President Tinubu of Nigeria signs New Tax Laws in Latest Reform Push

 

Nigerian President Bola Tinubu has signed four new tax laws to reform the economy and boost government revenue as a share of GDP.
The laws will reduce taxes for low-income households and small businesses, while making the wealthy and larger companies pay more, and offer a 20% rebate on annual rent.
The government aims to increase the tax share of GDP to 18% by 2030 and will give businesses a three-month window to adjust to the changes before implementation begins.
Nigerian President Bola Tinubu has signed four new tax laws, marking the latest chapter in his push to reform the economy of Africa’s most populous nation.

The new rules, which overhaul some levies that date back to Nigeria’s colonial era, are designed to boost government revenue as a share of gross domestic product from levels that rank it among the lowest in the world.

They will reduce taxes for low-income households and small businesses while making the wealthy and larger companies pay more. The bills are the most significant reforms since the president loosened currency rules and phased out fuel subsidies after taking office in 2023.

“These new laws represent more than fiscal reform,” Tinubu said at the signing ceremony in Abuja, the capital, according to a text of his remarks. “They reflect our commitment to fairness, transparency, and national development.”

Changes include offering Nigerians a first-ever conditional rebate of 20% on annual rent.

The government hopes to lift the tax share of GDP to 18% by 2030 from around 13% at the moment.

Tinubu will have to rely on Nigeria’s 36 state governors and 774 council heads to implement some aspects of the new laws, especially the exclusion of small businesses from certain taxes — a point he noted in his remarks.

“Let me be clear, signing these bills into law is only the beginning,” he said. “Implementation must be decisive, coordinated, and inclusive.”

The government will allow a three-month window before implementation begins to give businesses time to adjust to the changes, Taiwo Oyedele, who headed the tax reform committee, said in October.

Taken as a whole, Tinubu’s reforms have helped improve investor sentiment toward Nigeria, even as they were initially blamed for fanning a cost-of-living crisis that sparked deadly protests last year.

Foreign exchange reserves have increased and the naira has stabilized following a 70% depreciation against the dollar that was partly due to the removal of its peg against the US currency.

Source:Bloomberg