TAX SERVICES

The widely discussed 5% fuel surcharge under Nigeria’s new tax laws is not a newly introduced levy by the current administration. Rather, it is a restatement of an existing provision previously embedded in the Federal Roads Maintenance Agency (Amendment) Act, 2007 (FERMA Act). Its inclusion in the new tax laws forms part of a broader effort to harmonise Nigeria’s tax framework, enhance transparency, and provide clarity on previously fragmented statutes. Importantly, the surcharge will not take immediate effect alongside the broader tax reforms slated for implementation in January 2026. Its commencement is subject to a formal order issued by the Minister of Finance and must be published in the Official Gazette. This phased approach is designed to allow for flexibility and ensure that implementation is aligned with prevailing economic conditions. Not all fuel products will be affected. Several energy sources commonly used by households are exempt from the surcharge, including household kerosene, cooking gas (LPG), compressed natural gas (CNG), and other clean or renewable energy products. These exemptions reflect the government’s intention to protect low-income households and promote the transition to cleaner energy alternatives. The underlying objective of the fuel surcharge is to create a sustainable, dedicated funding stream for road infrastructure and maintenance. According to the government, relying solely on savings from fuel subsidy removal will not be adequate to meet Nigeria’s recurring infrastructure needs. The surcharge is therefore positioned as a complementary mechanism to provide predictable financing for safer, more efficient road networks, which in turn are expected to reduce travel time, lower logistics costs, and improve vehicle lifespan. The government also maintains that the fuel surcharge aligns with the broader goals of the national tax reform agenda. Recent policy changes have reduced or suspended multiple taxes—such as VAT on diesel, excise duties on telecom services, and the cybersecurity levy—to ease the burden on citizens and businesses while improving efficiency across the tax system. Legally, the surcharge has been removed from the FERMA Act and re-enacted within the new consolidated tax laws. This reform ensures a clearer legal basis for enforcement, improves legislative coherence, and supports longer-term sustainability planning, particularly by incentivising the adoption of cleaner energy sources. Stakeholders are advised to monitor further announcements, especially regarding the Finance Minister’s gazetted order, which will trigger implementation. Businesses with exposure to fuel inputs—particularly in transportation and logistics—should begin assessing potential cost impacts and reviewing supply chain strategies in preparation for future compliance. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

The Nigeria Customs Service Board has officially approved a $300 de minimis threshold for low-value consignments entering the country via express shipments and passenger baggage. The new policy, which takes effect from Monday, September 8, 2025, was ratified during the Board’s 63rd regular meeting held on September 2, 2025. According to the National Public Relations Officer, Abdullahi Maiwada, the measure is designed to simplify import processes, reduce clearance delays at ports and border points, and support the growth of cross-border e-commerce. Key Highlights of the New Policy: The Customs Service emphasized that the initiative is part of broader reforms aimed at improving Nigeria’s trade facilitation environment and positioning the country as a regional hub for e-commerce logistics. Compliance and Enforcement To prevent abuse, strict monitoring and enforcement mechanisms will be applied. Any attempt to manipulate invoices, understate values, or evade duties may result in: The Service has also announced the establishment of multi-channel helpdesk platforms to assist stakeholders, handle inquiries, and resolve complaints during implementation. Additional Update: Officer Disciplinary Actions In a separate development, the Board reviewed internal disciplinary matters and: For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

The Federal Inland Revenue Service (FIRS) has officially approved eTranzact International Plc as a certified partner for the nationwide deployment of its new e-invoicing platform, known as the Merchant Buyer Solution (MBS). This development marks a significant step in the Federal Government’s ongoing efforts to digitise tax administration. Building on the earlier Tax Administration 2.0 initiative—which saw the introduction of automated VAT collection via secure API integration with banks—this new platform is set to standardise e-invoicing across all transaction types: B2B, B2C, and B2G. According to FIRS Acting Director of Tax Automation, Mike Adoga, the selection process was conducted in collaboration with the National Information Technology Development Agency (NITDA) to ensure that only providers with proven capacity and infrastructure were approved. Tayo Koleoso, Chief of Staff to the Executive Chairman of FIRS, noted that the approved service providers were carefully evaluated for their ability to deliver secure, scalable solutions. He emphasised NITDA’s critical role in enhancing data protection and cybersecurity measures to assure taxpayers of a safe and transparent process. Niyi Toluwalope, Managing Director/CEO of eTranzact, welcomed the endorsement, stating that e-invoicing represents a major opportunity to modernise business-to-government interactions. He highlighted that beyond compliance, the platform aims to promote transparency, operational efficiency, and added value for all parties involved. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

Nigeria’s ongoing tax reform agenda promises significant relief for businesses by eliminating input Value Added Tax (VAT) costs across entire value chains and streamlining compliance obligations. According to policymakers, these changes are aimed at lowering operational expenses, encouraging business expansion, and driving private sector-led growth. Speaking at the Nigerian Economic Society Group private sector forum, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, emphasized that the overarching objective is to create a tax environment that supports—rather than stifles—economic activity. “Taxes are a byproduct of economic growth. Without jobs or income, effective tax policies hold little relevance,” Oyedele stated, stressing the need to shift focus from tax collection to economic development. Historically, Nigeria’s tax system has placed a disproportionate emphasis on revenue generation at the expense of business viability. Oyedele noted that a more strategic approach involves enabling businesses to grow sustainably, thereby naturally broadening the tax base. A key feature of the reform is the removal of VAT on critical inputs across sectors such as food, healthcare, housing, education, and transportation. Unlike other jurisdictions—such as Ghana—where businesses can recover VAT on input costs, Nigerian companies have historically borne these expenses directly. The reforms aim to correct this imbalance, enhancing business competitiveness and profitability. “In Nigeria, whether you’re producing goods or delivering services, VAT on capital expenditure is a sunk cost. That’s changing,” Oyedele explained. By granting VAT recovery rights, businesses are expected to experience reduced cost burdens. Over time, market forces are likely to translate these savings into lower prices for consumers, thereby supporting inflation management and improving affordability. “Ultimately, what affects businesses affects consumers. Lower business costs can mean lower prices, even if not immediately,” he added. The reform framework positions the private sector as the primary engine of economic growth and a sustainable tax base. From SMEs to large corporates, the anticipated reduction in tax-related bottlenecks is expected to free up capital for investment, expansion, and job creation. With Nigeria’s tax-to-GDP ratio still below 10%—one of the lowest globally—these reforms represent a strategic pivot towards long-term economic competitiveness, increased formalisation, and greater attractiveness to both domestic and international investors. Beyond tax policy, Oyedele highlighted the need to address structural challenges such as multiple taxation, poor infrastructure, and high logistics costs—all of which distort market efficiencies and erode business margins. For example, the cost differential between rural and urban food prices is largely attributable to man-made inefficiencies rather than supply constraints. “We’ve halted monetary expansion; now the priority must be to lower business costs through coherent fiscal policy and coordinated reforms,” he said. The new tax regime, expected to take effect in January, offers different benefits across the business landscape. For corporates, it means reduced compliance complexity and a lighter tax load. For SMEs, it offers much-needed relief and liquidity for reinvestment. For consumers, it presents the possibility of more competitive pricing over time. Femi Egbesola, President of the Association of Small Business Owners of Nigeria (ASBON), echoed these sentiments, warning that without addressing arbitrary levies and informal taxation—especially at the local government level—the intended benefits of the reforms may not fully materialize for micro and nano businesses, which constitute the backbone of the MSME sector. “Policies must be inclusive. MSMEs can’t just be passive recipients of reform—they must be part of the design and implementation process,” Egbesola advised. As Nigeria advances its tax reform agenda, the expectation is that a more efficient, equitable, and growth-friendly tax system will not only provide relief to businesses but also help rebuild investor confidence and accelerate the country’s journey towards economic diversification. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

Paul Ikonne, a prominent figure in the All Progressives Congress (APC), has raised serious concerns about the current tax regime in Abia State, urging Governor Alex Otti to reconsider levies imposed on traders. He described the tax burden as counterproductive, harmful to small and medium-scale enterprises (SMEs), and detrimental to the region’s economic vitality. In a public statement, Ikonne highlighted the sharp increase in shop taxes within Ariaria International Market, where annual fees have reportedly doubled—from ₦18,000 to over ₦36,000 per shop. This, he noted, is causing undue financial strain on local traders and threatening the sustainability of commerce in the area. Similar complaints have emerged from other commercial hubs such as Ekeoha Shopping Centre and the Timber Market, where businesses are reportedly overwhelmed by what Ikonne described as “multiple and suffocating” taxation. “With over 88,000 shops in Ariaria alone, this tax translates to an annual total of approximately ₦3.1 billion,” Ikonne stated. “Such a policy puts enormous pressure on traders who are the backbone of the state’s commercial ecosystem.” He criticized the state government for allegedly abandoning its pre-election commitments to support the business community, claiming that the administration has instead introduced policies that exploit small business owners. Of particular concern is the administration’s handling of shop reallocations following market remodelling projects. According to Ikonne, the previous government signed a Memorandum of Understanding (MoU) ensuring traders could reclaim their shops post-renovation—a commitment he says the current administration has failed to honor. Traders are now reportedly being asked to pay as much as ₦15 million to re-acquire their shops, a fee Ikonne condemned as punitive and anti-business. Furthermore, he questioned the justification for imposing such heavy levies despite the state receiving substantial federal allocations—over ₦30 billion monthly—arguing that these resources should be sufficient to fund modern markets with essential infrastructure without passing the cost to traders. “This level of taxation contradicts the economic relief and business support objectives of President Bola Ahmed Tinubu’s Renewed Hope Agenda,” Ikonne asserted. “Rather than enabling growth, the current policies are stifling enterprise in one of Nigeria’s most commercially active regions.” Ikonne concluded by calling on Governor Otti to urgently revise the state’s tax structure, respect existing agreements with the business community, and implement inclusive, development-driven governance that supports long-term economic growth. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

In a significant move toward improving Nigeria’s regulatory landscape, the Corporate Affairs Commission (CAC) and the Financial Reporting Council of Nigeria (FRC) have announced a strategic partnership aimed at deepening inter-agency collaboration. This alliance is positioned to play a vital role in fostering economic growth, streamlining compliance processes, and elevating corporate governance standards across the country. The partnership seeks to harmonise the regulatory functions of both agencies, with a particular focus on simplifying compliance requirements for businesses—especially micro, small, and medium enterprises (MSMEs). By aligning regulatory frameworks, the CAC and FRC aim to eliminate redundancies, enhance reporting efficiency, and increase transparency across business operations. This unified approach is expected to reduce the regulatory burden on companies, helping them better navigate the evolving compliance landscape. For SMEs, which constitute a significant portion of Nigeria’s private sector, this collaboration could mark a transformative shift. The harmonisation of reporting obligations and oversight mechanisms is intended to lower administrative costs and improve ease of doing business, allowing entrepreneurs and corporate entities to focus more on growth and innovation. Moreover, this partnership underscores a broader commitment to fostering a more investor-friendly environment. By promoting accountability, responsible corporate behaviour, and sound governance practices, the CAC–FRC initiative is poised to boost investor confidence and attract sustainable domestic and foreign investment into Nigeria’s business ecosystem. As a tax consulting firm, we recognize the importance of such regulatory developments in shaping the financial and operational landscape for our clients. We will continue to monitor the implementation of this partnership and provide tailored advisory services to help businesses take full advantage of the opportunities it presents. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

Nigeria’s equities market witnessed sustained bearish sentiment last week, with renewed sell pressure exacerbated by the reintroduction of Value Added Tax (VAT) on capital market transactions and the continued absence of strong fiscal incentives to attract long-term investments. This combination of regulatory burden and lack of investor stimulus led to a significant decline in market performance, driving the All-Share Index (ASI) below the psychological threshold of 27,000 basis points. Speaking with Business a.m. on Friday, stockbrokers attributed the decline to a mismatch between market fundamentals and recent corporate performance. Despite a number of positive corporate actions—such as dividend declarations and robust earnings reports—the equities market remained subdued, unable to mount a meaningful recovery. For the week ending Friday, the ASI of the Nigerian Exchange (NGX) depreciated by 1.40%, closing at 26,925.29 points, while the overall Market Capitalization fell to ₦13.121 trillion. This brought the year-to-date (YTD) performance to a wider loss of 14.33%. With the exception of the NSE Premium Index, which recorded a modest gain of 0.64%, all other sectoral indices closed in the red. This negative trend persisted even though the trading week was shortened to three days due to public holidays declared by the Federal Government for Eid-El-Kabir celebrations on Monday, August 12, and Tuesday, August 13. While traders had anticipated a potential rebound on Friday—fueled by Guaranty Trust Bank’s release of its audited financials showing a 4% increase in post-tax profit to ₦99 billion and an interim dividend payout of 30 kobo per share—market sentiment remained largely bearish. GTBank’s share price rose by 0.97% to close at ₦26, but this uptick was not enough to lift overall market performance. In terms of trading activity, the Exchange recorded a total turnover of 726.607 million shares worth ₦10.459 billion across 12,915 deals. This was a decline from the previous week’s total of 1.081 billion shares valued at ₦12.014 billion exchanged in 16,246 deals. The Financial Services sector once again dominated trading, accounting for 76.37% of the total volume and 62.14% of the value, with 554.910 million shares worth ₦6.499 billion traded across 8,376 deals. The Conglomerates sector followed, with 76.161 million shares worth ₦86.854 million, while the Consumer Goods sector recorded 29.783 million shares valued at ₦754.919 million. Top traded equities for the week were Guaranty Trust Bank Plc, Zenith Bank Plc, and Transnational Corporation of Nigeria Plc. These three stocks accounted for a combined total of 303.101 million shares valued at ₦5.404 billion, representing 41.71% of the total volume and 51.67% of the market’s total value for the week. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

Domestic airline operators in Nigeria, under the Airline Operators of Nigeria (AON), have issued a strong warning regarding the Tax Reform Act signed into law by President Bola Tinubu on June 26, 2025. According to AON, if implemented as scheduled on January 1, 2026, the reforms could “cripple airline operations within 48 hours.” The sweeping legislative package includes: The potential impact of these reforms was a major point of discussion at the 29th Annual Conference of the League of Airport and Aviation Correspondents (LAAC), themed “Financing Aviation in Nigeria: Risks, Opportunities, and Prospects.” Concerns from Industry Leaders Allen Onyema, Vice Chairman of AON and Chairman of Air Peace, Nigeria’s largest airline, described the new tax measures as unsustainable for an already fragile industry. “Airlines in this country are taxed to death,” Onyema stated. “If implemented, these reforms will reintroduce customs duties on imported aircraft, spare parts, and tax airfares—all of which directly threaten the financial viability of carriers.” He argued that aviation operates on razor-thin profit margins—typically 3% to 5%, compared to much higher returns in sectors like agriculture or general importation. Imposing multiple levies, especially without corresponding value or infrastructure improvements, would render domestic airlines unprofitable. Onyema also criticized the 5% Ticket Sales Charge (TSC) collected by the Nigerian Civil Aviation Authority (NCAA), noting that most airlines don’t even realize 5% net margins, making the charge disproportionately burdensome. “We are not saying government shouldn’t earn revenue, but charges should be cost-recovery based, in line with ICAO standards,” he added. Macroeconomic Context and Policy Signals Bismarck Rewane, CEO of Financial Derivatives Company, added a macroeconomic perspective, citing the aviation sector’s 0.81% contraction in Q1 2025—its sixth consecutive quarterly decline. Rewane emphasized the need for policy consistency to rebuild investor trust and attract global aviation capital. “Without coherent and stable policies, investor confidence erodes. Regulatory clarity is essential for the survival and expansion of the sector,” Rewane noted. A Call for Immediate Government Intervention While the Federal Government aims to boost revenue through reforms, AON insists that a one-size-fits-all approach could jeopardize aviation’s strategic role in national development. The Minister of Aviation and Aerospace Development, Festus Keyamo, is reportedly engaging with stakeholders to address the concerns raised. Tax Consulting Insight: With the 2026 implementation of the Tax Reform Act approaching, industry stakeholders—particularly those in capital-intensive sectors like aviation—should urgently: This case highlights the critical importance of tax policy design aligned with industry realities. As advisors, our role is to help clients navigate reform uncertainty with strategic planning, risk mitigation, and engagement with tax authorities. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

The Chairman of the Enugu State Internal Revenue Service (ESIRS), Emmanuel Nnamani, has revealed that an estimated 99% of the state’s informal sector fails to remit taxes—posing a significant challenge to revenue mobilization efforts. Speaking at a media briefing in Enugu, Nnamani addressed circulating social media claims alleging the imposition of illegal taxes by the state. He dismissed these reports as “false and misleading,” reaffirming that all revenue collection activities are grounded in existing legal provisions. “Enugu’s tax policies are fully compliant with the Personal Income Tax Act (as amended). We operate within the law and are committed to transparency,” Nnamani stated. He explained that the ESIRS administers taxes through two main mechanisms: Key Challenges in the Informal Sector Nnamani highlighted that the core difficulty lies in bringing informal players—such as market traders and transport operators—into the formal tax net. He noted that interference by non-state actors has historically undermined official revenue collection. To address this, the state has implemented a consolidated levy structure: Failure to remit taxes by March 31 attracts enforcement measures, including legal action where necessary. Nnamani stressed that Enugu’s tax regime is not an outlier, but consistent with federal tax laws and frameworks adopted across other Nigerian states. “We’re not trying to outdo any other state. Our goal is to uphold the law fairly and create an environment where our people and businesses can thrive,” he added. Insight for Businesses:As Enugu State strengthens enforcement and formalizes revenue collection in the informal sector, businesses—especially SMEs, vendors, and transport operators—should proactively regularize their tax status. Proper documentation and timely remittance can prevent enforcement actions and build long-term business credibility. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.

On August 1, 2025, the Federal Inland Revenue Service (FIRS) officially launched its electronic invoicing (e-invoicing) system, signaling a major advancement in Nigeria’s tax administration framework. This initiative aims to enhance transparency, reduce tax evasion, and align Nigeria’s tax processes with international best practices. Key Highlights: Our Take: The rollout of the FIRS e-invoicing system marks a pivotal moment in Nigeria’s journey toward a modern, tech-enabled tax infrastructure. For large taxpayers, timely integration will be crucial not only for compliance but also for maintaining operational continuity and managing reputational risk. Businesses are encouraged to assess their readiness, upgrade systems where necessary, and engage early with tax advisors to ensure a smooth transition. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd at www.innerkonsult.com at Lagos, Ogun state Nigeria offices. You can also reach us via WhatsApp at +2348038460036.