Tinubu Tax Reforms Shift Burden From Livelihoods To Profits

Nigeria’s tax landscape is undergoing a fundamental restructuring aimed at relieving low-income earners while tightening the net on high-net-worth individuals and corporate profits. Speaking at the 2026 BusinessDay Tax Conference in Lagos, Adesokan of the Joint Revenue Board (JRB) revealed that the reforms seek to stop “taxing poverty.” The new regime consolidates a fragmented library of laws, including VAT, Company Income Tax, and Personal Income Tax, into a single, unified “Nigeria Tax Act.” This simplification is designed to strip away the technical jargon that has long shielded the system from public understanding.

The most immediate impact will be felt in the wallets of the working class. Approximately 90 per cent of Nigerian income earners, specifically those earning ₦12 million or less annually, will see their tax liabilities drop or disappear entirely. This shift is intended to boost disposable income and stimulate domestic consumption. By moving the tax focus away from basic livelihoods and toward “targeting gains” and wealth creation, the government aims to create a more equitable fiscal environment.

Technology is being positioned as the primary weapon against corruption and revenue leakage. The JRB is digitising tax processes to remove human interference, which officials say will limit the “propensity for compromise.” Beyond federal collection, the reforms outlaw cash tax payments and illegal roadblocks used by non-state actors for extortion. A national task force, in collaboration with security agencies, will now enforce these prohibitions. If a tax officer asks for cash, it is a crime.

Small businesses are also receiving a significant reprieve under the new presumptive tax regulations. Micro-businesses with an annual turnover below ₦25 million are now exempt from taxation. For those above this threshold, a simplified tax calculated as a small percentage of turnover replaces the previous complex requirements. This measure aims to formalise the vast informal sector without strangling it with administrative costs. It is an olive branch to the millions of entrepreneurs who currently operate outside the formal economy.

Harmonisation is the final pillar of this reform. Fourteen states have already passed a “Model Taxes and Levies Act” to eliminate the scourge of multiple taxation, with sixteen more currently considering the legislation. This standardised framework will allow businesses to operate across state lines without facing a fresh battery of illegal levies in every local government area. The goal is a “win-win-win” scenario: higher revenue for the state, growth for companies, and transparency for the citizen.

Despite the relief for the majority, the regime demands stricter record-keeping. Employers must file annual returns by January 31, while individuals have until March 31. These records are essential for claiming refunds on excess taxes deducted from dividends, interest, or mortgages. Certain deductions, such as pension contributions and National Housing Fund payments, remain tax-exempt to encourage long-term financial planning. The government is not introducing new taxes; it is simply ensuring that those who can pay do so through a system that is harder to cheat.