax ID, which must be included in all correspondence to the relevant tax authorities.
This, according to him, includes tax ID of all employees on all monthly and annual returns filed as well as tax ID of its contractors and suppliers on all withholding tax (WHT) schedules and documents.
Dike Onwuamaeze
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