FIRS to End Multiple Federal Taxes by 2026 as New Tax Regime Simplifies Business Compliance

The Federal Inland Revenue Service (FIRS) has announced that beginning January 1, 2026, a new tax regime will officially take effect to eliminate multiple federal taxes and simplify compliance for businesses. According to the agency, the reform aims to streamline tax administration and enhance the ease of doing business across Nigeria. The FIRS clarified that the new laws would harmonize various taxes, ensuring that businesses face fewer administrative hurdles when fulfilling their tax obligations.

Speaking at an event organized by the American Business Council (ABC) in Lagos, the Coordinating Director of Compliance and Enforcement, Mr. Matthew Gbonjubola, explained that the new tax framework would effectively put an end to overlapping taxes at the federal level. He assured members of the organized private sector (OPS) that the government is actively engaging with state and local governments to curb indiscriminate taxation at sub-national levels. “The next step is to work with states to prevent arbitrary taxes that could burden businesses,” Gbonjubola said.

Addressing recent concerns, Gbonjubola dismissed claims of a steep rise in Capital Gains Tax (CGT), explaining that CGT has been merged with the Company Income Tax (CIT) under the new law. He emphasized that there is now a single tax on profits, simplifying reporting requirements. “The law no longer distinguishes between capital and personal profits; it consolidates them, so businesses pay one unified tax,” he stated. The new framework also removes exemptions on foreign gains, aligning Nigeria’s tax system with global income tax practices.

Contrary to fears that the new law would increase compliance burdens, the FIRS said the reform significantly reduces paperwork and filing obligations. Gbonjubola highlighted that businesses will now be able to file most returns online and consolidate multiple filings into just two main submissions — annual and other statutory returns such as VAT and PAYE. He added that the 2026 commencement date will remain fixed, as the private sector actively participated in drafting the new framework.

Also speaking at the event, Mr. Chijioke Odo, Partner at Deloitte Nigeria, revealed that the reform reduces the number of federal tax-collecting agencies to just one — the Nigeria Revenue Service (NRS). He explained that this consolidation will help prevent overlapping levies and reduce costs for businesses. Odo noted that similar tax harmonization measures have already been adopted globally and will not deter foreign investment in Nigeria. “The government has given businesses more than enough time to transition, ensuring a smooth rollout in 2026,” he said.

source: arise