Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has said the new tax laws expected to come into force in January 2026 are designed to empower Nigerians and ease the financial strain on small and emerging businesses.
Oyedele made this known on Friday at a media workshop held in Lagos, where he reflected on past tax reforms, noting that they encouraged multiple taxation and disproportionately affected the informal sector, which he described as critical to national development.
He explained that the forthcoming reforms focus on supporting small enterprises by offering incentives that encourage business registration, formalisation and sustainable growth.
According to him, creating a supportive environment would allow businesses to expand gradually, from nano and micro enterprises to larger firms with the potential to operate at international levels.
Oyedele disclosed that the Company Income Tax has been reduced to 25 per cent, while businesses with an annual turnover of less than N100 million would be exempt from paying the tax altogether.
He said the changes were intended to encourage business owners to formalise their operations by offering tangible benefits rather than the disadvantages previously associated with compliance.
The committee chairman noted that taxation alone does not drive formalisation, stressing that organisation and structure are equally important. He added that when informal businesses formalise and grow, the benefits are widely felt across the economy.
Oyedele argued that broad-based growth within the informal sector has a more significant impact on the population than rapid expansion among a few large corporations.
He also said the reduction in corporate tax from 30 per cent to 25 per cent would enhance Nigeria’s attractiveness to foreign investors.
Recalling the economic difficulties experienced about two years ago, Oyedele said tax revenue fell sharply, with the tax-to-GDP ratio dropping below 10 per cent and nearly all government revenue being used to service debt.
He said the new reforms would streamline and harmonise Nigeria’s tax system by eliminating multiple taxes and reducing the number of taxing authorities, a situation he said had undermined the country’s global competitiveness.
Oyedele noted that Nigeria currently ranks among countries with the highest tax burden on businesses, adding that the reforms aim to correct this imbalance.
He further disclosed that low-income earners, who previously bore a significant share of income tax payments, would be fully exempt from personal income tax from January 2026.
According to him, individuals earning N100,000 or less would also benefit from value-added tax relief on essential goods and services.
Oyedele said Nigeria narrowly avoided economic collapse in 2023 and is now on a recovery path as a result of the reforms introduced since mid-2023.
He dismissed suggestions that the government had raised taxes or engaged in excessive borrowing, noting instead that several taxes had been cancelled, reversed or harmonised.
He added that the new tax framework also supports capital market development and provides for zero VAT on essential items such as food, education, healthcare, rent and transportation.
