Nigeria’s recently enacted tax reforms, which came into effect on January 1, 2026, could either ease financial pressure for millions of citizens or create new challenges, according to the Financial Sector Deepening Initiative, Enhancing Financial Inclusion & Advancement (EFInA).
President Bola Ahmed Tinubu signed four major tax bills into law on June 26, 2025, modernising the country’s taxation framework. The reforms include the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Act, and the Joint Revenue Board Act, all designed to reduce compliance burdens and improve transparency across the system.
EFInA highlights that low-income earners and small businesses stand to gain. Individuals earning ₦800,000 or less annually are now exempt from personal income tax, while companies with turnover below ₦100 million pay no corporate tax. In addition, essential goods such as basic foods, medicines, education materials, and electricity now attract zero value-added tax (VAT). A newly established Tax Ombudsman office provides citizens a platform to dispute unfair tax practices.
However, EFInA warns that the reforms could unintentionally disadvantage rural and informal operators. Its 2023 Access to Financial Services survey indicates that many of these businesses lack formal accounting systems, digital tools, or bank statements required for compliance. Women-owned businesses, in particular, may face barriers due to limited representation in formal financial systems and the administrative requirements tied to the new laws.
Brandspur notes that without targeted awareness campaigns, digital access support, and compliance assistance, EFInA cautions that the reforms may widen gender and regional gaps, undermining the intended goal of financial inclusion.
“Tax reform can either protect vulnerable Nigerians or add new burdens,” EFInA notes. “Consumer protection must ensure that these policies benefit the intended groups, rather than creating new obstacles.”
As Nigeria adapts to its modernised tax system, EFInA urges policymakers, financial institutions, and civil society to work together to ensure that low-income households and informal sector operators are adequately supported.
The challenge remains: will these reforms serve as a lifeline for financially vulnerable Nigerians or inadvertently hinder their access to formal financial systems?
