The Nigerian government has made significant strides in its tax reform efforts, with 21 states passing the model harmonised taxes and levies law. This development aims to eliminate multiple taxation and improve revenue administration across the country. According to Olusegun Adesokan, Executive Secretary of the Joint Revenue Board (JRB), the law will simplify tax collection and provide a more predictable tax environment for businesses. The reforms were developed in collaboration with the Presidential Committee on Fiscal Policy and Tax Reforms.
The harmonisation initiative has reduced over 100 different taxes, levies, and charges at the subnational level to nine categories. These categories include income tax, stamp duty, property tax, road tax, development levy, economic development levy, annual levies, user charges, and other approved charges. The new tax framework is designed to address multiple taxation, inconsistent levies, and confusing revenue collection practices that often place additional burdens on businesses operating across state boundaries. This move is expected to promote economic growth and encourage more businesses to operate in the formal sector.
The law prohibits the sale of stickers and emblems for revenue collection, the mounting of roadblocks for tax purposes, and unauthorised cash collection. Violators of these provisions could face legal consequences. Adesokan warned that the JRB will ensure compliance with the new tax laws, adding that the reforms are intended to expand disposable income, stimulate economic activities, and encourage more Nigerians to participate in the formal tax system. The goal is to ensure that the tax burden is fair and that Nigerians have the space to do their businesses, earn more, and improve their livelihoods.
The impact of the reforms on workers is significant, with an individual earning N20 million annually seeing their monthly take-home pay rise from about N1.281 million under the previous tax arrangement to approximately N1.362 million under the new framework. This represents monthly savings of more than N80,000, amounting to nearly N1 million annually, depending on the applicable deductions. Eligible deductions under the new system include pension contributions, mortgage interest, and qualifying rent relief, among other provisions used to determine taxable income.
The JRB has also disclosed that 20 states whose revenue performances were compared recorded a 27 per cent increase in revenue between January and June 2026, compared with the corresponding period in 2025. This increase came despite more income earners benefiting from lower or zero personal income tax under the new tax framework. Adesokan explained that the reforms were designed to ensure that individuals with lower incomes paid reduced or no personal income tax, while higher earners contributed according to the applicable tax rules.
The introduction of a unified national tax identification system is another key aspect of the reforms. This system is designed to make taxpayer records accessible across jurisdictions and reduce instances of multiple taxation. The system will allow state revenue authorities to verify taxpayer information and ensure that taxes are collected efficiently. This move is expected to promote tax compliance and reduce the burden on taxpayers.
The tax reforms have been well-received by businesses and individuals, who are expected to benefit from the reduced tax burden and simplified tax collection process. With more states expected to pass the harmonised tax laws, the Nigerian government is optimistic that the reforms will lead to increased economic growth, improved revenue administration, and a more favourable business environment. The JRB will continue to monitor the implementation of the reforms and make adjustments as necessary to ensure that the goals of the tax reforms are achieved.
Key points
- 21 Nigerian states have passed the model harmonised taxes and levies law to eliminate multiple taxation and improve revenue administration.
- The new tax framework has reduced over 100 different taxes, levies, and charges at the subnational level to nine categories.
- The reforms have led to a 27 per cent increase in revenue for 20 states between January and June 2026.
