The Federal Government has announced that the newly enacted tax reform laws will officially come into force on January 1, 2026. This timeline, according to the Executive Chairman of the National Revenue Service (NRS), Zacch Adedeji, is designed to give the government, taxpayers, and other stakeholders sufficient time to prepare for a smooth transition.
Adedeji made this known while addressing journalists at the State House in Abuja shortly after President Bola Ahmed Tinubu formally signed four tax-related bills into law. He explained that implementing such major fiscal changes mid-year could disrupt Nigeria’s budgetary and financial planning processes. Starting in a new calendar year, he noted, would ensure better fiscal alignment and policy coherence.
“Globally, tax reforms of this nature are not introduced halfway into the fiscal year. By beginning implementation on January 1, 2026, we are aligning with global best practices. It allows us time to adequately educate the public, update internal systems, and coordinate effectively with all stakeholders,” Adedeji said.
He emphasized that this six-month preparatory window—granted through the cooperation of both the National Assembly and the President—would help minimize disruption and ensure proper harmonisation with the country’s fiscal cycle. “By the special grace of Almighty God, this start date reflects a thoughtful and inclusive approach to reform,” he added.
Also speaking during the post-signing press briefing, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, hailed the reforms as “pro-poor” and focused on equity and inclusiveness. He stressed that the legislation was specifically tailored to ease the financial burden on Nigeria’s most vulnerable populations.
Oyedele revealed that under the new framework, a large segment of Nigerian workers and businesses would benefit from extensive tax exemptions. “More than one-third of all workers, both in the public and private sectors, will now be entirely exempt from paying Personal Income Tax under the PAYE (Pay-As-You-Earn) scheme. Additionally, over 90 percent of micro, small, and nano enterprises will no longer have to worry about taxes such as corporate income tax, VAT, withholding tax, or PAYE for their employees,” he stated.
Highlighting the direct benefits of the reform, Oyedele said the changes are designed to leave “more money in the hands of ordinary Nigerians,” thereby boosting disposable income and improving quality of life. Sectors such as food, healthcare, and education have been granted full VAT exemptions, a move he said would translate into lower prices for essential goods and services.
“Any residual traces of VAT on essential items like food, healthcare, and education have been completely eliminated. This is a deliberate step to reduce the cost of living for everyday Nigerians,” Oyedele added.
Furthermore, he disclosed that the VAT exemptions had been extended to include housing, transportation, and accommodation—expenses he identified as the top three categories of household expenditure in the country. “These three areas alone account for over 80 percent of what the average Nigerian spends money on. This reform is therefore a significant financial relief for families nationwide,” he said.
Beyond offering economic relief, the tax reform laws are also expected to modernise Nigeria’s tax system. Oyedele noted that the legislation introduces enhanced mechanisms for tax collection, reporting, and utilization, which he said would foster transparency and rebuild public trust.
“These new laws include provisions to make tax collection more efficient and to ensure that the revenue generated is transparently reported and accounted for. We expect this to enhance public confidence in how taxes are used to deliver social and economic value,” he said.
Moments before the briefing, President Tinubu signed four critical fiscal reform bills into law: Nigeria Tax Reform Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and Joint Revenue Board (Establishment) Act.
In his remarks, the President described the legislation as a pivotal moment for the country. “I have just signed into law the four fiscal reform bills. It is a new dawn for Nigeria,” Tinubu declared.
The new tax laws are part of a broader effort by the administration to drive economic transformation, improve public revenue, and create a more equitable and growth-driven tax system.