July 23, 2025

Nigeria is entering a new era of tax reform, driven by the vision of Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service. At the recent Domestic Investors Summit in Abuja, Dr. Adedeji reaffirmed his commitment to building a stronger Nigeria through fair, simplified, and growth-oriented tax policies. According to him, “We all can build Nigeria through tax reform”—and that process is already underway. Under his leadership, the FIRS is transitioning into the Nigeria Revenue Service, a unified tax authority that will consolidate federal, state, and local tax collection. This transformation is designed to reduce the burden on businesses, close loopholes, and improve compliance. One of the most significant features of this reform is a shift in philosophy: taxing business profits instead of investments. This approach ensures entrepreneurs are not penalized at the early stages of building their businesses, encouraging innovation and long-term growth. Dr. Adedeji highlighted that the new tax regime will take effect on January 1, 2026, following the signing of four critical bills into law by President Bola Tinubu. These new laws include measures to simplify tax administration, improve fairness in revenue distribution, and eliminate redundant levies. A key component of the new framework is the introduction of a 4% National Development Levy to replace a range of nuisance taxes, alongside clear VAT exemptions on essentials like food, healthcare, education, and housing. To streamline operations, the government is establishing a single taxpayer database, a joint taxpayer committee to reduce multiple assessments, and a modern dispute resolution mechanism. These initiatives are aimed at building trust between taxpayers and authorities, improving service delivery, and making tax administration more efficient. Businesses will also benefit from VAT credits on capital equipment, reducing the cost of expansion by up to 8%. Dr. Adedeji praised the cooperation between the Presidential Committee on Fiscal Policy and Tax Reforms, the National Assembly, and the executive branch in achieving these reforms. He emphasized that political will and collaboration across all levels of government have made this transformation possible, and it is now up to citizens and businesses to take full advantage of the new framework. In recent months, the FIRS has also improved its internal operations. Standard Operating Procedures have been rolled out across regional offices to eliminate inconsistencies, while over 80% of services have been digitized through platforms like TaxProMax. The agency has also launched the National Single Window Project to integrate customs and tax systems, making trade and tax compliance more seamless. These reforms are not just about raising revenue—they are about building a system that supports economic growth, reduces inequality, and strengthens the social contract. For businesses, this means lower compliance costs, fewer bureaucratic hurdles, and a fairer environment for competition. For the country, it means reduced reliance on oil revenues and a more resilient, diversified economy. As tax professionals, we believe this is a turning point. Now is the time to align your business with the new regulatory environment. We’re here to help you navigate these changes, optimize your tax position, and stay compliant as Nigeria moves forward. Tax reform is not just a government initiative—it’s a shared responsibility. Together, we can build a more prosperous future for all. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Executive Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji, has sounded the alarm over Nigeria’s staggering annual loss of $18 billion to illicit financial flows (IFFs)—a challenge he described as a direct threat to national economic stability. Speaking at a national conference on Illicit Financial Flows organized by the FIRS in Abuja, Dr. Adedeji pointed to aggressive tax avoidance strategies by multinational corporations, often enabled by outdated tax treaties, as key drivers of the problem. “Like many resource-constrained nations, we lose billions—$18 billion annually—through illicit financial conduits,” he said. “This is more than a policy issue; it’s a national emergency.” To address the issue, the FIRS is actively reviewing and renegotiating Nigeria’s Double Taxation Agreements (DTAs) to close loopholes exploited for profit shifting and capital flight. “Several of our treaties have become outdated and are now being misused. I’ve personally initiated renegotiations with various jurisdictions to modernize these agreements and better protect Nigeria’s economic interests,” Dr. Adedeji added. As part of wider reform efforts, the FIRS has also established a Proceeds of Crime Management and Illicit Financial Flows Coordination Directorate. Backed by the Proceeds of Crime Act (2022), the unit is designed to work collaboratively with law enforcement, the judiciary, private sector actors, and global development partners. Adding to the discourse, Irene Ovonji-Odida—member of the Mbeki High-Level Panel on Illicit Financial Flows—revealed that African countries lost an estimated $407 billion to IFFs between 2001 and 2010, with Nigeria among the highest contributors in West Africa. She highlighted that: Ovonji-Odida cautioned that unless African nations tighten regulatory frameworks, the region will continue to suffer from chronic underdevelopment. Also speaking at the event, Minister of State for Finance, Dr. Doris Uzoka-Anite, emphasized that tackling IFFs requires coordinated action across all sectors of society. “This challenge goes beyond the FIRS. It requires a whole-of-government and whole-of-society approach,” she stated. She noted that the Ministry is implementing a comprehensive strategy anchored on three core pillars: The conference gathered top stakeholders from government, civil society, and international organizations—underscoring a collective commitment to curb financial crimes and strengthen Nigeria’s fiscal resilience. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.