Businesses, Tax Professionals Raise Fresh Concerns Over Implementation of Nigeria’s New Tax Regime

Dike Onwuamaeze Nigeria’s new tax regime is facing fresh scrutiny from businesses and tax professionals, who have called for clearer guidelines, harmonised regulations and greater certainty in its implementation to prevent the reforms from undermining investment, business growth and competitiveness. At a stakeholders’ forum in Lagos, leading business and professional bodies warned that unresolved issues around VAT refunds, working capital, capital gains tax, compliance requirements and the tax threshold for small and medium-sized companies could increase the burden on existing taxpayers and discourage businesses from expanding. The groups included the Chartered Institute of Taxation of Nigeria (CITN), Institute of Chartered Accountants of Nigeria (ICAN), Chartered Institute of Directors Nigeria (CIoD) and Lagos Chamber of Commerce and Industry (LCCI).They expressed their views during the “2026 LCCI’s-OPS Stakeholders’ Forum on Emerging Tax Matters.”President of ICAN, Mrs. Sofuratu Seghosime, who was represented by the Second Deputy Vice President of ICAN, Mr. Tajudeen Adewale Olayinka, said ICAN supports reforms that broaden the tax base, improve administration and strengthen government revenue. Seghosime noted that the fundamental position of her institute was that revenue mobilisation must go hand-in-hand with economic productivity, investment, employment, business growth and voluntary compliance.Commenting on small and medium company’s cliff effect, the president of ICAN, said that “a business that crosses the N100 million threshold, even marginally, moves from a zero Companies Income Tax (CIT) rate to a significantly higher tax burden, including 30 per cent CIT and development levy. “This may discourage growth or encourage artificial fragmentation of businesses.”ICAN also recommended that, “tax commencement and transition provisions should be expressly stated in legislation, with no retrospective application. “Capital gains provisions should provide clearer reinvestment rules, appropriate transitional arrangements and adequate multi-year capital-loss carry forward.She warned that a business that is “overwhelmed by excessive tax administration burden and compliance costs will eventually produce neither employment nor sustainable tax revenue.”For his part, the President of LCCI, Mr. Leye Kupoluyi, said there was a fundamental distinction between increasing tax revenue and increasing the tax burden on existing taxpayers. Kupoluyi added: “The first should be our objective. The second should not become the default strategy.“If we repeatedly increase the burden on the same formal businesses that already pay their taxes, we risk weakening their capacity to invest, employ workers, expand production, and compete internationally. “The more sustainable strategy is to expand the tax base, improve compliance, and reduce leakages.”In his contribution, the President of CITN, Mr. Innocent C. Ohagwa, who was represented by a Fellow of the CITN, Dr. Titilayo Fowokan, said for the reforms to deliver their intended outcomes, its implementation should provide clear and accessible guidelines and rules; give taxpayers reasonable certainty about their obligations; make compliance as straightforward as reasonably possible; apply requirements proportionately to taxpayer size and capacity and use technology to make compliance easier and more efficient. He said: “There are still significant gaps in public understanding of the new tax regime, including questions around transitional provisions, applicable legislation, filing obligations and the interaction between existing and new requirements.,” adding that “gaps remain and they underscore the need for continuous and consistent taxpayer education. “Businesses should not be caught between several regulatory demands. “There is need for harmonised positions on guidelines to ensure that businesses and individuals are properly guided to enable timely compliance,” Ohagwa said. The President of CIoD Nigeria, Mr. Adetunji Oyebanji, said that the success of tax reform should not be measured solely by increased revenue. According to Oyebanji, it should also “be assessed by whether the reforms improve compliance, broaden the tax base, reduce informality, strengthen taxpayer confidence and support a more competitive Nigerian business environment.”