THE NIGERIA TAX ACT, 2025: WHAT YOU NEED TO KNOW
by Anthony Okolocha Odigwe Esq.
The Nigeria Tax Act, 2025, has been making waves, but let me set the record straight: it does not create a new tax on poor or ordinary Nigerians. Instead, it changes how the government collects tax, which will indirectly affect daily life of average Nigerian.
What the Law Did NOT Do
Contrary to rumors, the Act did not or will not tax:
- Bank balances
- WhatsApp messages
- Phone calls
- Church offerings, etc.
The Nigeria Tax Act, 2025, also did not create a “new suffering tax” on Nigerians.
What the Law Actually Did
The law focused on three key areas:
- Making businesses pay their fair share of taxes
- Reducing tax loopholes
- Improving digital tracking
Stricter rules and audits mean businesses will no longer underpay or avoid taxes.
Impact on Businesses
- Businesses will add compliance costs to prices, leading to slight increases in food and daily items
- Rent negotiations may get tougher, with landlords deducting taxes
- Transport and travel costs might rise due to compliance costs.
Impact on Salary Earners
- PAYE deductions are now clearer, with less room for under-deduction
- Employers will be more careful with PAYE issues, ensuring accurate tax payments
Impact on Small Businesses and Informal Sectors
- Small businesses will face pressure to register, keep records, and file returns
- This might lead to increased scrutiny and compliance costs
Impact on Churches, NGOs, and Cooperatives
- Not automatically tax-free; must file returns, deduct withholding tax, and keep records.
Who Feels the Tax Law Most?
- Businesses
- Employers
- Landlords
- NGOs
- Companies with poor records
The average poor Nigerian is not directly affected, but prices may adjust indirectly.
What Should Common Nigerians Do?
- Do not believe every tax rumor; ask questions before paying “tax”
- Always demand receipts for tax payments and understand the tax.
Conclusion
The Nigeria Tax Act, 2025, aims to improve tax compliance and revenue collection. While it does not directly tax common Nigerians, businesses will likely adjust prices which will eventually affect every Nigerian indirectly.
Independent journalism, sustained by readers like you.
The Parliament Diary is published by The Parliament Cable Network Service Limited. Your support helps us keep covering governance, parliamentary affairs and grassroots politics across Nigeria.