…Aims to achieve Tax-to-GDP ratio of 18%

…To intensify stakeholder engagement, grassroot mobilisation

By Emeka Anaeto, Business Editor

The Federal Inland Revenue Service, FIRS, has dissolved into Nigerian Revenue Service, NRS, as Nigeria’s new tax regime kick-starts today.

Meanwhile, the new tax regime is aiming to drive revenue growth to achieve tax-to-GDP ratio of 18%.

Nigeria’s tax-to-GDP ratio is currently about 13.5%, one of the lowest amongst the peers in Africa.

Meanwhile, following the formal commencement of operations of the new tax regime, the NRS unveiled its institutional brand identity yesterday in Abuja.

Also the new revenue agency has indicated that one of its core tasks is to secure the buy-in of all stakeholders especially the general public, at the backdrop of huge misinformation on the operation of the new task law.

To this end the Presidential Fiscal Policy and Tax Reform Committee is working with the National Orientation Agency, NOA, on a digital explainers and translations of the new tax law into major Nigerian languages, to carry the grass-root stakeholders along from the onset of the new tax policy implementation.

NRS said extensive consultations and stakeholder engagements will be carried out involving all key segments of society such as traders, women, youths, diaspora Nigerians, people living with disability and students.

The list includes CEOs/ Business Leaders; Multinational groups; Small Businesses – informal sectors; Fintech and the financial sector groups; Professional Bodies; Trade Associations; Tax practitioners; Legal and accounting firms; Telecommunications sector operators;  Real estate and construction sector operators; Transport and haulage operators; Hospitality and accommodation sector operators; the Oil & Gas industry; and Utility sector operators, amongst many others.

The purpose of the consultations which had began earlier this year, is continuing as the implementation programe commences.

New corporate identity

With the new dawn in revenue administration in the country which officially begins today the NRS, yesterday, unveiled its institutional brand identity.
NRS came into operation following the signing of its enabling law known as the Nigeria Revenue Service Establishment Act 2025 by President Bola Tinubu in June 2025.
Speaking at the unveiling of the logo on Wednesday in Abuja, the Executive Chairman of NRS, Zacch Adedeji, explained that the logo and other brand elements for NRS represent an important milestone in the evolution of Nigeria’s revenue administration framework.
A statement issued by his Special Adviser (Media), Dare Adekanmbi, quoted him as adding that “the unveiling of the NRS identity reflects a renewed commitment to a more unified, efficient, and service-oriented revenue system, one that is aligned with Nigeria’s economic transformation agenda and global best practices.
According to him, the new identity “signals continuity of purpose, strengthened institutional capacity, and a forward-looking approach to supporting taxpayers and national development.”
“The Nigeria Revenue Service remains committed to transparency, partnership, and service excellence. The unveiling of this new identity represents not an end, but the beginning of a strengthened relationship between the revenue authority and the Nigerian public—built on trust, clarity, and shared prosperity,” the statement said.

Under the new tax regime, NRS would function as the centralized agency for tax administration in Nigeria with effect from today.

The transition became official with the signing of the Nigeria Revenue Service (Establishment) Act, 2025, into law in June 2025. 

The primary objective of the NRS is to enhance tax compliance, improve revenue generation, and streamline tax administration across Nigeria. It is responsible for assessing, collecting, and accounting for all revenues (both tax and select non-tax revenues) that accrue to the government of the federation.

Unlike FIRS which focused primarily on federal taxes, the NRS has an expanded scope that includes a broader range of revenues, aiming to eliminate multiple revenue-collecting agencies at the federal level.

The NRS is an autonomous corporate body overseen by a Governing Board, chaired by an Executive Chairman who serves as the chief executive.

The core functions include administering federal tax laws such as Corporate Income Tax (CIT) and Value-Added Tax (VAT); Maintaining a centralized taxpayer database and issuing the free-of-cost Taxpayer Identification Number (TIN); Providing taxpayer education, guidance, and online services; and Enforcing compliance and prosecuting tax defaulters. 

The tax reform which ushered in the new tax regime, aims to create a more efficient and transparent tax system, with digital integration expected to ease the administrative burden on businesses.

The key objectives include harmonisation of multiple taxes and levies at all levels of government to a few that are broad based and easy to administer; Unification of revenue collection functions into single agency per level of government as much as possible; Modernisation and simplification of the tax system including the use of technology for revenue administration; Leveraging on data for intelligence to curb evasion and aggressive tax avoidance; Remove tax provisions which serve as impediments to business and economic growth; Devise structures and framework to institutionalise reforms for effective policy coordination and collaboration among government agencies and tiers of government; Improve efficiency of revenue collection and transparent reporting; Ensure effective utilisation of tax and other revenues for social good to boost citizens’ tax morale, promote tax culture and drive voluntary compliance; and Transform revenue generation for sustainable development to achieve at least 18% Tax to GDP ratio within the next three years.

The NRS is expected to secure a working support from some selected local and international observers and partners including the World Bank, International Monetary Fund, United Nations, BudgIT, Tax Justice & Governance Platform, amongst others.

Giving the outline of the guiding principle for new tax regime, the Presidential Committee on Fiscal Policy and Tax Reforms said it prioritized national interest where every member of the Committee, regardless of the affiliation or political interests, shall put Nigeria’s interest first and above all other considerations, adding that international best practice ideas would be considered within the local context.

It added that proposals must be evidence based and all submissions and recommendation must be data driven to the extent possible.

On the tax philosophy the committee said it believes in ‘‘Let everyone breathe’’ especially the poor, explaining that the government does not intend to tax poverty but rather promote prosperity and share out of it by way of tax.

It also said that taxes on investment or production will be eliminated to the extent practicable in favour of taxes on returns, income and consumption. 

Speaking further on the guiding principles, Dr. Taiwo Oyedele, the Chairman of the Committee, stated: ‘‘We do not intend to introduce new taxes or increase the rates of existing taxes except if it becomes necessary to compensate for harmonised taxes and levies or prevent revenue loss.

‘‘We will remove tax and fiscal bottlenecks and disincentives. Our goal is to promote investment and facilitate economic growth as a sustainable way to grow and diversify government revenue.

‘‘We will promote fiscal equity for all stakeholders including investors and businesses, both local and foreign, and all tiers of government – federal and subnational

‘‘We will seek and respect members and other stakeholders’ views. We will consult widely with all key stakeholders and the general public. Differences and disagreements should be expressed professionally with civility.

‘‘We will prioritise our interventions and recommendations focusing on the most impactful and relatively easy to implement measures in terms of time, cost and complexity starting with issues on which there is broad consensus’’.

Amid rising public anxiety over the ongoing tax reforms, Oyedele dismissed fears that the government plans to deduct money directly from bank accounts, insisting that such claims are “false, dangerous and capable of destabilising the economy.”
Speaking during a media workshop on the new consolidated tax law, Oyedele said the claims trending on social media were based on ignorance and deliberate misinformation.
He stated: “Let me say this clearly: nobody — not FIRS, not CBN, not any government agency — has the power to debit your bank account.”  

“Whether you have N50,000 or N50 million, nobody is taking any money from your account.’’

Oyedele explained that the allegation arose from the consolidation of major tax statutes into a single code, which led many to assume that the government had introduced new enforcement powers.
He clarified that the only existing mechanism that allows recovery of unpaid taxes is a court-ordered garnishee, which he described as “a long legal process that is almost never used.”

He stated further, “Even in extreme cases where someone owes hundreds of millions and refuses to pay, the government cannot just wake up and remove money.

“They must assess you, notify you, allow objections, conclude the process, go to court, and get a judge’s order. Without that, nobody can touch your account.”
According to him, in nearly three decades of tax administration work, he has “never seen a single instance where money was removed from an account without due judicial process.”
He recalled the attempt under former FIRS Chairman, Babatunde Fowler, to impose post-no-debit orders on accounts suspected of tax evasion — a move that failed without recovering a single naira.
“That process didn’t succeed, and it created unnecessary panic,” he noted. “Nobody is repeating that mistake.”
Addressing the misconception that banks will begin reporting all transactions, Oyedele said the 2020 Finance Act already required accounts used for business to have a Tax Identification Number (TIN).

He added that the new reform even raises the threshold for mandatory reporting from N10 million to N25 million, which he said translates to “almost N100 million a year before any report is triggered.
“NIBSS data shows that 98 percent of bank accounts in Nigeria have less than N500,000.

“Those accounts will never be reported. This provision is not new — it has been in place for five years.”

The tax reform chair warned that the ongoing rumours could cause harmful panic withdrawals.
“One thing that can damage the economy very quickly is people rushing to withdraw their money out of fear,” he cautioned, adding, “Nothing in the law authorises the government to debit accounts. Please help us educate others so we don’t create a problem where none
exists.”
Oyedele maintained that the goal of the reform is to simplify compliance, expand the tax net, and reduce the burden on households and small businesses.
He stated: “This reform is not to punish anybody. It is to make life easier, reduce double taxation, and support economic recovery’’.
Speaking at the 2025 Nigeria Media Merit Award (NMMA) ceremony in Lagos recently, Oyedele said tax reform goes beyond rates and revenue, stressing that it is fundamentally about rebuilding trust between citizens and the state.
He stated: “Tax reform is not just about loss, rates, or revenue generation. At its core, it’s about the social contract of trust between citizens and the state. People ask simple but powerful questions: Why should I pay tax? How is my money being spent? Is the system fair, such that everyone pays their fair share or is it just me paying?”.
According to him, such questions cannot be addressed by government alone, but require credible, independent and informed media engagement, noting that tax policy is particularly vulnerable to misinformation because of its direct impact on livelihoods.
“A credible tax system requires fair laws, honest administration, voluntary compliance, and vigilant public scrutiny of how taxpayers’ money is spent. On our part, we remain committed to reforms that are fair, inclusive, and worthy of public trust,” he assured.

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