Yemisi

In a significant fiscal shift set to enhance state revenues and reshape Nigeria’s tax framework, the Senate has passed two of four critical tax reform bills. These include a new Value Added Tax (VAT) revenue-sharing formula, though the VAT rate remains unchanged at 7.5%. Under the revised formula, the Federal Government’s share of VAT will drop to 10%, while states and the Federal Capital Territory will receive 55%, and local governments 35%. This marks a departure from the current allocation of 15% to the Federal Government, 50% to states, and 35% to local governments. Senate President Godswill Akpabio announced that the remaining two bills will be debated in plenary today. The two approved bills—the Nigeria Revenue Service (Establishment) Bill, 2025 and the Joint Revenue Board (Establishment) Bill, 2025—are part of a broader effort to modernize the tax system and now await approval from the House of Representatives and President Bola Ahmed Tinubu’s assent. These reforms aim to increase revenue, ensure transparency, and promote fair distribution. A key update is the redefinition of “derivation” to reflect the “place of consumption,” meaning VAT will now be distributed based on where goods and services are consumed, rather than where they are produced or sold. The new VAT allocation formula for states is 50% by equality, 20% by population, and 30% based on consumption. Local governments will receive their share with 30% allocated equally and 70% according to population. Additionally, the Senate halved the tax collection fee for revenue agencies from 4% to 2%, particularly for oil-related revenues, following concerns raised by Senator Seriake Dickson over excessive agency earnings. A notable structural change in the Revenue Service Bill places the President as Chairman of the Service’s Board, while an Executive Vice Chairman—subject to Senate approval—will lead operations. The bill also mandates six Executive Directors, one from each geopolitical zone, with appointments rotated to avoid regional dominance. Clause 4 of the bill expands the Service’s scope to include corporate tax assessment, collaboration with ministries for tax modernization, and authority to trace, freeze, or seize assets linked to tax evasion. Clause 13(2) requires the Board Secretary to be a qualified financial or legal expert, not below the Deputy Director level, and stipulates annual reports be filed within three months of the fiscal year’s end. The Senate also introduced strict penalties for tax noncompliance: failure to register will incur a N100,000 fine with a monthly N50,000 penalty; late return filings attract N200,000 initially and N50,000 monthly thereafter. Individuals who fail to keep proper records will face N10,000 fines, and companies N100,000. Failure to remit taxes may result in fines or imprisonment of up to three years. Senate President Akpabio commended the Finance Committee and senior senators for their collaborative approach in passing the bills. He rejected accusations of regional bias, emphasizing that the reforms are designed to serve all Nigerians fairly. With these developments, Nigeria moves closer to a transparent, efficient, and equitable tax system that empowers subnational governments and aligns with contemporary economic practices. 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.

In a statement released on Workers’ Day, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, emphasized that the proposed tax reform bills are designed to support Nigerian workers and small businesses. Sharing his message via his official X account, Oyedele called for collective support of the reforms, noting they aim to improve the net income and overall welfare of workers across the country. He highlighted several key provisions in the bills, including lower taxes and increased exemptions that directly benefit both employees and small business owners. Highlights of the Proposed Tax Reforms: Oyedele urged organized labour, including the NLC and TUC, to back the reforms, assuring that the bills are in the best interest of their members and all working Nigerians. “These reforms are not just about taxes—they’re about fairness, relief, and creating opportunities for the people,” he said. 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.

If you own property in Nigeria or aspire to you should be aware that property ownership comes with certain tax obligations. Whether you’re building, renting out, or selling real estate, there are taxes to be paid to various levels of government. In some cases, you’re taxed simply because your property benefits from public infrastructure. Property taxes can vary widely across Nigeria. Some are nationally applicable, while others are imposed at the state or local government level. Either way, they represent a cost to the property owner one that may be passed on to tenants or buyers. This post will walk you through the key facts about property taxation in Nigeria and what you need to know to stay compliant. Fact 1: Nigeria Has a Range of Property Taxes Most property taxes in Nigeria are administered by state governments, but local councils also impose levies on residential and commercial buildings. Here are some common taxes and fees: Fact 2: Tax Rates Depend on Multiple Factors Several factors influence how much tax is charged on a property: Fact 3: Commercial Properties Are Taxed Higher In the Federal Capital Territory (FCT), residential properties are taxed at 0.4% of their value, while commercial properties are taxed at 0.6%. Lagos applies a 0.456% rate for all property types, but owner-occupied residential properties enjoy a 40% discount—benefits not extended to commercial or industrial properties. Fact 4: Taxes Can Be Flat Fees or Percentage-Based Some levies are fixed in absolute terms. For example, a local government might impose a ₦500 per square meter development levy annually. In parts of Lagos, development levies range between ₦100,000 and ₦200,000. Other taxes are based on property value or transaction profit, such as: Fact 5: You Have Multiple Payment Options Property taxes can be paid through several channels: Navigating Nigeria’s property tax system can be complex, especially since rules and rates vary from one state to another. But understanding the basics will help you meet your legal obligations and avoid penalties. Whether you’re a landlord, a property investor, or just planning to enter the market, being informed is your first step toward responsible property ownership. 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 President of the Trade Union Congress (TUC), Mr. Festus Osifo, has voiced strong opposition to the Federal Government’s proposed tax bills, arguing that they place undue financial strain on workers’ already limited allowances. Speaking at the 2025 May Day celebration held in Abuja on Thursday, Osifo criticised the tax proposals, stating they unfairly target workers while allowing the wealthy and large corporations to escape similar burdens. He condemned the bills as “anti-worker,” stressing that they were developed without any input from labour representatives. “These tax proposals heavily impact our modest benefits — such as housing, transportation, and medical allowances — yet they fail to establish a fair taxation system that ensures the affluent contribute proportionately,” Osifo said. In particular, he denounced the plan to set the minimum taxable income at ₦800,000 annually, pointing out that this figure is only slightly below the new National Minimum Wage of ₦840,000 per year (₦70,000 per month). “How can you expect someone earning barely enough to afford eight 50kg bags of rice a year to pay tax? This policy blatantly disregards the harsh realities faced by Nigerian workers, especially in the context of rising inflation and economic distress,” he argued. Osifo also criticised proposals to broaden the Value Added Tax (VAT) to include essential goods and introduce new levies, warning that such measures would further drive up the cost of living and disproportionately hurt low-income earners. He raised concerns about the informal sector, warning that small-scale traders and artisans would be subjected to presumptive taxation and overwhelming compliance demands. “We demand the immediate withdrawal of these anti-worker tax bills,” Osifo declared. “Nigeria needs a just and inclusive tax regime—one that exempts basic necessities from VAT and genuinely supports the informal economy.” Turning to political issues, the TUC President called for comprehensive electoral reforms, citing a “crisis of political legitimacy” in the country. He urged President Bola Tinubu and the National Assembly to spearhead an inclusive reform process. “This transcends party politics—it is a patriotic responsibility. All stakeholders, including workers, civil society, political groups, and youth, must collaborate to reform our electoral system, ensuring it is transparent, accountable, and genuinely representative,” he said. Osifo emphasized that free and fair elections are vital to building a fair, just, and progressive nation. 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 Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has cautioned Nigerians against trusting investment firms that are not registered or regulated by the SEC, stressing that registration with the Corporate Affairs Commission (CAC) and possession of a SCUML certificate from the Economic and Financial Crimes Commission (EFCC) do not constitute proper regulatory approval. Speaking to journalists on Wednesday during a sensitisation tour against Ponzi schemes at Garki Market in Abuja, Agama emphasized the need for Nigerians to verify the legitimacy of investment platforms before putting their money at risk. “It is disheartening that some individuals and foreign entities are actively defrauding Nigerians. The government cannot stand by and allow this to continue,” he said. “This is why SEC is engaging directly with the public—to raise awareness and protect people from falling victim to fraudulent schemes. If something sounds too good to be true, it probably is.” Agama highlighted the new legal framework under the Investments and Securities Act, recently signed into law by the President, which prescribes a ₦20 million fine and up to 10 years imprisonment for those found guilty of running Ponzi schemes. He noted that the sensitisation campaign is part of SEC’s broader effort to inform the public, support victims, and expose red flags in illegal schemes. “We are here to help people confirm which investments are legitimate. We feel their pain, and through education, we are empowering them to make safer financial decisions,” he said. Agama warned that promotional training programmes used by fraudulent operators to lure victims are also illegal. “CAC registration and EFCC certification do not equal SEC approval,” he reiterated. “Always verify before investing.” Supporting the initiative, SEC’s Assistant Director in the Enforcement Department, Tope Onwionoko, stressed the Commission’s commitment to financial literacy, especially in curbing the spread of Ponzi schemes, which he described as a growing threat to society. 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.

At the 2025 Ministerial Press Briefing, Lagos State Commissioner for Economic Planning and Budget, Ope George, disclosed that the state government invested ₦130 billion in social intervention programmes in 2024, impacting over 18.5 million residents. These interventions included targeted transport subsidies to ease the burden of fuel subsidy removal, and the Ounje Eko food programme, which has improved access to affordable food for low-income households across the state. The Commissioner also reported a strong fiscal performance, revealing that Lagos State generated over ₦1 trillion in Internally Generated Revenue (IGR) last year, contributing to a total revenue of ₦2.08 trillion. The government has now set an ambitious revenue target of ₦2.968 trillion for 2025. From a public finance perspective, George highlighted key fiscal management strategies, including: The Lagos State government also trained 400 enumerators to improve data collection at the local level — a move that supports data-driven planning and revenue forecasting. Commending Governor Babajide Sanwo-Olu’s administration, George reiterated Lagos’ commitment to inclusive growth and prudent fiscal governance. With an estimated GDP of $259 billion, Lagos remains one of Africa’s leading sub-national economies — a promising indicator for investors and financial analysts alike. 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.

Guinness Nigeria Plc has bounced back to profitability, posting a ₦6.72 billion profit after tax for the nine months ended March 31, 2025. This marks a remarkable turnaround from the ₦61.65 billion loss recorded in the same period last year. According to the company’s unaudited financial results filed with the Nigerian Exchange Limited, revenue jumped by 71.5% to ₦377.94 billion, up from ₦220.30 billion in the prior year. The strong growth was driven predominantly by domestic sales, which accounted for ₦373.88 billion, while export sales contributed ₦4.06 billion. Despite a 79.8% rise in cost of sales to ₦274.41 billion, Guinness Nigeria recorded a gross profit of ₦103.53 billion, representing a 53% year-on-year increase. However, operating expenses also increased. Administrative expenses rose to ₦23.95 billion from ₦13.24 billion, while marketing and distribution costs climbed to ₦50.52 billion, up from ₦35.27 billion. The company faced significant finance expenses totaling ₦95.13 billion, largely due to foreign exchange losses on revalued currency balances. On the positive side, finance income surged to ₦80.26 billion from just ₦7.54 billion a year earlier, reflecting gains from foreign currency revaluation. Guinness Nigeria reported a profit before tax of ₦14.39 billion, reversing a pre-tax loss of ₦60.46 billion in the same period last year. After a tax expense of ₦7.66 billion, net profit stood at ₦6.72 billion. Earnings per share (EPS) improved significantly to 307 kobo, compared to a loss per share of 2,815 kobo in the previous year. The company’s total assets grew to ₦285.63 billion as of March 31, 2025, up from ₦226.13 billion in June 2024. This growth was supported by stronger inventory and receivables. Management emphasized that more than 98% of revenue was generated locally, showcasing Guinness Nigeria’s strong position in the domestic market. 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 Federal Government of Nigeria has announced that the proposed Tax Reform Bill, once passed into law, will exempt real estate transactions from Value Added Tax (VAT) — a strategic move aimed at lowering the cost of housing and building materials. This reform seeks to reduce the financial burden on low-income earners while stimulating growth in the construction and real estate sectors. Speaking at a forum organized by the Council of Registered Builders of Nigeria (CORBON) and the Housing Development Advocacy Network (HDAN), Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, detailed the bill’s far-reaching impact. Key Features of the Tax Reform Bill “There will be no VAT on land, real estate sales, or rent,” Oyedele noted, addressing long-standing areas of confusion and controversy in the sector. He also outlined additional relief measures, such as stamp duty exemptions for rents below ₦10 million per month and capital gains tax exemptions on the sale of residential properties. These initiatives are designed to make housing more affordable and tackle persistent tax issues in the real estate space. Supporting Local Production and Growth The bill also proposes targeted incentives for priority sectors, especially the local production of building materials like non-metallic products, to bolster Nigeria’s manufacturing capacity. Oyedele said the reforms will cover land transactions and property registration, including efforts to harmonize property taxes and simplify procedures, ultimately reducing costs and inefficiencies. “The goal is to ease the tax burden on tenants and make housing more accessible. Beyond that, it’s about boosting economic activity in construction and across the broader economy,” he explained. Combating Misinformation and Raising Public Awareness Oyedele encouraged the public to seek reliable information and avoid falling for social media misinformation. “This bill has significant benefits, but some misconceptions are being spread. It’s important that people understand the actual content and intent,” he said. Also weighing in, Minister of Housing and Urban Development Ahmed Dangiwa described the bill as a potential game-changer for construction firms and contractors. Represented by Temitope Gbemi, Director of Public Buildings, Dangiwa said the ministry has aligned its policies with the reform agenda to promote fairness, clarity, and investor confidence in the housing market. Legislative Progress The House of Representatives recently passed four key tax bills, including the Tax Reform Bill, aimed at accelerating economic growth. Initially submitted by the Executive in October 2024, the legislation underwent detailed scrutiny during a clause-by-clause review. The Senate is expected to begin deliberation on the bill following the Eid-El-Fitr and Easter recess — a major step toward its final passage. If enacted, the bill will remove VAT from real estate transactions, provide production incentives, and streamline property taxation, paving the way for a more affordable housing market and stronger economic performance in Nigeria. 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 International Monetary Fund (IMF) has called on Nigeria to expand its tax revenue base to enhance its fiscal policies. IMF Managing Director, Kristalina Georgieva, made this statement in Washington, D.C., during the 2025 IMF Spring Meetings. She emphasized that Nigeria, like many other African nations, needs to leverage technology and combat tax evasion to improve revenue generation. Georgieva noted that declining oil prices have placed additional strain on the budgets of oil-dependent economies such as Nigeria. Addressing monetary policy, she urged African nations to fight corruption, increase transparency, and implement strategies tailored to their unique economic conditions. “We’re no longer in a time where one can simply replicate the monetary policies of neighboring central banks,” she said. “Each country must assess its own domestic resource mobilization, inflationary pressures, and adopt policies that best suit its economy.” The IMF chief also encouraged the continent to enhance regional trade by removing existing barriers. She pointed to the Association of Southeast Asian Nations (ASEAN) as a model for deepening interregional trade and cooperation. “Infrastructure can sometimes be a hindrance, but the World Bank is actively working to address these challenges to boost growth and trade,” Georgieva added. She highlighted Africa’s vast potential, citing its rich natural resources, minerals, and youthful population. Countries like Nigeria, Egypt, Ghana, and Côte d’Ivoire, she advised, should continue efforts to strengthen their economic buffers. “I believe a more integrated and collaborative Africa has the potential to emerge as a global economic powerhouse,” she concluded. Georgieva also discussed the broader effects of global tariffs, stating that while the direct impact on African nations may be limited, the indirect consequences—especially in a slow-growing global economy—are substantial. 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.

In September 2024, optimism surged when Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, announced plans to eliminate Value Added Tax (VAT) on public transportation. The news was widely welcomed—not only by everyday commuters, but also by advocates of tax justice and economic equity. The proposed VAT exemptions were expansive, covering not just transport but also essential items such as unprocessed and semi-processed foods, bread, rent, education, and healthcare. However, for Nigeria’s road transport workers, the financial burden may simply take a different shape. For years, the National Union of Road Transport Workers (NURTW)—commonly known as “the union”—has operated with considerable autonomy, imposing a variety of levies on drivers. Depending on the route and location, these charges can range from as little as ₦100 to as much as ₦3,000—or in extreme cases, even ₦20,000 per day. Informally referred to as “union tax,” these fees are often passed on to passengers, thereby undermining the very affordability that the VAT exemption seeks to promote. This creates a troubling cycle: passengers continue to pay inflated fares, while commercial drivers see their daily earnings eroded. Speaking at the BusinessDay Tax Reforms Conference on April 22, 2025, Taiwo Oyedele acknowledged the issue head-on. “We are also mindful of these informal taxes by state actors,” he said. “That process is still ongoing. It’s not something one level of government can resolve alone. We are engaging local governments, state governments, and the federal government as well.” His remarks underscore a crucial challenge: despite the progressive nature of the tax reform bill, it remains unlikely to dismantle the entrenched system of informal levies imposed by transport unions and local authorities. Oyedele also emphasized the need to rethink how taxation affects low-income earners and small-scale operators. He envisioned a more intelligent, accountable tax system—one that targets actual profits rather than mere visibility or activity. Using a relatable example, he posed a question: “Let’s say I run a logistics business with motorbikes—why are the bikes being stopped on the road and taxed? This is a business. Let me make my deliveries, calculate my profits, and then pay income tax accordingly.” His argument highlights a deeper flaw in current practices: taxing activity without considering actual income or profitability. This concern is shared by many in Nigeria’s informal economy, where visibility often attracts taxation more readily than verifiable earnings. In the public transport sector, this means those who are most visible—drivers, riders, and vendors—are often the most heavily taxed, regardless of their actual income levels. As Nigeria pushes forward with its tax reform agenda, the true measure of success will lie not in policy announcements, but in execution. While VAT exemptions on essential goods and services offer some immediate relief, dismantling the entrenched system of informal levies—particularly those enforced by powerful unions like the NURTW—will require consistent political commitment and deeper institutional reform. Until such change is realized, both commuters and drivers may continue to shoulder the weight of a system that, despite reforms, remains largely unchanged. 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.