The Independent Media and Policy Initiative (IMPI) has described President Bola Tinubu’s new tax reforms as the most transformative pool of economic policies Nigeria has seen in a generation. The group said the vital Nigeria Tax Act 2025 and its accompanying legislation could ultimately stand as Tinubu’s enduring legacy, a major point for Nigeria’s economic renaissance, if properly implemented.
In a statement signed by its Chairman, Dr. Omoniyi Akinsiju, IMPI said the administration had achieved a milestone by enacting four new tax laws, the Nigeria Tax (Fair Taxation) Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act, which together mark a historic restructuring of Nigeria’s fiscal landscape.
“In the tradition of objective analysts, we have reviewed the new tax laws within the framework of policy contextuality, realism, and pertinence. Our verdict is that Nigeria’s federal administration, led by President Tinubu, has gifted the country a body of legacy fiscal policies with the potential to transform the Nigerian economic space more than any policy deployment in a generation,” the group declared.
According to IMPI, these reforms, when combined with the removal of fuel subsidies and the harmonisation of foreign exchange windows, reveal a coordinated blueprint for resetting Nigeria’s economic trajectory on a path of sustainability and inclusive growth.
“The ideal tax system raises essential revenue without excessive government borrowing. It should also do so without discouraging economic activities or deviating too much from tax systems in other countries. On this count, we submit that President Tinubu has accomplished multiple fiscal objectives in a single strategic manoeuvre, consolidating and reshaping Nigeria’s fragmented and complex tax architecture and emphasising rebuilding trust in the system,” the statement noted.
The new laws, IMPI said, were designed with a progressive spirit, encouraging compliance through fairness while positioning Nigeria as an attractive hub for both domestic and foreign investment.
“In this light,” it continued, “Nigeria has just now commenced its long-held crystallisation of its economic renaissance.”
President Tinubu himself captured the essence of the reforms during the signing ceremony, saying: “These new laws simplify our tax regime and deliver Nigeria’s first major pro-people tax cuts in a generation. They also provide targeted relief for low-income earners, small businesses, and working families nationwide.”
IMPI drew particular attention to the introduction of the Minimum Effective Tax Rate (ETR), which will take effect in January 2026. Under this provision, Nigerian companies that are part of multinational groups with a global turnover of €750 million and above — or local firms with an annual turnover of ₦50 billion and above — will be subject to a minimum effective tax rate of 15% on their net income. The group explained that this innovation aims to eliminate the double taxation of dividends and unrealised gains, while also encouraging global capital flows into Nigeria.
In addition, the Nigeria Tax Act 2025 introduces a new Economic Development Incentive (EDI), replacing the outdated “pioneer status” tax holiday. The EDI offers a 5% tax credit per annum over five years for qualifying capital expenditures, which can be carried forward if unused. This measure is expected to significantly reduce the tax burden of multinational firms and large-scale investors, while also promoting the establishment of tax-resident corporate structures within Nigeria.
Other investor-friendly measures include raising the tax exemption threshold for share transfers in Nigerian companies from ₦100 million to ₦150 million over any 12-month period, provided capital gains do not exceed ₦10 million. The act also encourages research and development by allowing deductions of up to 5% of annual turnover — an improvement over the previous cap of 10% of total profits.
“These are not just symbolic measures,” IMPI noted. “They are tangible, strategic actions aimed at attracting entrepreneurial capital and increasing Nigeria’s competitiveness in the global investment arena.”
The policy group further highlighted the far-reaching benefits for Micro, Small and Medium Enterprises (MSMEs). Under the new law, companies with an annual turnover of ₦100 million or less and total fixed assets not exceeding ₦250 million will enjoy a 0% income tax rate. This is a significant expansion from the previous ₦25 million threshold under the 2020 Finance Act and is expected to benefit many more businesses in Nigeria’s growing formal sector.
“Consequently, companies with a turnover of ₦100 million and above are now subject to paying Company Income Tax of 30%. However, as outlined in the NTA 2025, the 30% rate for large companies can be reduced through the use of targeted incentives and allowances,” the statement added.
Perhaps the most socially impactful provision is the removal of income tax for individuals earning ₦800,000 or less annually. IMPI described this move as a landmark moment for equity in taxation. “Nothing demonstrates the progressive nature of the new tax laws than this. We submit that this exposition of the progressivity of income taxes, as captured in the NTA 2025, will influence income distribution and aggregate demand, thereby driving economic growth. We can now envision the impact of the disposable income available to the approximately 5.8 million wage workers in this category,” the group said.
Referencing Nigeria’s historically low levels of foreign direct investment (FDI), IMPI argued that the clarity and ambition of the new tax regime could significantly reverse the trend. Citing the Central Bank of Nigeria’s balance of payments data, it noted that FDI inflows dropped to $0.25 billion in Q1 2025, compared to $0.31 billion in the previous quarter. But the group expressed confidence that, under the new tax regime beginning in January 2026, the country’s attractiveness to global capital would be significantly restored.
While praising the administration for bold leadership, IMPI stressed that the true measure of the reform’s success would lie in effective implementation. Still, it concluded with optimism: “The prospects of higher FDI inflows into the country continue to excite us, but more importantly, we look forward to the profound impact that will lead to a multi-level transformation of the Nigerian economy.”
With the Nigeria Tax Act 2025 now in place, the groundwork appears to have been laid for what IMPI called “the long-held crystallisation of Nigeria’s economic renaissance.”
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