Nigeria’s sweeping tax reforms will exempt about 97 per cent of small and medium-sized enterprises (SMEs) from Corporate Income Tax (CIT), Value Added Tax (VAT), and withholding tax starting January 1, 2026, the Federal Government has reaffirmed.
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, disclosed this on Friday in Lagos after briefing President Bola Tinubu on the committee’s progress.
Oyedele said the reforms are designed to stimulate economic growth, promote inclusivity, and ensure shared prosperity, stressing that most small businesses will be completely removed from the tax net.
“Small businesses, 97 per cent of them, will be exempt from corporate income tax, VAT, and withholding tax. Large businesses, on the other hand, will benefit from reduced tax rates,” he said. “The goal is growth, fairness, and shared prosperity, and we are on track for implementation on January 1, 2026.”
He also addressed concerns over calls to suspend the reforms amid claims that the gazetted laws differ from the versions passed by the National Assembly. Oyedele explained that the bills underwent nine months of legislative scrutiny before being signed into law in June 2025.
Since presidential assent, he said the government has focused on public sensitisation, system upgrades, capacity building, and extensive stakeholder engagement to ensure a smooth rollout.
“These reforms are a work in progress. You don’t get perfection immediately; you improve as you go. We believe we are ready to commence,” he said.
Oyedele noted that two of the tax laws took effect earlier to give institutions adequate time to set up operational structures, such as new tax boards and administrative systems.
On revenue concerns, he emphasised that the reforms are not aimed at short-term revenue gains but at long-term economic expansion and fairness.
“This is not about instant revenue. Revenue comes from growth. When the economy grows, the tax base expands naturally. These reforms remove wasteful incentives, strengthen tax culture, and improve compliance,” Oyedele said.
He added that as more economically active but previously untaxed individuals and businesses begin to comply, government revenue will improve organically, without increasing the burden on low-income earners.
