Nigeria’s new Tax Acts are designed to strengthen trust between government and citizens by simplifying the tax system, reducing burdens on low-income earners, and aligning with global best practices, according to Finance Minister Taiwo Oyedele.
Oyedele said the reforms are not merely about raising revenue but about creating fairness, transparency, and accountability in taxation. He emphasized that citizens are more likely to comply when they believe taxes are equitable and used for public good.
The new framework reduces the number of taxes to streamline compliance, exempts minimum wage earners from personal income tax, and lowers Company Income Tax from 30% to 25%. Nigeria also aims to raise its tax-to-GDP ratio to 18%, up from 10% currently and just 6% three years ago.
Nigeria has historically struggled with low tax compliance, multiple overlapping levies, and heavy reliance on oil revenues. The country’s tax-to-GDP ratio is among the lowest globally, far below the African average of about 16%.
The government has launched fiscal reforms to diversify revenue sources, reduce dependence on borrowing, and support infrastructure, education, healthcare, and social protection. Tax reforms are also intended to improve Nigeria’s global competitiveness, attract investment, and encourage businesses to operate in a more predictable environment. Public awareness campaigns are being rolled out to educate citizens, especially younger Nigerians, on the benefits of compliance and the role of taxation in national development.
Analysts say the reforms could help Nigeria transition from a resource-dependent economy to one driven by sustainable fiscal policies. By focusing on fairness and trust, the government hopes to change public perception of taxation from a burden to a civic responsibility.
