Review to Address VAT, Withholding Tax, Multiple Taxation and Other Implementation Gaps
The Federal Government has begun a six-week review of Nigeria’s tax reforms to address implementation gaps, ambiguities and unintended consequences that have emerged since the new tax laws took effect in January 2026.
The review will cover key areas including Value Added Tax thresholds, withholding tax, capital gains treatment and multiple taxation, with recommendations expected to feed into the Finance Bill 2027.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday in Abuja while inaugurating the Technical Subcommittee on Fiscal Policy and Tax Reforms.
Oyedele, who chairs the Presidential Fiscal Policy and Tax Reforms Committee, said implementation of the new laws had exposed areas requiring clarification and refinement.
He said the exercise was not intended to reverse the 2025 reforms but to improve their implementation and respond to emerging economic realities.
The Nigeria Tax Act 2025, Nigeria Tax Administration Act 2025, Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025 came into full effect on January 1, 2026.
According to Oyedele, the government received 134 submissions from across the six geopolitical zones following its call for public input, alongside additional submissions made in hard copies.
Stakeholders proposed clarifications on VAT thresholds, withholding tax and capital gains treatment, as well as stronger measures against multiple taxation and improved coordination among revenue authorities.
Other proposals included increased digitalisation and data sharing, stronger taxpayer rights, faster refunds, safeguards for small businesses and measures to improve investment and competitiveness in sectors such as mining, renewable energy, healthcare and capital markets.
Oyedele warned that excessive complexity could increase compliance costs for businesses, stressing that tax policy should support the wider economy rather than focus solely on revenue generation.
The subcommittee will also review the Deduction of Tax at Source Regulations 2024 and prepare revised withholding tax regulations.
It is further mandated to review the Companies Income Tax (Significant Economic Presence) Order 2020 and develop an updated framework aligned with the new tax laws and international practices.
Oyedele said withholding tax should remain an advance-payment and compliance mechanism rather than become an additional business cost or tax on working capital.
The minister gave the subcommittee six weeks to complete its assignment and submit its report.
The committee is chaired by the Permanent Secretary of the Federal Ministry of Finance, with the Chairman of the Tax Advisory Committee, Albert Folorunsho, serving as co-chair.
Its membership includes representatives of the Federal Ministry of Justice, Nigeria Revenue Service, Joint Revenue Board, Nigeria Customs Service, Central Bank of Nigeria, Debt Management Office, Budget Office of the Federation and Nigerian Investment Promotion Commission.
Other members include representatives of SMEDAN, Manufacturers Association of Nigeria, Nigerian Economic Summit Group, Nigerian Bar Association, ANAN, CITN, ICAN, NACCIMA and the Big Four accounting firms.
Folorunsho said the committee would seek technically sound and administratively practicable recommendations that respond to the realities facing taxpayers, businesses and government.