Chairman of the National Tax Policy Implementation Committee (NTPIC), Mr. Joseph Tegbe, has said the Nigerian Tax Acts 2025 are fundamentally designed to rebuild the country’s weak fiscal architecture and lay the foundation for sustainable economic growth, rather than serve as short-term revenue measures.
In a policy commentary, Tegbe noted that public debate around the reforms has been largely misdirected, with critics focusing narrowly on tax rates, revenue targets and distributional impacts, while overlooking the broader objective of fixing Nigeria’s long-standing structural fiscal deficiencies.
According to him, Nigeria’s core fiscal challenge has never been a lack of wealth, but the absence of a coherent and functional system capable of supporting planning, service delivery, fair enforcement and long-term growth. He said decades of overdependence on volatile oil revenues, weak administration and a fragmented tax framework had produced a state that was resource-rich but institutionally fragile.
Tegbe explained that the former system left large segments of the economy, particularly the informal sector, outside the tax net due to institutional failure rather than deliberate policy. This, he said, resulted in weak fiscal planning, chronic deficits, poor service delivery and excessive reliance on borrowing.
He commended President Bola Ahmed Tinubu, the Minister of Finance, Mr. Wale Edun, and the Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, for driving reforms aimed at restoring fiscal order and placing the economy on a sustainable growth path.
At the core of the Tax Acts, Tegbe said, is the effort to reconnect the economy to the state through a broader and more inclusive tax base, improve visibility of economic activity, modernise fiscal administration and establish a predictable, rules-based system that reduces discretion and rent-seeking.
He noted that the reforms also seek to strengthen the fiscal social contract by promoting accountability, arguing that when citizens participate fairly in taxation, trust between government and the governed improves.
Drawing on global experience, Tegbe said successful economies such as South Korea, Singapore and Rwanda undertook difficult but foundational tax reforms long before achieving sustained growth and prosperity. In those countries, he explained, tax reform was used not merely to raise revenue but to build credible institutions and economic stability.
He said the Nigerian Tax Acts 2025 align with this global best practice by simplifying rules, improving administration and broadening participation in a measured manner to create a more predictable fiscal environment for businesses and households.
A key feature of the reforms, Tegbe said, is the protection of low-income earners and small businesses. Under the new regime, individuals earning up to N800,000 annually are exempt from income tax, compared with a 7 per cent tax previously paid by those earning N300,000 in 2024. The objective, he explained, is to preserve livelihoods, encourage formalisation and allow small enterprises to grow.
He also highlighted the expansion of zero-rated Value Added Tax (VAT) items to cover critical sectors such as healthcare, education and agriculture, noting that these sectors are essential to human capital development, food security and long-term economic stability.
Tegbe described the emphasis on digitalisation, including technology-driven tax administration and e-invoicing, as one of the most forward-looking aspects of the reforms. He said digital systems would improve compliance, reduce fraud, enhance transparency and provide reliable real-time data for fiscal planning.
In conclusion, Tegbe said the Tax Acts should be viewed as a long-term economic reform whose benefits would accrue over time. He stressed that success would depend on careful, transparent and consultative implementation, adding that government remained committed to engaging stakeholders to ensure the reforms are applied with what President Bola Tinubu has described as a “human face.”
