Nigeria’s ongoing tax reform programme appears to have hit an early credibility test, with the Minister of State for Finance, Taiwo Oyedele, admitting that errors exist in the newly enacted tax laws and disclosing that a corrective finance law is underway to address the gaps.
Speaking at the 2026 Annual Conference of the Nigerian Bar Association Section on Legal Practice, Oyedele, who also chairs the Presidential Fiscal Policy and Tax Reforms Committee, acknowledged that discrepancies emerged during the legislative and documentation processes, pointing out that the errors resulted from manual processes and multiple stages of review.
He said steps are underway to correct identified issues through a proposed finance bill and to realign the laws with their original intent.
The admission, coming months after the rollout of the sweeping reforms, signals a government effort to contain potential distortions that could undermine investor confidence quickly.
According to him, the reform agenda is anchored on transparency, fairness, and clarity of purpose, rather than arbitrary enforcement.
He stressed that beyond the technical wording of statutes, the underlying policy intent must guide interpretation and implementation, warning that inconsistency in fiscal policy could send negative signals to both local and foreign investors.
According to a Nairametrics report, Oyedele pointed to distortions in the previous tax regime, noting that individuals could face an effective tax rate of about 19 per cent, while incorporating the same business pushed the burden beyond 40 per cent, a structure he described as misaligned with global best practice.
He also cautioned against frequent policy reversals, arguing that stability remains a critical factor in sustaining investment flows.
With nearly half of Nigeria’s workforce earning below N70,000 monthly, he maintained that aggressive taxation of low-income earners would be inequitable and counterproductive.
The need for a corrective bill stems from earlier concerns raised in the National Assembly.
In December 2025, a lawmaker, Abdulsammad Dasuki, flagged discrepancies between the gazetted versions of the tax laws and those passed by the legislature, pointing to material differences from what was debated and approved.
The contested provisions form part of a broader reform package signed into law by Bola Ahmed Tinubu, with implementation commencing in January 2026.
Despite the emerging issues, the government insists that the reforms mark a significant shift towards a more balanced, growth-oriented tax system.
Key provisions include removing minimum tax requirements for loss-making businesses, a move aimed at preventing the taxation of capital rather than profit.
Essential goods and services such as food, education, and healthcare have also been exempted from Value Added Tax. At the same time, multiple tax laws have been consolidated into four principal laws, including the Nigeria Tax Act and the Nigeria Tax Administration Act.
The framework further seeks to shield low-income earners and small businesses, recognising their limited capacity to absorb additional tax burdens.
Analysts say this approach could broaden compliance over time by easing pressure on the most vulnerable segments of the economy.
The proposed bill is therefore expected not only to correct technical inconsistencies but also to reinforce the credibility of the reform process.
For policymakers, the challenge now is to ensure execution matches intent as Nigeria builds a more efficient tax system to boost revenue without stifling growth.
Festus Akanbi
