Segun Atanda/
Nigeria’s Minister of State for Finance, Taiwo Oyedele, has acknowledged that errors occurred in the drafting of the country’s new tax laws.
Oyedele made the admission during a fireside chat at the 2026 Annual Conference of the Nigerian Bar Association Section on Legal Practice, where he addressed concerns over the implementation and interpretation of the new tax framework.
Speaking on the theme, ‘From Policy to Practice: Making Sense of Nigeria’s New Tax Reforms,’ he said enforcement of the laws would not be arbitrary, stressing that the intention behind the reforms must guide both interpretation and execution.
“What we need is a system where enforcement is not random,” Oyedele said. “The reforms are built on clear policy intent, and that intent should guide how the laws are applied.”
In a notable shift, the minister openly admitted that the legislative process was not without flaws.
He attributed the errors to the complexity of drafting multiple laws through manual processes and layered reviews, noting that steps were already being taken to correct them.
“There were errors, and that is something we have acknowledged,” he said. “Given the number of reviews and the manual nature of the process, issues emerged, but we are addressing them through a proposed finance bill.”
He added that the experience had exposed the need for greater transparency in Nigeria’s lawmaking process.
“What we need is a more transparent and reliable legislative process where every version of a law is publicly available,” Oyedele stated.
Beyond the admission, the minister defended the rationale behind the reforms, arguing that Nigeria’s previous tax system was riddled with inconsistencies that discouraged compliance and economic growth.
He pointed to disparities between personal and corporate taxation as a major flaw.
“Under the old system, an individual could pay an effective tax rate of about 19 percent, but registering the same business as a company pushed the burden above 40 per cent. This was the opposite of global best practice,” he explained.
According to him, the reforms were designed to correct such distortions by creating incentives for businesses to formalise and by reducing discretion in tax administration.
Oyedele also highlighted the importance of policy consistency, warning that abrupt changes in tax policy had previously undermined investor confidence.
“If policies can change overnight, it sends the wrong signal to investors. Consistency is critical,” he said, recalling past proposals to sharply increase taxes on gas companies.
On the impact of the new framework, he stressed that the reforms were deliberately structured to protect vulnerable groups.
“Nearly half of working Nigerians earn less than N70,000 monthly. Taxing them aggressively would be unjust,” he said.
He disclosed that individuals earning about N1 million annually, along with tens of millions of small businesses, had been effectively shielded under the new system due to their limited capacity to pay.
The minister further explained that essential goods and services such as food, education and healthcare had been exempted from Value Added Tax, describing the move as part of efforts to make the system more progressive.
He also confirmed that practices such as imposing minimum tax on loss-making businesses had been scrapped.
“When you tax a business that is making losses, you are effectively taxing its capital, not its profit. That is not sustainable,” Oyedele noted.
To simplify compliance, the reforms consolidated multiple tax laws into four major pieces of legislation, including the Nigeria Tax Act and the Nigeria Tax Administration Act, aimed at improving coordination among tax authorities.
Despite these changes, Oyedele emphasised that the success of the reforms would depend largely on implementation, particularly the role of legal practitioners.
“The decisions lawyers help businesses make will determine investment, job creation and revenue generation,” he said.
He acknowledged that while there had been improvements in public revenue utilisation, Nigeria still lagged behind comparable economies in tax collection.
“If we improve collection, we can significantly increase funding for infrastructure, education and healthcare,” he added.
Oyedele urged stakeholders to focus on practical application rather than theoretical debates, maintaining that the reforms represented a necessary step towards a more efficient and equitable tax system.
“The real work is in implementation,” he said. “That is where the success or failure of these reforms will be determined.”
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