The Independent Media and Policy Initiative (IMPI) has hailed President Bola Tinubu’s new tax reforms as a landmark in Nigeria’s economic history. In a public statement, the think tank described the Nigeria Tax Act 2025 and three other newly signed laws as the most comprehensive fiscal overhaul in a generation. The four laws — Nigeria Tax (Fair Taxation) Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and Joint Revenue Board (Establishment) Act — are projected to reshape the country’s tax architecture and fuel long-term growth.
IMPI emphasized that the reforms, alongside the removal of fuel subsidies and forex window harmonisation, point to a coherent strategy aimed at sustainable and inclusive growth. President Tinubu stated the new laws would simplify Nigeria’s tax regime and deliver targeted relief to low-income earners and small businesses. IMPI noted the alignment with global tax standards and the avoidance of excessive borrowing, stressing that the reforms will restore public trust in taxation and boost compliance through fairness.
One key innovation is the introduction of the Minimum Effective Tax Rate (ETR), which will apply from January 2026. Large local and multinational firms will be required to pay a minimum tax of 15% on their net income. IMPI said this addresses the issue of double taxation and incentivizes global investment. Other incentives include the Economic Development Incentive (EDI), offering a 5% annual tax credit for qualifying capital expenditures over five years.
The policy shift also favours Micro, Small, and Medium Enterprises (MSMEs) by raising the tax exemption threshold for businesses with turnovers up to ₦100 million — a jump from the ₦25 million limit under previous legislation. Individuals earning ₦800,000 or less annually will be exempt from income tax, a move praised by IMPI as a socially progressive milestone. These changes are expected to increase disposable income, stimulate consumption, and promote formalisation in the SME sector.
Although Nigeria has witnessed declining foreign direct investment (FDI) — $0.25 billion in Q1 2025 compared to $0.31 billion in Q4 2024 — IMPI believes the clear and investor-friendly tax regime can reverse the trend. However, the group emphasized that the success of these reforms hinges on effective implementation. Concluding on an optimistic note, IMPI stated that the groundwork has been laid for the “crystallisation of Nigeria’s economic renaissance.”
Source: The sun