The Federal Inland Revenue Service (FIRS) has assured the business community that issues of multiple taxation at the federal level will be effectively resolved once the new tax laws come into effect on January 1, 2026.
The agency also disclosed that the federal government is in talks with state and local governments to develop mechanisms that would prevent indiscriminate levies and harmonise taxes across all tiers of government.
The clarification follows concerns from members of the Organised Private Sector (OPS) that the upcoming tax regime could still expose businesses to multiple taxation.
Speaking during an engagement with the American Business Council (ABC) in Lagos over the weekend, Matthew Gbonjubola, Coordinating Director for Compliance and Enforcement at FIRS, explained that the new framework has already streamlined federal taxes and simplified compliance processes.
“Nigeria is a federation with three tiers of government constitutionally empowered to levy taxes. So, the new tax regime may not completely stop multiple taxation, but it has stopped it at the federal level,” Gbonjubola said.
“The next step is to work with sub-national governments to create instruments that will constrain them from imposing taxes indiscriminately, ensuring businesses are not overburdened.”
Capital Gains Tax Now Merged with Company Income Tax
Addressing misconceptions about a supposed increase in Capital Gains Tax (CGT) from 10 to 30 percent, Gbonjubola clarified that the CGT has been merged with Company Income Tax (CIT) to form a single, unified tax on profits.
“There is nothing like Capital Gains Tax anymore because all business gains have been harmonised with Company Income Tax,” he explained. “The law now treats all gains whether business or personal as one, so companies will only pay a single tax instead of separate ones.”
He added that the removal of exemptions on foreign income aligns Nigeria with global best practices on income taxation.
“Nigeria needs to optimise its revenue potential. It makes little sense to exempt taxable foreign income that can be used to support national development,” he said.
Simplified Filing and Reduced Compliance Burden
Contrary to fears of increased administrative pressure, Gbonjubola said the new tax regime will make compliance easier for businesses.
“The opposite is true. The new law significantly reduces the filing burden. Previously, businesses filed different taxes at various times, but now most returns such as PAYE, VAT, and withholding tax can be consolidated and filed online,” he noted.
He confirmed that the January 1, 2026 commencement date is fixed and will not be postponed, as the private sector had ample input during the law’s formulation.
Single Federal Collection Body Introduced
Also speaking at the event, Partner for Tax and Regulatory Services at Deloitte, Chijioke Odo, said the new tax laws have reduced the number of federal tax-collecting agencies to one, the Nigeria Revenue Service (NRS).
“Only the NRS will assess and collect taxes at the federal level, which will drastically reduce the problem of multiple taxation,” Odo said.
He explained that the reform also consolidates several federal development levies into a single 4.0 percent tax, further streamlining the payment process.
Odo added that the removal of foreign income exemptions is in line with global tax reforms and will not deter foreign investors, as such measures are already standard practice in many economies.
“Nigeria is one of the last countries to implement these global tax rules,” he said, adding that the government had already provided more than the required 90-day transition period stipulated under the National Tax Policy before enforcement.
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