00:00Nigeria's new tax law has teared public debates with Nigerians, questioning its impact on
00:05businesses and also government revenue. All of this we will be looking at on Guardian
00:10Talks right now. And we are going to be doing this alongside our financial analyst and the
00:16person of Mr. Ogunleye. This is Guardian Talks with Timitayo Olumofey. Stick around.
00:30Like we all know that since January 1st, the beginning of this year, 2026, the federal government
00:37has already implemented a new tax law, right? And to begin with, what's your reaction about this
00:46Nigeria's new tax law? What's regarding the reaction so far? Do you think the public really
00:52understand the intent of this new tax law or there is a communication gap from the government?
01:00The federal government to be precise.
01:02Thank you very much. I think there is a wide gulf in the information passed from the government
01:13side to the general populace. The populace have not been well informed on the new tax act. I
01:23think the Federal Ministry of Information and all other information agencies, including you,
01:28the journalists, should assist the government by informing the engineers, the engineers in
01:35the diaspora, and companies, organizations, doing business with and in Nigeria, of so many
01:45relevant sections in the General Tax Act. Basically, there are four acts. So it's like a lot of us
01:53are focusing on one of the acts. The President signed four acts into law in June 2025. The first
02:05word is the Nigeria Tax Act. The second word is the Nigeria Tax Administration Act. The third
02:15one is the Nigeria Revenue Service Establishment Act. That act successfully rebranded the
02:29Nigeria Revenue, the Federal Land Revenue Services to Nigeria Revenue Service. Then the fourth, but
02:36definitely not the least, is the Joint Revenue Board Establishment Act. It replaces the old
02:43Joint Tax Board Act. So these are the four laws signed into law, June 26, 2025, by the President of the
02:53the United States of the Federal Republic of Pennsylvania, the Federal Neum brand.
03:00Okay. How equitable is this new tax law framework, especially for middle income earners who feel
03:07caught between exemptions for low income earners and also the rising tax obligations?
03:12Thank you very much.
03:15I think, like you rightly mentioned, effective force in January 2026.
03:22Yeah.
03:23The laws, the tax laws, the appeals, becomes, comes into oppression.
03:31And basically it is to unify, in a progressive way, over 70 fragmented taxes and simplify them
03:48for operations by the Nigerian Revenue Services.
03:52What we notice in the new tax laws or the tax act is that it is progressive in nature.
03:59It favors the low or medium income annals.
04:04Those on the personal level and the corporate organizations.
04:09It's treated heavily on the high income annals,
04:14the businesses that are doing a lot of financial operations in Nigeria.
04:21For example, on the personal level, do you know that,
04:24hitherto, my personal income tax, it used to be between, monthly, it used to be between $300,000, $340,000, $350,000.
04:36Now, my personal income tax will be close to, monthly, it will be close to $600,000.
04:41Can you imagine?
04:43Part of the reforms of the new tax law is that if you are earning below $800,000 annually, you pay no tax.
04:53You don't need to pay any tax.
04:55Can you imagine?
04:56What it means is that you are earning below the national income minimum income.
05:02You know, the minimum wage monthly is $70,000.
05:06So, if we multiply $70,000 by $20,000, what you have is $840,000.
05:11So, effectively, if you are earning $800,000 below, it's like you are earning less than $70,000.
05:16So, the government has debit fees, not to tax.
05:18So, if you are earning $800,000, so, if you are earning debitable wage, that's $840,000.
05:25Your tax annually will be, monthly will be like $6,000.
05:29No, annually.
05:30You are only going to be taxed of $40,000.
05:33That is the difference between $800,000 and $840,000.
05:37Let me repeat that again.
05:38Right.
05:39If you are earning debitable wage, that is $840,000 annually.
05:43It means your taxable income is just $40,000.
05:47That is the $40,000 that is the excess of $800,000.
05:50So, your annual tax will be like $6,000, which is like 500 Naira in a month.
05:55You can see, it favors a low bidule income order.
05:58And all and all like that, until, when you get to $50 million and above annually,
06:04you pay as high as 25%.
06:06So, you see, that's one of the reasons why you have a lot of issues on social media,
06:12media, a lot of the rich men in Nigeria are complaining.
06:17Because that's the voices you are hearing.
06:19Any low income, middle income in Nigeria who complain about this tax,
06:24definitely do not know the component, what the tax laws are.
06:28Okay.
06:29So, let's look at the use of national identification number.
06:32That's our name, as tax identification number, which is a, it seems like a major shift here.
06:39So, how will this affect compliance, data privacy, and also in the informal sector?
06:45Thank you very much.
06:46You know, Nigeria currently have what we call tax to GDP ratio of 30.5%.
06:58And the government by 2030 have said, they want the tax to GDP ratio to be up to 40%.
07:06And what is the most, or the components rather, identification you can have from a Nigeria?
07:16There are three acceptable identification in Nigeria.
07:20The driver's license, the international passport, and the NIN number.
07:25So, which one do you think is most common?
07:27How many Nigerians have international passport?
07:29Right.
07:30How many Nigerians have driver's license?
07:31How many Nigerians have driver's license?
07:32How many Nigerians have driver's license?
07:33How many Nigerians have driver's license?
07:34How many Nigerians have driver's license?
07:35How many Nigerians have driver's license?
07:36So, the easiest one, the companies, is the NIN number.
07:37That is how you can bring a lot of people into the tax debt.
07:41Okay.
07:42What are the, just in one minute, sir, what practical steps should individuals, businesses
07:49take to stay compliant under this new tax law, and they can also avoid penalties?
07:56Thank you very much.
08:00This question is very good.
08:02Let me give you an analogy.
08:04If you are ill, you have issues with your health.
08:07You've got to see a medical doctor, a pharmacist, a nurse, or any medical person.
08:12If you have issues with the law, you've got to see a lawyer.
08:17So, if you have issues with tax laws, financial body issues, go and see a tax consultant, a financial analyst.
08:25Who can bring these things down into pieces for you?
08:29Who can let you know the allowances you can claim?
08:33The penalties that are adherent to this loss?
08:36And all other issues that you need to comply with.
08:39There are so many misinformation out there, on social media, on print and electronic media.
08:45And I'm glad your organization is doing this.
08:49At least this is a way to inform people of the components of the tax laws.
08:54So, what I would advise, like I've said, is for each and everyone, every taxable person or taxable adult, to get close or to visit his financial consultant or a tax person.
09:08Thank you, Mr. Ogunle, a financial expert.
09:12Thank you for your insight on this Nigeria's new tax law and what it means, literally, to Nigerians.
09:20And I hope we keep sensitizing Nigerians to know more about this new tax law because you said people are already focusing on just one aspect of the new tax law.
09:32And then they can also look into the other three aspects so that they can have full knowledge about this new tax law implementation.
09:40Thank you, sir, once again, for your time with Guardian.
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