Nigeria Begins New Tax Regime as Economists Urge Calm Amid Public Fears

Nigeria on Thursday, January 1, 2026, officially began implementing its highly anticipated tax laws and fiscal reforms, a move that has triggered widespread concern and intense public debate across the country.

President Bola Ahmed Tinubu had earlier reaffirmed that the new tax regime, signed into law in June 2025, would take effect on January 1, 2026, despite mounting pressure from stakeholders calling for a temporary suspension to allow for further consultations and legislative review, PulseNets learnt.

Among those who publicly urged the Federal Government to halt the rollout were 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, as well as several opposition political parties.

The controversy deepened after a federal lawmaker, Abdulsamman Dasuki, raised alarm over alleged discrepancies between the passed tax legislation and its gazetted version. PulseNets reported that the development sparked public outrage, prompting the leadership of the National Assembly to order a fresh re-gazetting of the laws to address integrity concerns.

Defending the reforms, President Tinubu assured Nigerians that the new tax framework would not impose additional hardship on citizens already grappling with economic pressures.

His assurance was reinforced by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, who insisted that the implementation was critical to restructuring Nigeria’s revenue architecture and ensuring long-term fiscal sustainability, PulseNets obtained.

Further clearing the way for implementation, Justice Bello Kawu of the Federal Capital Territory High Court dismissed a lawsuit seeking to stop the enforcement of the new tax laws.

Despite these reassurances, anxiety persists over the possible implications of the reforms on household incomes, consumer prices, small businesses, and corporate operations.

Speaking on the matter, a university lecturer, economist, and chartered accountant, Prof. Godwin Oyedokun, urged Nigerians to separate facts from fear, stressing that the reforms demand informed engagement rather than panic.

“These reforms require calm understanding, not fear driven by misinformation,” Oyedokun told PulseNets.

He explained that the primary aim of the new tax laws is not punitive but corrective, focusing on strengthening government revenue in a sustainable and equitable manner.

“The objective of the new tax laws is not to make life harder for Nigerians,” he said.
“It is to improve revenue efficiency, block leakages, and reduce the country’s dangerous dependence on oil income.”

According to Oyedokun, Nigeria’s tax-to-GDP ratio remains among the lowest globally, significantly constraining government capacity to finance infrastructure, healthcare, education, and national security without resorting to excessive borrowing.

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

Impact on Low-Income Earners

Addressing concerns that the reforms could deepen economic hardship, Oyedokun noted that most low-income earners are unlikely to be directly affected.

“Personal income tax thresholds and exemptions remain in place to protect the most vulnerable Nigerians,” he said.

He added that the greater tax burden would fall on high-income earners, large corporations, and sectors with historically weak compliance records.

“The expectation is that those who earn more and those who have long operated outside effective oversight will now contribute their fair share,” he added.

However, he cautioned that indirect effects could still surface.

“There is a risk that some businesses may transfer compliance costs to consumers through higher prices, especially given the current inflationary pressures,” he warned.
“This outcome will largely depend on enforcement discipline and market competitiveness.”

What Businesses Should Expect

For businesses, Oyedokun acknowledged that the reforms may initially feel burdensome.

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

However, he stressed that the measures are designed to level the playing field.

“These reforms aim to ensure fairness so that compliant businesses are not punished while others evade the system,” he noted.

According to him, effective implementation could ultimately benefit the private sector.

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

Call for Caution and Accountability

Oyedokun advised Nigerians to remain informed and actively engaged as the reforms take effect nationwide.

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

He also emphasized the government’s responsibility to ensure accountability.

“Taxes must translate into visible public value,” he warned.
“Without transparency and service delivery, even well-designed tax laws will face resistance.”

Also Read: New Tax Laws: Tinubu Rejects Suspension Appeal, Confirms January 1 2026 Implementation

Oyedokun concluded that the success of the new tax regime will depend on public trust, clear communication, and responsible governance.

“There may be short-term discomfort, but widespread harm is not inevitable,” he said.
“If implemented fairly and with sensitivity to current economic realities, these reforms can benefit Nigeria in the long run.”