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On Thursday, January 1, 2026, Nigeria began implementing its much-anticipated new tax laws and budgetary reforms, causing great public disquiet.

President Bola Ahmed Tinubu maintained on Tuesday that the new tax regime, passed into law in June 2025, would go into effect on January 1, despite repeated appeals from various quarters for a pause to allow for further examination.

The Nigeria Labour Congress (NLC), the Minority Caucus of the House of Representatives, former Senate Leader Ali Ndume, human rights lawyer Femi Falana (SAN), former Minister of Education Oby Ezekwesili, Bauchi State Governor Bala Mohammed, and several opposition parties had urged the Federal Government to halt the implementation.

The debate over the tax reforms heated up after a lawmaker, Abdulsamman Dasuki, expressed concerns about supposed changes to the gazetted version of the tax law. Following the outrage, the leadership of the National Assembly directed that the legislation be re-gazetted to meet the concerns.

President Tinubu defended the reforms, assuring Nigerians that the new tax legislation would not impose additional obligations on residents.

Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, agreed that execution was important to reposition the country’s revenue architecture.

Further paving the way for the rollout, Justice Bello Kawu of the Federal Capital Territory High Court dismissed a complaint seeking to block the tax rules’ implementation.

Despite these assurances, public worry about the reforms’ potential effects on individual incomes, prices, enterprises, and corporate operations remains high.

In an interview on Wednesday, Prof. Godwin Oyedokun, a university professor, economist, and accountant, urged Nigerians to go beyond fear and disinformation, emphasizing that the reforms demand “calm understanding rather than panic.”

He stressed that the new tax regulations are not intended to punish taxpayers, but rather to increase long-term government revenue.

“The objective of the new tax laws is not to make life harder for Nigerians.

“It is to improve revenue efficiency, block leakages, and reduce the country’s dangerous dependence on oil income,” he said.

According to Oyedokun, Nigeria’s tax-to-GDP ratio remains one of the lowest in the world, limiting the government’s ability to fund infrastructure, healthcare, education, and security without resorting to excessive borrowing.

“What the government is trying to do is to broaden the tax base, not necessarily to raise tax rates across the board,” he noted.

Impact on low-income earners

Addressing concerns that the measures will exacerbate hardship, Oyedokun stated that most low-income individuals are unlikely to be directly affected.

“Personal income tax thresholds and exemptions are still in place to protect the most vulnerable Nigerians,” he explained.

“The greater responsibility is expected to fall on higher-income earners, large corporations, and sectors that have historically operated with weak compliance,” he added.

“There is a real risk that some businesses may pass compliance costs to consumers through higher prices, especially in an inflationary environment.

“But this depends largely on how the laws are enforced and how competitive the markets are,” he said.

What Business Should Expect

The economist admitted that the measures may be difficult for businesses to implement at first.

“Stronger reporting requirements and tighter enforcement will increase compliance costs in the short term,” he said.

“However, these measures are meant to ensure fairness so that companies that pay their taxes are not disadvantaged while others evade the system,” he noted.

“A transparent and predictable tax system can support business growth through better infrastructure, improved public services, and reduced policy uncertainty,” Oyedokun said.

Call for caution and accountability.

Oyedokun asked Nigerians to be aware and engaged as the new laws take effect.

“Nigerians should approach these reforms with informed caution, not panic,” he said. “Public education, dialogue, and engagement with tax authorities are essential.”

“Taxes must translate into visible public value.

“Without service delivery and transparency, even the best-designed tax laws will face resistance,” he warned.

“There may be short-term discomfort, but widespread harm is not inevitable.

“If implemented fairly and with sensitivity to current economic realities, these reforms can benefit Nigeria in the long run,” Oyedokun concluded.

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