By Ejire Folakunmi
The Minister of State for Finance, Taiwo Oyedele, has assured that enforcement of Nigeria’s new tax laws will not be arbitrary, stressing that the reforms are anchored on transparency, fairness, and clear policy intent.
Oyedele gave the assurance during a fireside chat at the 2026 Annual Conference of the Nigerian Bar Association (NBA) Section on Legal Practice, themed: “From Policy to Practice: Making Sense of Nigeria’s New Tax Reforms.”
He emphasised the need for stakeholders to understand the rationale behind tax laws, noting that policy intent should guide both interpretation and implementation.
According to him, professionals often focus on provisions of tax laws without considering their underlying purpose, which is critical for effective application.
Oyedele highlighted inconsistencies in Nigeria’s previous tax regime, particularly the disparity between personal and corporate tax burdens, which discouraged business formalisation.
“Under the old system, an individual could pay an effective tax rate of about 19%, but registering the same business as a company pushed the burden above 40%. This was contrary to global best practice,” he said.
He explained that the ongoing reforms are designed to incentivise formalisation, ensure policy consistency, and reduce discretion in tax administration.
Reflecting on past challenges, Oyedele cited instances where policy inconsistencies discouraged foreign investment, including abrupt proposals to increase taxes on gas companies.
“If policies can change overnight, it sends the wrong signal to investors. Consistency is critical,” he noted.
On inclusivity, the Minister said the new tax framework prioritises protection for low-income earners and small businesses.
He disclosed that individuals earning about N1M annually, as well as a significant portion of small businesses estimated at between 30M and 40M, have limited capacity to pay taxes and are therefore shielded under the reforms.
“Nearly half of working Nigerians earn less than N70,000 monthly. Taxing them aggressively would be unjust,” he said.
Oyedele added that the reforms eliminate practices such as minimum tax payments on loss-making businesses, describing them as a form of taxing capital rather than profit.
He further noted that essential goods and services, including food, education, and healthcare, have been exempted from Value Added Tax (VAT), making the system more progressive.
The Minister explained that multiple tax laws have been consolidated into four major legislations, including the Nigeria Tax Act and the Nigeria Tax Administration Act, to simplify compliance and improve coordination among tax authorities.
Addressing concerns over discrepancies in the law-making process, Oyedele acknowledged that errors occurred due to manual processes and multiple stages of review.
He said efforts are underway to correct identified issues through a proposed finance bill.
“What we need is a more transparent and reliable legislative process where every version of a law is publicly available,” he stated.
Oyedele also underscored the role of legal practitioners in shaping economic outcomes through tax advisory and compliance.
“The decisions lawyers help businesses make will determine investment, job creation, and revenue generation,” he said.
While acknowledging improvements in revenue utilisation, he called for greater efficiency, noting that Nigeria still trails countries such as South Africa in tax collection.
“If we improve collection, we can significantly increase funding for infrastructure, education, and healthcare,” he added.
He urged legal practitioners to focus on effective implementation, stressing that the success of the reforms depends largely on how well they are applied in practice.
The remarks were delivered at the NBA conference in Abuja.