...says individuals earning less than N1m are exempted from
tax payment
Priscilla Akpanettot
Against widely held belief that the new tax reforms instituted
by the President Bola Tinubu’s administration will force the payment of tax on
all Nigerians from January 2026, the Akwa Ibom Internal Revenue Service
(AKIRS), has cleared the air and allayed fears of forceful taxation on individuals
and corporate entities.
Speaking on Friday, November 28, 2025 at the NUJ Press Centre
in Uyo, Chairman of the AKIRS, Sir Okon Okon said that the tax reforms will rather
protect low-income earners and reduce inequality for individuals earning below ₦1
million per year.
Okon who was giving a synopsis of the implication of the 4
new tax reforms with journalists said the reforms will improve fairness and
transparency in the delivery of basic social amenities as well as reduce cost of
living pressures.
It would be recalled that President Bola Ahmed Tinubu had on
June 26, 2025 signed four key tax reform bills into law, collectively known as
the Nigerian Tax Reform Acts. The reforms according to Okon Okon are aimed at
overhauling the country’s fiscal governance, tax administration, and revenue
generation; while improving a unified, technology-driven tax administration
scheme for optimized revenue generation across tiers of government.
The AKIRS boss said the tax reform provides a simpler,
unified tax system that is easier for businesses and individuals to understand
and promotes improved fairness where large companies pay minimum tax while small businesses and
low-income earners receive exemptions and reliefs.
Furthermore, he posited that the reforms would bring about stronger
digital and institutional capacity for tax collection, promote reduced
duplication and multiple taxation, birth clearer investment incentives for both
local and foreign investors and as well improve Nigeria’s ease of doing
business.
Breaking down the reforms, the South South presidential committee
member on tax reforms said that the Nigeria Tax Act, 2025 (NTA) would now
ensure a comprehensive consolidation of major federal tax laws into one unified
framework through the merging of CIT, PIT, VAT, CGT, Stamp Duties, Petroleum
Taxes, and others into a single Act. It would as well broaden the tax base to
include digital services, virtual assets, gaming, mining, petroleum operations,
prizes, and grants; introduce a 4% Development Levy on assessable profits
(replacing multiple old sectoral levies); implement a 15% minimum effective tax
rate for large companies/MNEs; introduce Controlled Foreign Company (CFC) rules
to limit profit shifting and as well updates rules on interest deductibility,
capital allowances, free-zone incentives, and export tax reliefs.
Meanwhile, the Nigeria Tax Administration Act, 2025 (NTAA)
which modernizes and harmonizes tax administration across all government levels
will now standardize processes for tax filing, assessment, audits, and appeals,
and introduce a unified digital system for taxpayers — making compliance easier
and reducing bureaucracy; enhances transparency and efficiency in tax
collection nationwide.
The Nigeria Revenue Service (Establishment) Act, 2025 (NRSA) now
will establish the Nigeria Revenue Service (NRS), replacing the former FIRS. It
centralizes federal tax collection and taxpayer registration; implements
stronger automation, data integration, and compliance tools and enhances
capacity for revenue intelligence and enforcement.
While the Joint Revenue Board (Establishment) Act, 2025
(JRBA) which replaces the Joint Tax Board (JTB) creates a coordinated
revenue-administration body across federal, state, and local governments will
now reduce multiple taxation by aligning roles across tiers of government; enable
coordinated data sharing and joint enforcement and harmonize revenue policies
for more predictable taxpayer obligations.
By implication, the AKIRS boss announced 50 tax exemptions
and reliefs benefiting the masses to include: Personal Income Tax/PAYE,
National minimum wage earners exempt, Annual income ₦1.2 million exempt, lower
PAYE rates up to ₦20 million yearly income, gifts exempt, allowable Deductions,
Pension contributions and NHIS contributions.
Others are: Loan interest for owner-occupied homes, Life
insurance/annuity premiums, Rent Relief Allowance up to ₦500,000 or 20% of
rent, Pensions & Gratuities, Pension funds under PRA exempt, Retirement
benefits under PRA exempt and Loss-of-employment compensation up to ₦50 million
exempt, among others.
He therefore called on members of the public to support the
new tax regime, saying it was in the interest of the masses.
For Companies and Investments, the benefits include: CGT
exemption for retail investors, pension funds, REITs, M&A, security
lending; Capital losses deductible; No WHT on bonus shares; Stamp duty
exemption on documents for stocks/shares transfers; Lower business costs via
input VAT credits; CIT reduction from 30% → 25%; Harmonization of levies (TET,
NITDA, NASENI, etc) and Repeal of 60+ taxes/levies down to < 10;
moderation of excessive agency fees via Tax Ombud; and tax exemption for state
government bonds.
‘‘Personal Income Tax exemption or final WHT on fixed income
securities, lower WHT or exemptions to ease cash-flow pressures, final WHT on
foreign investors’ dividends and interest, TIN exemption for foreign investors;
Export Processing Zones; entities fully exempt if ≥ 75% of sales are exports;
If 25% sales made locally, tax applies to local sales.’’
According to him, ‘‘From 1 January 2028, full taxation
applies on all local-territory sales, Share Disposal, flat 10% CGT replaced by
0–30% progressive tax, disposals up to ₦150 million with gains ₦10 million
exempt; and gains exempt if proceeds are reinvested in same year.
Commenting on implications for States and Local Government
Areas, Sir. Okon stated that VAT formula was revised from 50% to 55% for
States, distribution: Equity 50% | Population 20% | Derivation 30%,
strengthened revenue administration and professionalism, improved compliance
through Tax ID, Stamp Duties on individuals now belong fully to states, and tax
harmonization eliminating multiple taxation.
‘‘States empowered to collect taxes for LGAs, consumption Tax
abolished, full digitalization: e-invoicing, e-payments, no cash handling,
better business environment and protection for SMEs, states administer virtual
currency taxes, focus on High-Net-Worth Individuals (HNWIs), National Tax
Identification Number (NTIN) for all taxpayers.’’
On implications for the Nation, Okon said it would
consolidate major tax laws into a unified framework, facilitate more
progressive tax system that protects the poor and boosts equity, enhanced
higher tax-to-GDP ratio and reduced dependence on oil, better environment for
investment and business growth, remove wasteful levies and reduction of
leakages, sustain stronger accountability via the Nigeria Revenue Service,
improved tax refunds, better national data, and stronger fiscal planning. As
well as harmonized national taxpayer identification.
Speaking on Economic and Operational Impact, he said the tax
reform frees capital for expansion and job creation, smooth transition from
small to medium scale, improves cash flow and reduces administrative
bottlenecks, protects struggling firms, promotes recovery, encourages staff
welfare and employment growth, enhances liquidity with faster VAT recovery,
promotes consolidation without tax penalties and builds trust through Ombud
oversight.
Earlier, the State Chairman of Nigerian Union of Journalists,
Comrade Nsibiet John Udoh, commended the Chairman of AKIRS for the thought to sensitize
journalists who he said would then take the message to members of the public.
In their separate remarks, the Commissioner for Finance, Emem
Bob and his Information counterpart, Rt. Hon. Aniekan Ummah called for the organisation
of more trainings for journalists to enable them better educate the masses on impacts
and benefits of the new tax regime.
The Commissioner for Information called on journalists to
join in the campaign to sensitise the masses on the Nigeria Tax Reforms, while
assuring that Governor Umo Eno’s administration would put everything in place
to facilitate the smooth take off of the reforms by January 2016.
