From Concept to Consolidation, the Making of a Modern Pro-Masses Tax System
By Zekeri Idakwo Laruba
By the time President Bola Ahmed Tinubu assented to the four landmark tax reform bills on June 26, 2025, Nigeria had already travelled a long and, at times, politically charged road. What ultimately crystallised as the Nigeria Tax Act (NTA), the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act was not an overnight legislative flourish. The idea was deliberate, and intentional. It was the product of executive vision, technocratic drafting, legislative contestation, and structured public engagement. The laws we have today are inseparable from the process that birthed them.
For decades, Nigeria’s tax system functioned through a maze of fragmented statutes. The Companies Income Tax Act (CITA), the Personal Income Tax Act (PITA), the Value Added Tax (VAT) Act, alongside numerous sectoral provisions and amendments, operated more as parallel regimes than as components of a coherent framework. Over time, the system grew dense and sometimes contradictory. Compliance costs mounted. Businesses complained of multiple taxation. Investors pointed to regulatory uncertainty. Disputes between federal and state authorities over revenue powers became recurrent. In a digital age driven by innovation and cross-border transactions, legacy laws increasingly appeared outpaced by economic reality.
It was against this backdrop that the reform impulse emerged. The objective was not merely to adjust tax rates but to re-engineer the architecture itself. President Tinubu’s administration constituted the Presidential Fiscal Policy and Tax Reforms Committee, chaired by tax expert, Taiwo Oyedele, with a mandate to review, harmonise, and modernise Nigeria’s fiscal framework. For more than a year, the committee engaged in research, comparative analysis, and consultations with public and private sector stakeholders. Its assignment was ambitious: consolidate disparate tax laws, simplify administration, reduce compliance burdens, particularly for small businesses, and strengthen revenue generation without suffocating growth.
One of the most consequential choices made at this stage was consolidation. Rather than continue layering amendments onto old statutes, the committee proposed repealing and merging multiple federal tax laws into unified instruments. This design philosophy fundamentally shaped what later became the Nigeria Tax Act. By collapsing overlapping provisions into a streamlined statute, the reform sought structural clarity. That clarity, more than any single tax adjustment, defines the character of the 2025 reforms.
Once transmitted to the National Assembly, the bills entered the formal legislative pathway. At First Reading, their long titles were laid before lawmakers. The more substantive engagement began at Second Reading, where legislators debated the general principles underpinning the reforms. The discussions were not perfunctory. Concerns surfaced about federalism, revenue allocation, timing, and regional implications. Some stakeholders, particularly in parts of Northern Nigeria, expressed apprehension about potential fiscal imbalances. Others argued that reform was overdue and essential to economic renewal. Despite the tensions, the bills advanced, reflecting a recognition that the status quo was unsustainable.
The committee stage proved pivotal. In February 2025, the Senate Committee on Finance convened a two-day public hearing that became the crucible of refinement. Senate President Godswill Akpabio framed the moment as a decisive opportunity to modernise Nigeria’s revenue system and leave behind outdated bureaucratic hurdles. Chaired by Senator Sani Musa, the sessions drew key government officials, including the Minister of Finance and Coordinating Minister of the Economy Wale Edun, the Attorney-General of the Federation, Lateef Fagbemi, and FIRS Chairman, Zacch Adedeji, alongside representatives of the organised private sector, tax professionals, and civil society groups.
Public hearings in Nigeria’s legislative culture are more than symbolic rituals. They are institutional mechanisms for legitimacy and technical refinement. Written memoranda were submitted and debated. Business groups sought clarity on VAT exemptions and thresholds. Tax experts proposed definitional adjustments. Civil society organisations emphasised fairness and transparency. These engagements influenced amendments that softened certain provisions, clarified administrative procedures, and attempted to cushion vulnerable sectors. What emerged from committee deliberations was therefore not identical to the original executive draft. It was a negotiated document, shaped by argument and compromise.
Following committee reports, the bills returned to plenary for Third Reading and passage. Where textual differences arose between the Senate and the House of Representatives, harmonisation mechanisms ensured alignment before final transmission. This reconciliation phase, though often overlooked in public discourse, is crucial in preventing inconsistencies and preserving legislative coherence. It reinforced the collaborative nature of the reform journey.
On June 26, 2025, presidential assent completed the constitutional cycle. Gazetting followed, authenticating the Acts and eliminating the risk of unofficial versions circulating in the public domain. Importantly, commencement was scheduled for January 1, 2026, creating a transition window for taxpayers, administrators, and subnational governments to prepare. That delayed implementation reflects an awareness that structural reform requires adjustment time to succeed.
The process itself profoundly shaped the substance of the laws. Executive initiation ensured policy direction and technical depth. Legislative debate injected political sensitivity and regional balancing. Public hearings enhanced practical viability. Consolidation as a drafting strategy produced coherence where fragmentation once prevailed. Even the phased commencement signalled prudence over haste.
The 2025 tax reforms therefore represent more than statutory revision. They mark an institutional recalibration. Whether the laws ultimately deliver simplified compliance, reduced multiple taxation, improved digital tax governance, and stronger revenue mobilisation will depend on implementation discipline. Yet the legislative journey offers its own lesson: durable reform in a democracy is iterative, consultative, and occasionally contentious.
In the end, what Nigeria has today is not merely a new tax code. It is the outcome of structured engagement between the Executive, the Legislature, and the public sphere. The genesis of the tax reform legislation, rooted in diagnosis, debate, and deliberation, has indelibly shaped its final form.