Tax | Zikoko!

It’s 2026, and Nigeria’s tax system is operating under a new framework.

For years, taxation in Nigeria has been fragmented and outdated. It was a complex maze of overlapping laws and rules that were difficult to interpret, even for those who wanted to comply. Most Nigerians experienced it simply as deductions from their salary, VAT on everyday purchases, or something they hoped to avoid altogether.

The government promises the new tax laws will change that. According to policymakers, the reforms are designed to reduce the burden on low-income earners and small businesses, simplify compliance, and use technology to improve enforcement, particularly among high-income earners and large companies.

So, what actually changed? And what does it mean for your money?

The Reset: What Changed in Plain Terms

Previously, Nigeria’s tax system was governed by several separate laws, each targeting a specific type of taxpayer. The outcome was a complex system that was difficult to navigate and easy to exploit.

The 2026 reforms consolidate much of this framework into two central laws, with a few targeted changes to clarify provisions and streamline enforcement:

The Nigeria Tax Act (NTA): This outlines what is taxed and the corresponding amount.
The Nigeria Tax Administration Act (NTAA): This governs the collection, monitoring, and enforcement of taxes.

The intent is straightforward:

Simplify the rules.
Reduce pressure on lower-income Nigerians
Close the gaps that allowed significant income to remain untaxed.

At its core, the Nigeria Tax Act 2025 is designed to standardise how taxes are administered, reduce confusion, and improve collection efficiency, rather than introducing entirely new taxes.

How Tax Is Actually Paid in Nigeria

Nigeria uses a self-assessment system; however, not everyone pays their taxes the same way.

Salaried employees: Your employer handles everything through the Pay-As-You-Earn (PAYE) system. They calculate, deduct, and remit your tax before your salary hits your account. Your main job is to check that deductions are correct.
Self-employed or business owners: You are responsible for declaring income, calculating tax, and paying it directly. The government relies on your declaration, supported by bank and identity data.

Think of it like this: PAYE is automatic; self-assessment is trust-but-verify.

What The New Laws Mean for Salaries and Personal Income

If you earn a salary, freelance, or make money from multiple income streams, this is where the impact is most direct.

1. The ₦800,000 Exemption

Under the new law, anyone earning ₦800,000 or less per year is exempt from personal income tax. This also applies to Minimum wage earners.

This means:

No PAYE deductions
No personal income tax liability

For low-income earners who previously saw small but painful deductions from already tight salaries, this is a meaningful change.

2. Rent Relief (Applies to All Income Earners)

The 2026 tax laws introduce a rent relief that applies to all income earners. Under this provision, you can deduct 20% of your annual rent from your taxable income, capped at ₦500,000. This means that even if 20% of your rent is higher than ₦500,000, the maximum amount the tax authority will allow you to deduct is ₦500,000.

If you’re a salaried employee, your employer will factor this deduction into your monthly PAYE calculation, reducing the tax withheld from your salary.

If you’re self-employed or running a business, you subtract the relief from your total income when calculating what you owe. In either case, it simply lowers the amount of tax you are required to pay, leaving more in your annual take-home pay.

Why this matters: Rent is one of the biggest expenses for most Nigerians. By reducing the portion of your income that is taxed, this relief lowers your final tax bill, even if your salary itself hasn’t changed.

To benefit from this deduction, you must be able to prove your rent payments. In practice, this means providing a rent receipt. For salaried employees, this may involve submitting the receipt to your employer so the relief can be factored into PAYE calculations and forwarded to the tax authority.

3. Higher Earners Pay More

The new system is explicitly progressive, so the more you earn, the higher the rate applied to your top income. The highest tax rate is now 25%, which only applies to individuals earning over ₦50 million per year.

In simple terms:

Low earners pay nothing
All Income earners benefit from reliefs
High earners contribute a higher share

Progressive Tax Rates for Individuals

Income Tax Brackets	Tax Rate	What It Means
₦0 – ₦800,000	0%	This portion of your income is completely tax-free.
₦800,001 – ₦3,000,000	15%	Only the money in this bracket is taxed at 15%.
₦3,000,001 – ₦12,000,000	18%	Only the income in this bracket is taxed at 18%.
₦12,000,001 – ₦25,000,000	21%	Only the income in this bracket is taxed at 21%
₦25,000,001 – ₦50,000,000	23%	Only the income in this bracket is taxed at 23%
Above ₦50,000,000	25%	Only the income above this bracket is taxed at 25%

How to read it: Each bracket applies only to the portion of your income that falls within it, not your entire salary. For example, if you earn ₦12 million annually, the first ₦800,000 is tax-free, the next ₦2.2 million is taxed at 15%, and the remaining ₦9 million is taxed at 18%.

Who Gets the ₦100 Million Business Exemption

This is one of the most misunderstood aspects of the reform, primarily because the terms “business” and “company” have distinct meanings under Nigerian tax law.

Here’s how it works:

Who qualifies for the ₦100 million exemption under the 2026 framework

Incorporated companies registered with the Corporate Affairs Commission (CAC).
If an incorporated company’s annual turnover is below ₦100 million, it is classified as a small company.
Small companies are exempt from Company Income Tax (CIT).

Who does not qualify

Business names, even if registered with CAC.
Freelancers, consultants, and side hustles.
Sole proprietors and self-employed individuals.

These categories are not taxed under Company Income Tax (CIT). Instead, their income is taxed under personal income tax, which means the ₦100 million exemption does not apply to them.

It is important to note that the exemption applies to company income tax, not all business income. The company might still be liable for other taxes or taxes on income that don’t fall under CIT.

Even exempt companies must register with the tax authority, file annual returns and maintain basic records. Failing to file, even when no tax is due, can still attract penalties. Exemption only reduces the tax payable; it does not exempt you from your obligation to remain visible in the tax system.

What Medium & Large Companies Now Pay

Companies with annual turnover above ₦100 million are subject to tax under the 2026 reforms. Medium and large companies must pay two main taxes on profits: Company Income Tax (CIT) at a rate of 30% and a Development Levy at 4%, resulting in a total tax burden of approximately 34% of their profits.

Note: Companies in the oil and gas sector follow a separate tax system, which includes taxes such as the Hydrocarbon Tax (see Section 72 of the Nigerian Tax Act).

The takeaway: Cross the ₦100 million revenue line, and you jump straight from 0% tax to about 34% on profits. There’s no middle ground.

Minimum Tax for Very Large Companies

For extremely large companies, the law sets a minimum effective tax rate, which applies to:

Companies in a Multinational Entity group with a total group turnover of at least £750 million (or equivalent), and
Any company with an aggregate turnover of ₦50 billion or more in the financial year.

These companies are required to pay at least 15% of their profits in tax. For example, if a company earns ₦50 billion in a year, 15% of that is ₦7.5 billion. Even if their normal tax calculations would result in less, they must top up their payment to reach ₦7.5 billion, ensuring the government collects a minimum share.

Bank Access, BVN, and Surveillance Fears: What the Taxman Can Really Do

One of the biggest worries about the 2026 tax laws is whether the government can indiscriminately access or debit your bank account. Here’s what you need to know:

More visibility, not control: Tax registration now relies on BVN and NIN, linking your identity to financial activity. Banks must report transaction data more transparently to the Nigeria Revenue Service (NRS).
No arbitrary debits: Tax authorities cannot automatically withdraw money. Any enforcement must follow due process, including assessments, notices, and the right to respond.
Self-assessment still applies:
- Independent earners and business owners declare their income, calculate tax owed, and pay it.
- If spending or transactions significantly exceed declared income, the tax authority may query you, but legal procedures must be followed.

For salaried employees:

Employers still calculate, deduct, and remit PAYE before salaries are paid.
Employees must also file an annual tax return declaring all income, even if PAYE has been handled by their employer. This usually involves:
- Gathering all income information: salary slips, allowances, bonuses, and side income.
- Using the tax authority’s online portal (e-filing with your TIN).
- Declaring all income, including amounts already reported via PAYE.
- Submitting the return to ensure your records are accurate and compliant.
- Keeping receipts, payslips, and correspondence for a few years in case of queries.

Filing is primarily a confirmation process; you usually won’t owe extra if your employer has already deducted correctly, but it ensures your Tax Identification Number (TIN) record is accurate and protects you legally.

Transaction notes don’t matter: Words like “food money” or “urgent” don’t affect tax liability. Authorities focus on patterns, volume, and frequency.
Record-keeping is crucial: Maintain clear documentation of all personal and business transactions to avoid misclassification of funds.

What to Do Now

Get a Tax ID (TIN): It’s increasingly required for banking and formal transactions. You can apply and get one online in just a few taps through your state’s tax portal. Once approved, your TIN links your identity to the tax system and keeps your records up to date.

Separate personal and business finances, especially if you run a small business.
Check your payslip: If you earn under ₦66,600 monthly and still see PAYE deductions, something is wrong.
Use available reliefs: Rent relief only works if it’s properly declared.

Nigerians who have not been tax-compliant in previous years may feel the impact of the reforms more sharply, as the new enforcement systems rely on clearer records and structured filings.

The Bottom Line

The 2026 tax reforms are not perfect, but their direction is clear: reduce pressure on low-income earners, simplify compliance for small businesses, and tighten oversight where the money is.

For most Nigerians trying to earn, save, and build stability, the system is, on paper, more favourable than before. But it rewards transparency and organisation, not avoidance.

The days of being entirely invisible to the tax system are fading. Whether that becomes a burden or a benefit depends largely on how well you understand the rules and how prepared you are to work within them.

Note: This article has been reviewed for accuracy by tax lawyers and tax consultants.

Read Next: Nigeria’s Digital Debt Trap: The Human Cost of Loan Apps and Instant Credit

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Nicole*, 30, grew up seeing gold as a fashion and tradition, but a move to London turned it into her smartest financial safeguard. Now, she is using precious metals to beat cash volatility and build lasting wealth. Here is how she is stacking gold to secure her future and why she thinks you should too.

As told to Aisha Bello

I am an Edo woman. Stereotypically, we love loud jewellery — big earrings, heavy rings, the kind of pieces you see at parties. Where I’m from, people view gold as an aesthetic flex and, secondarily, as an investment.

However, since moving to the UK in 2022 and deepening my financial literacy, my philosophy has shifted. I have learned to place more value on being wealthy rather than merely appearing wealthy.

While I still own gold jewellery, I no longer treat it as an investment vehicle. Instead, I focus on gold bars and bullion coins. To me, gold remains a simple asset class that I understand, with intrinsic value, limited supply, and global trust.

The Aha Moment

My relationship with gold started early. When I was five, my ears reacted badly to non-precious metals, so my mother bought me my first pair of 18-karat gold studs.

But I didn’t understand the true power of gold and its ability to provide liquidity until I was 14.

My iPad had broken. I was broke, and I needed a desperate fix. My friend and I brainstormed ways to raise cash, and then I realised: I was wearing the solution. I had a necklace with a gold pendant and a pair of earrings. I took one piece to New Benin in Benin City and sold it.

It gave me enough cash to repair my iPad and some extra money. Looking back, selling it was technically a bad financial decision — gold prices have soared since.

But the lesson was invaluable: Gold is money. It is the ultimate store of value. If I ever need liquid cash, I know I can sell it anywhere, at any time, and get paid instantly.

My Strategy

Now that I am older, living and working in London, my strategy is driven by two things: volume and tax efficiency.

I hate taxes. If there is anything that makes me a conservative investor, it is the desire to legally avoid giving away my returns. This is why I have shifted my focus from small gold bars to bullion coins.

Here is the breakdown of why this matters in the UK:
- VAT: Investment gold, whether bars or coins, is exempt from Value Added Tax.
- Capital Gains Tax (CGT): This is the kicker. Selling a gold bar for a profit usually attracts tax. However, coins produced by The Royal Mint are considered legal tender. Because they are technically money, their appreciation is tax-free.
This classification gives me an edge. When I sell a gold coin for profit, the government doesn’t take a cut.

The Portfolio Breakdown

Gold is my safety net. It is my hedge against currency devaluation. My current collection, worth just over £2,000, looks like this:
- Bars (24-karat, 99.9% pure): One 1-gram bar, and two 5-gram bars (11g total).
- Coins (22-karat, 91% pure): One 8-gram coin.
I buy and forget. I don’t obsessively track daily price changes because this is a long-term play.

How I Buy

I started my journey buying tiny 1-gram bars. Now, I focus on buying in bulk to save money.

It works just like wholesale shopping: the smaller the bar, the higher the markup you pay on top of the gold’s actual value. By saving up and purchasing larger bars or coins, I pay significantly lower fees and receive more gold for my money.

To get the best value, it’s better to save up to buy in larger volumes rather than buying small pieces frequently.

My Purchasing Channels:
- The Royal Mint: It is incredibly easy and secure. You sign up, place your order, and they deliver within five days.
- Bullion by Post: I use this for pre-owned coins. They’re slightly cheaper than new ones, but of the same quality, just not mint fresh.
I pay online, the gold is delivered, and I put it away. Simple.

The Ambition: From £2k to £50k

Last year, I wasn’t aggressive with gold. I bought high, hoping the price would continue to rise due to global instability and the de-dollarisation trend. It was a good time to enter the market.

This year, however, I am shifting gears. I trust cash less and less every day, and electronic money feels ephemeral—just numbers on a screen. I want to hold physical assets.

My goal: £50,000 worth of gold by year-end.

To achieve this, I plan to:
- Save £500 per month specifically for gold
- Execute bulk purchases twice a year to avoid high markups
- Make a career move to increase my income and invest more aggressively. I also plan to move more of my cash into gold as a store of value.
Advice for Beginners: Break the Mental Ceiling

Start small. Buy a 1-gram bar. It costs around £140 or about ₦205,000 in Nigeria, depending on market prices.

Growing up, I only saw gold bars in movies, usually in bank vaults. I assumed they were for billionaires. Buying my first tiny bar shattered that ceiling. I looked at it and thought: “Oh, that’s it? I can do this.”

That first purchase changes how you think about money. It proves wealth is accessible. After that, depending on where you live and tax rules, you can upgrade to coins or bigger bars to maximise returns.

Bottom Line

In 2025, gold enjoyed its strongest year since the late 1970s, rising steadily by approximately 65% and reaching record highs. Its consistent gains show why it continues to be a trusted safe-haven asset, especially amid global economic uncertainty.

Read Next: I Make Up to ₦700,000/Week Trading Gold in the Forex Market — Here’s How I Do It

Follow Zikoko Money on Instagram for relatable stories and actionable insights to help you make the most out of your money.

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If the Nigerian government isn’t frustrating Nigerians one way, they’re disappointing them in another. The policies come thick and fast. Before you wrap your head around one, the next is already here and most likely worse than the last.

2025 has seen so many policies that have us suspecting the federal government actually doesn’t like Nigerians. Here are ten of the worst policies Tinubu gifted us this year.

Telecom price hike: Can you help me sub?

You might have forgotten, so we’re here to remind you that Nigerians actually started the year screaming, and it wasn’t for joy. Our New Year’s present from the Nigerian Communications Commission (NCC) was allowing telecommunication companies to increase their prices by 50%. This was announced on Monday, January 20, 2025.

The Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON) basically told the government they were drowning.

They said they desperately needed to hike prices because the cost of doing business in Nigeria had become too high. They also pointed out that their industry was the only one that had not increased prices since 2013.

According to the telcos, it was either that the prices went up, or the whole industry would collapse. They actually asked the NCC for a 100% increase, but the NCC managed to talk them down to 50%.

Still, this was very bad news for consumers. The Nigeria Labour Congress (NLC) even planned a nationwide protest to fight the hike. But after meeting with the federal government, the NLC called off the plans for the protest.

The hike is so bad, it has resulted in less internet usage for Nigerians as many have simply been priced out. In a country where less than half of the population has access to the internet, this is a big step back. If this is not a bad policy, we don’t know what is.

Shea nut ban: The shea stupidity of it all

On August 26, 2025, President Tinubu announced an immediate six-month ban on the exportation of shea nuts from Nigeria.

Nigeria is the largest producer of shea nuts in the world. We produce around 40% of the world’s supply. But we don’t have enough processing plants here, so we export the shea nut and import the more expensive finished product, shea butter.

The result is that even though we are the largest producer, we only make one per cent of the $6.5 billion global market.

Tinubu’s concerns were very valid, but as has apparently become customary, his solution was batshit crazy. His immediate ban on exports did not magically lead to Nigeria developing the processing plants. All it did was take away the livelihood of the hundreds of thousands of Nigerians, mostly women, who made their living through shea nut harvesting.

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Passport fees hike: If we double the price, will you double your hustle?

On September 1, 2025, Nigerians were greeted by the Nigeria Immigration Service (NIS) doubling the cost of the national passport. The cost of the 32-page passport, valid for five years, rose from ₦50,000 to ₦100,000. The 64-page passport, which offers a ten-year validity, was also doubled from ₦100,000 to ₦200,000.

The fact that the cheaper option still costs more than minimum wage shows how this government’s policies keep pricing Nigerians out of basic things. It is now a luxury to have a vital means of identification.

APIS $11.5 International flight security levy: Have you considered a road trip?

If you manage to afford the doubled passport price and somehow get a visa, the government is waiting for you at the airport. On December 1, 2025, the Nigeria Civil Aviation Authority (NCAA) introduced a new $11.5 Advanced Passenger Information System (APIS) levy.

Aviation stakeholders were very vocal in protesting the new tax. Alex Nwuba, President of the Aircraft Owners and Pilots Association of Nigeria, described the levy as “another blow” to a sector that was already gasping for air.

While APIS is a standard border security system globally, Nwuba pointed out a major difference: most countries actually absorb the cost themselves instead of passing the bill to the passengers.

According to Nwuba, Nigerian travellers are already being squeezed by a mountain of fees, including:
- 5% Value Added Tax (VAT)
- 5% Ticket Sales Charge
- Passenger Service Charge (PSC)
- Security and fuel surcharges
- Airport development levies and navigation fees
So adding the APIS fee makes flying so expensive we may start to see reduced tourism and business travel. Kingsley Nwokeoma, President of the Association of Foreign Airlines Representatives in Nigeria, echoed this frustration, pointing out that in many cases, Nigerians are paying more in taxes and fees than the actual airfare itself.

International flights in and out of Nigeria are already one of one of the most expensive in Africa at about $180 per ticket. And this new tax only made it worse.

New tax reforms: Widen the tax net

These come in the form of four new tax bills that will take effect from January 1, 2026. The four bills are the Nigeria Revenue Service Act, the Joint Revenue Board Act, the Nigeria Tax Act (NTA), and the Nigeria Tax Administration Act (NTAA).

Tax reform was one of Tinubu’s top priorities. Only two months after he was sworn in, he set up the Presidential Committee on Fiscal Policy and Tax Reforms in August 2023. The committee worked on the bills for a year before presenting them to the National Assembly in October 2024. Tinubu eventually signed the bills into law in June 2025.

The reform is meant to update Nigeria’s tax system to fit our present-day realities. That includes widening the tax net to cover informal industries that were previously difficult to tax. The Federal Inland Revenue Service (FIRS) will be renamed the Nigeria Revenue Service (NRS) and given more powers. The new laws also introduce a progressive tax system, which means the more you earn, the more you pay.

Naturally, Nigerians are very suspicious of the new laws. It is hard to see any tangible developments this government has achieved with the resources it already has. So, it is even harder to trust they will do any better with more taxpayer money.

But Taiwo Oyedele, the chairperson of the tax reform committee, has been on a media tour trying to reassure Nigerians. For example, he claims most Nigerians will not even pay tax because anyone making less than ₦800,000 a year is officially exempt.

Now, the reform bills are more controversial than ever after a member of the National Assembly claimed the version given to the public is actually different from the version the lawmakers read and passed.

Fuel 5% surcharge: Fueling our frustrations

Just when you thought the price of fuel could not get more depressing, the government started thinking about adding a 5 per cent surcharge on every litre.

The surcharge is technically not a new tax. It is included in the Federal Roads Maintenance Agency (Amendment) Act of 2007, but it has not been enforced until now. Including it in the Nigeria Tax Administration Act of 2025 is basically the government’s attempt to bring it back to life. They claim it is necessary to raise funds for transport infrastructure and green energy projects.

But Nigerians understandably hate the idea of fuel getting even more expensive and have been very vocal about it. The Joint Action Front (JAF), which represents pro-worker civil society organisations, has vowed to mobilise Nigerians against the surcharge if the government tries to implement it.

Even the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have said they will find it “very difficult to obey” if the tax is enforced. Billy Gillis-Harry, the National President of PETROAN, said that if the law is enforced, it could actually force their members to close down their businesses.

The surcharge won’t automatically start on January 1 like the other four tax bills. It needs an official order from the Minister of Finance to happen. But based on how this government has been moving so far, we are already bracing ourselves for the worst.

Tinted Glass Permits: Something for the boys

If the Nigeria Police Force fought crime as hard as they have fought to bring back tinted glass permits, Nigeria would be a much safer place.

Back in March 2022, the Nigeria Police Force (NPF) stopped issuing these permits and told officers to stop asking for them during traffic stops. This was a response to constant complaints from motorists about police harassment and extortion.

But by September 2023, just four months into Tinubu’s presidency, the police suddenly changed their minds and announced the permits were coming back. The NPF claims criminals use tinted windows to hide their activities, but with the government in full money-making mode, it feels more like a revenue drive.

At ₦14,200 per vehicle, the police stand to make billions from the millions of cars on our roads. They also seem very eager to seize cars; when enforcement started in October 2025, they impounded over 200 vehicles in just a few days.

The Nigerian Bar Association (NBA) is not having it. They’ve dragged the police to the Federal High Court in Abuja, calling the permit a violation of fundamental rights. Another lawyer, John Aikpokpo-Martins, also sued the police at a Federal High Court in Delta State.

This has led to a confusing “start-stop” drama. In October, after a meeting with the NBA, the Police put their plans to enforce the permits on hold.

But on Monday, December 15, 2025, the NPF suddenly announced that enforcement would resume on January 2, 2026.

Then on Wednesday, December 17, 2025, a High Court in Delta State officially ordered the police to stop the policy across the country until the case is finished.

The back-and-forth between the NBA and the police has been incredibly stressful and confusing for Nigerians. Right now, Nigerians do not know if they should pay for the permits or just wait. Hopefully, we get a final answer in the new year.

Free-on-Board 4% levy: You will like local brands

While the police are busy with tinted permits, the Nigeria Customs Service (NCS) is fighting to bring back a 4 per cent Free-on-Board (FOB) levy on imports. This levy is a 4% tax on the FOB value of goods, which was tucked into the Nigeria Customs Service Act of 2023.

To put it simply, the FOB value includes the cost of the item plus all the transport expenses incurred before it even arrives at a Nigerian port. Stakeholders in the import business have really been pushing back against the levy.

Car dealers claim this levy could as much as triple the cost of clearing a single vehicle with customs. Since these huge extra costs are passed straight to the consumer, it makes imported goods like cars a luxury that only the richest Nigerians can afford.

The Nigeria Employers’ Consultative Association (NECA) even estimates that this levy will add ₦2.84 trillion to total import costs, which basically means higher prices for everything, deeper poverty, and less investment.

The NCS tried to start collecting this tax at the beginning of the year, but paused after serious public backlash. However, in June 2025, the Senate hiked the Customs revenue target from ₦6.584 trillion to a whopping ₦10 trillion. With that much pressure to find money, the Service announced that the levy was coming back.

Manufacturers and importers begged for a delay until at least December 2025 to prepare themselves for the levy. Well, the year is almost over, and it looks like we will definitely be talking about this headache again in 2026.

New Education Curriculum: Teacher, don’t teach me nonsense

In September 2025, the Federal Government announced a newly revised curriculum for basic and senior secondary schools.

For a long time, people had criticised the old curriculum for being stale and out of touch with what students actually need. Because of this, the revision was initially welcome, especially since it brought History back to the classroom.

But this government is so talented at stressing Nigerians that it took a potentially good policy and turned it into a massive headache.

While the curriculum definitely needed an update, it is a delicate process that should not have been rushed. Unfortunately, that is exactly what the Ministry of Education did, and the result was total confusion for students, parents, schools, and exam bodies.

In November, everyone was shocked to find out that current Senior Secondary School 3 (SS3) students would have to write exams on these new subjects for the West African Examinations Council (WAEC) in 2026. This is after these students had already spent the last three years of their lives studying a completely different set of subjects under the old system.

Fortunately, the Senate has stepped in to try and stop this disaster. On December 9, 2025, Senator Sunday Karimi moved a motion to summon the Minister of Education, Dr Tunji Alausa, and the Head of the National Office of WAEC, Amos Dangut, to explain what was going on. Karimi warned that if nothing was done, the country would be looking at a “mass failure.”

Supporting the motion, Senator Adams Oshiomhole said the move looked like the usual habit of Nigerian policymakers rushing to implement ideas without doing the groundwork. He pointed out that we cannot just wake up, think of an idea, and start implementing it immediately. In his words, “We should not plan in a way that will embarrass us as a nation.”

The Senate President, Godswill Akpabio, asked the Senate Committee on Basic and Secondary Education to meet with the Minister and report back in two weeks.

We are honestly amazed at how the federal government could badly botch a good policy and create so much stress out of something that should have earned them praises.

The 2025 Budget is the biggest ever: Where una dey see this money?

On Thursday, February 13, 2025, the National Assembly approved the 2025 budget.

Initially, a ₦49.7 trillion budget was proposed. But Tinubu said he’d done the maths and based on revenue projections from government agencies, Nigeria could afford a ₦54.99 trillion budget. It is the biggest we’ve ever had and is almost double the 2024 budget of ₦27.5 trillion.

By July, the International Monetary Fund (IMF) was already warning Tinubu that he had miscalculated his revenue and needed to revise the budget. Crude oil wasn’t selling at the price the government had planned on, so we couldn’t afford our extremely large budget.

This particular policy might be the worst one because it basically inspired a bunch of taxation policies and fee hikes that have really hurt Nigerians this year and will continue to do so in 2026.

Let the poor breathe

Nigeria is a poor country. That is just the fact. The majority of the population lives in multidimensional poverty. So asking for the poor to breathe is to ask for Nigerians to breathe, and for Nigeria as a country to breathe. Policies that hurt the poor hurt the majority of Nigerians and choke Nigeria as a whole.

When Tinubu spoke those words, “let the poor breathe,” one would have thought he understood this. But 2025 has shown he doesn’t. Policies that dip the government’s hands into the pockets of a poor population and take what little they have are anti-people.

Endless taxes, hiking consumer services, banning the source of people’s livelihoods before creating alternatives, and releasing convicted criminals while insecurity is rampant are anti-Nigerian policies. Will 2026 be any better?

If there’s one thing we’ve learned in 2025, it’s that this government really doesn’t like Nigerians.

Before you go, help us understand how you and other young people feel about the 2027 general elections by taking this 10-minute survey.

Ever had a moment where Nigeria’s systems made life harder—or unexpectedly easier? We want to hear about your personal experiences that reflect how politics or public systems affect daily life in Nigeria. Share your story with us here—we’d love to hear from you!

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With just over three months left in the year, some of us are already looking ahead to 2026. New year, new us—and thanks to Tinubu, new tax laws too.

There has been plenty of talk about the tax reforms Tinubu signed into law on June 26, 2025, which will come into effect from January 1, 2026. But what do they really mean? Will we pay less tax? More tax? How much exactly? And what about our crypto wallets?

Death and Tinubu’s Taxes

Back in 1789, Benjamin Franklin said, “In this world nothing can be said to be certain, except death and taxes.” Tinubu seems to agree. His famous “let’s widen the tax net” speech made clear from the start that taxation would be central to his presidency.

Barely two months after his swearing-in, Tinubu set up the Presidential Committee on Fiscal Policy and Tax Reforms in August 2023. The committee, led by Taiwo Oyedele (former Fiscal Policy Partner and Africa Tax Leader at PwC), was tasked with restructuring Nigeria’s tax system.

A year later, in October 2024, the committee presented four tax bills to the National Assembly. The National Economic Council (NEC), chaired by Vice President Shettima, advised that the bills be withdrawn for further consultation. But Tinubu said no.

By June 2025, the National Assembly had passed the bills, and Tinubu signed them into law on June 26.

But are the tax reforms actually a good thing?

We spoke to Financial Education Instructor, Kalu Aja, to hear what an expert thinks.

According to him, Nigeria’s tax laws have been overdue for an update. “The current tax laws are outdated,” he said.

He explained that the new laws encourage people to invest in health insurance and retirement savings, which is a positive step. They also widen the tax net and could help increase Nigeria’s tax-to-GDP ratio which is a sign of a healthier economy.

The Four Horsemen of the Taxpocalypse

So, what are these four tax reform bills?

The government is not just trying to raise or lower taxes. It wants to simplify the whole process, for itself and for us.

In 2023, Oyedele had recommended reducing the more than 200 overlapping taxes Nigerian businesses faced to just ten. The new laws are meant to make things easier to understand.

The four bills are:
- Nigeria Revenue Service Act
- Joint Revenue Board Act
- Nigeria Tax Act (NTA)
- Nigeria Tax Administration Act (NTAA)
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The tax collector got a power boost

The Nigeria Revenue Service Act changes the name of the Federal Inland Revenue Service (FIRS) to Nigeria Revenue Service (NRS). The idea is to show that the service collects money for the whole Federation, not just the Federal Government.

The act also gives the service more powers. For example, it no longer needs to rely on law enforcement to carry out investigations. So yes, the FIRS got a new name and a bit more muscle.

What if I fight with my tax collector?

The Joint Revenue Board Act is meant to improve coordination between federal, state, and local governments. It sets up:
- The Joint Revenue Board
- The Tax Appeal Tribunal (TAT) – to handle disputes.
- The Office of the Tax Ombud – to investigate taxpayer complaints.
So if you have a tax problem, this law tells you where to go.

One Tax Law to Rule Them All

The Nigeria Tax Act (NTA) creates a single legal framework for taxation. It replaces many older laws and puts everything in one document.

It also sets tax rates for individuals based on income, ranging from 0% to 25% depending on income.

Pay your tax or else…

The Nigeria Tax Administration Act (NTAA) sets common rules for how taxes are collected. It makes tax registration mandatory for anyone earning income, introduces universal Tax Identification Number (TIN), and grants authorities more power, including the ability to seize assets from defaulters.

Taxes kwa? How much am I making?

The new laws apply to both individuals and businesses. Micro, small, and medium-sized enterprises (annual turnovers below ₦50 million and assets under ₦250 million) are exempt. So if you are a big-time CEO, maybe stop reading Zikoko and call your tax lawyer.

For individuals, the tax rates are as follows:
- 0% for the first ₦800,000
- 15% for the next ₦2,200,000
- 18% for the next ₦9,000,000
- 21% for the next ₦13,000,000
- 23% for the next ₦25,000,000
- 25% for everything above ₦50,000,000
But will we be paying more tax?

According to Financial Education Instructor, Kalu Aja, the answer is, “It depends.”

Under the new tax laws, the more you spend on things like insurance and pension contributions, the less tax you pay.

“From my calculations, if you choose not to buy any insurance or pension plan, you will pay more under the new law if you earn ₦19 million or more a year,” he said.

So, for higher earners, skipping those deductions could mean handing more money over to the tax man.

Old versus New

The government has been advertising the new tax laws as being favourable to lower income earners. The 20 per cent rent relief and people earning less than ₦800,000 will pay no tax strengthen their case.

The government even has a calculator you can use to compare your tax under the old and new laws.

Here is an example we have created:

John earns ₦100,000 per month, which is ₦1,200,000 per year. He spends a third of his income on rent, which is ₦400,000. His 20 per cent rent relief is ₦80,000.

Apart from the rent relief, the new law allows for the following deductions:
- Contributions under the National Housing Fund (NHF)
- Contributions under the National Health Insurance Scheme (NHIS)
- Contributions under the Pension Reform Act
- Interest on loans for developing an owner-occupied residential house
- Premium of life insurance for the person or their spouse
The NHF contribution is 2.5 per cent of annual income. For John, that is ₦30,000 per month. The NHIS contribution is 10 per cent of income, which is ₦120,000 for John. The Pension Reform Act of 2014 mandates an 8 per cent contribution, which is ₦96,000 for John. If John is not developing a house, he has a life insurance premium of ₦100,000 per year.

That brings his total deductions to ₦426,000. So his taxable income remains ₦774,000. This is under ₦800,000, so John pays no tax.

According to the calculator, he would have paid ₦41,152 annual tax under the old law.

It is easy to see these deductions driving growth in the insurance and pensions industries.

What is the catch?

But widening the tax net means more people must now comply. Informal businesses, traders, and freelancers will need the TINs.

Every bank credit alert could be scrutinised. If your uncle sends you money, you will need proof that it is a gift, not a business income.

Digital assets such as crypto and NFTs are also now taxable. If you make money from selling them, you owe tax.

Should I be worried?

So earlier, we said the reforms are meant to make things easier for everyone to understand. While that is mostly true, there are still a lot of moving parts.

For instance, the impact of the new taxes on businesses may not be felt until the laws come into effect next year. When they do, they might pass the cost on to customers. If you do not pay tax directly, you might pay more at the counter.

Also, the law revives a very controversial five per cent surcharge on fossil fuels, which analysts fear could further worsen inflation.

Kalu Aja told us, “Taxes do not make goods cheaper or more expensive.”

According to him, when the government collects taxes from businesses, it is expected to reinvest that money into improving the ease of doing business—things like energy, security, and transport infrastructure.

But when the government takes those taxes and fails to invest, it ends up hurting the businesses. “They pay a double tax,” he said, “the formal tax to the government, then an informal tax in the form of losses caused by bad roads and insecurity.”

So, whether the new tax laws lead to higher prices depends on one key thing: “how well the government spends the money to boost productivity across Nigeria.”

What I ordered versus what I got

Nigeria’s challenge has never been collecting taxes; it is how the taxes are used.

Countries like South Korea (tax rates 6–45%) and Canada (14.5–33%) use similar progressive systems, but they deliver reliable healthcare, safer transport, and better infrastructure. But here is the difference—South Korea and Canada rank second and fourth globally for the quality of their healthcare systems. Nigeria sits at 84th out of 110 countries.

Our healthcare system is underfunded. Doctors and nurses are leaving in record numbers, and those who stay are overworked, underpaid, and prone to strikes.

Transport is not much better. Nigeria’s system is not only inefficient but unsafe. We have reported that both rail and boat travel are prone to accidents. Our roads are just as dangerous. Nigeria records around 21.1 road accident deaths per 100,000 people each year. Compare that to Canada’s 5.6 and South Korea’s 9.4. The global average is 16.8.

We also have fewer roadways and railways per person than both countries, which shows how weak our transport infrastructure really is.

And then there is security. Nigeria faces ongoing threats from terrorist groups, kidnappers, and bandits. We rank 148 out of 163 countries on the World Peace Index. Meanwhile, the Chief of Defence Staff has advised citizens to learn karate for self-defence.

So let us recap: poor healthcare, unsafe and unreliable transport, and we are one of the most dangerous places to live in the world.

What exactly has the government been doing with the taxes it has collected all this time? And more importantly, what will change with the new ones?

This new tax will favour me and my family

Ultimately, the goal of taxation is to raise revenue that the government can use to improve everyone’s living standards. Unfortunately, the Nigerian government does not inspire confidence in that regard.

The Tinubu administration scrapped fuel subsidies but has yet to show where the savings went. The World Bank reported that the Nigerian National Petroleum Company Limited (NNPCL) remits only half of the subsidy savings.

Worse, the government has stopped publishing quarterly budget reports, despite being legally required. A government that has not earned public trust is now demanding more from taxpayers.

Franklin was right: taxes are inevitable. But so is the demand for accountability.

What we can do is choose better leaders and be more active in holding them accountable.

Further Reading

I hate to give homework, but this time it might be worth it. The new laws expect more effort from taxpayers.

Make sure you have your TIN if you are a “taxable person.” Keep records of all money you receive. Know what deductions you can claim. And keep proof of any money that should not count as income. Yes, I mean those shameless begging screenshots.

Taiwo Oyedele, chair of the Tax Reforms Committee, has shared FAQs on X. Kalu Aja’s explanation includes useful scenarios to clarify how the taxes will work for individuals, businesses and digital assets. You can also access the Nigeria Tax Act and the Tax Administration Act online here and here, respectively.

Talk to us here. If you have had any experience when Nigeria’s systems made life harder or unexpectedly easier, we want to hear about it.

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When rich Nigerians are not showing off high fashion at social gatherings, they are busy dodging taxes like a creepy ex – quote the data, not me.

Oxfam, an NGO that addresses poverty and inequality in Nigeria, recently released a report that shows how people who earn about ₦40 million a year have been getting away with not paying taxes. Of the 130,000 high-earning Nigerians that fall into this category, only 40 were recognised as regular taxpayers.

If you’re wondering how these rich Nigerians have been able to get away with this questionable action for so long, it’s because “they pay tax only on their salaries, which is just a fraction of their income, then hide the rest.”

Why is this bad?

Nigeria is suffering a serious inequality crisis which is being worsened by things like tax evasion by the rich and aggressive taxation on the poor. To put this into perspective, 32.5% of the country’s wealth is controlled by just 10% of the population, while the remaining 90% of the population shares what’s left of it. When you do the maths, you will also find that poor people are taxed more than the rich. The danger in this is that “if you’re born into poverty, you’re likely to stay poor.”

But it’s not just the lack of opportunities that’s stopping average Nigerians from building generational wealth or at least affording three-square meals; the taxing system the Nigerian government has implemented is another weapon against the poor.

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For example, the Value-Added Tax (VAT) was increased from 5% to 7.5% and is likely to be increased to 10% in January 2025. To rich Nigerians, VAT is just a random tax that they only notice at fine-dining restaurants, but to low-income households, it’s a crushing burden.

How is this affecting Nigeria’s economy?

Taxes currently make up only 6% of Nigeria’s Gross Domestic Product (GDP), but according to the Workbank, the recommended percentage should be 15% or higher.

Tax evasion by Nigeria’s rich is one of the major reasons the country is not able to generate what it should in tax revenue. Is this bad for the economy? Absolutely yes, and this is why—the country is not generating half of what is needed to support the growth of its economy.

What can be done about it?

Besides asking the Nigerian government to hold rich Nigerians accountable and let the poor breathe, Oxfam has some brilliant recommendations that the government can implement to stop rich people from evading taxes.

Create a special tax unit for the rich

One major suggestion is the creation of a special unit within the Federal Inland Revenue Service (FIRS) on high-net-worth individuals (HNWIs). This unit would conduct thorough audits, use data from multiple sources to track assets and train tax officials to better understand the complicated financial dealings of wealthy Nigerians.

Monitor rich people’s earnings and tax them accordingly

Another key recommendation is the introduction of a progressive wealth tax. Oxfam proposes that Nigerians

This is a taxation system where a person’s tax rate increases with their wealth. In Nigeria’s case, Oxfam is suggesting that people who own wealth between $1 million and $5 million should be taxed at 1%, those with over $5 million should be taxed at 2%, and those worth more than $50 million should be taxed at over 5%.

If this recommendation is implemented, it would help reduce the concentration of wealth in the hands of the rich and generate significant revenue for poverty alleviation and social services.

Follow the footsteps of other African countries

Oxfam also wants Nigeria to raise its Capital Gains Tax (CGT), to match that of other African countries.

CGT is a specific type of tax charged on any profit made from the sale of things like stocks and shares, real estate, and investments. Currently, Nigeria charges a 10% tax on these things while other African nations like South Africa and Kenya, charge about 15% to 35%. This would close tax loopholes and ensure that financial assets and intangible properties are taxed correctly.

Stop over-taxing the poor

The NGO also recommends that the government stop taxing essential items like food and housing Value Added Tax (VAT). Instead of burdening the poor with VAT, they suggest that it be put on luxury items like private jets and yachts and every other item that only rich people can afford instead.

In addition, they want the government to exclude Nigerians earning the minimum wage or below from paying personal income taxes while introducing higher tax brackets for the wealthiest individuals. For instance, a 40% tax rate could apply to those earning above ₦100 million annually, with the rate increasing to 47% for those earning above ₦230 million.

Oxfam also suggests bringing back inheritance taxes and strengthening gift taxes. This way, wealthy people who pass on money or give large gifts would be taxed fairly, while average Nigerians would be exempt.

Stop rich people from cheating

They also stressed the need for Nigeria to renegotiate its Double Taxation Agreements (DTAs). Right now, these agreements allow wealthy individuals and big companies to find loopholes and avoid paying the taxes they should. If the rules were tightened, the rich would no longer be able to avoid paying these taxes.

I don’t expect things to change overnight, but with these recommendations, Nigeria will be well on its way to closing the insane gap between the rich and the poor.

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The federal government has been going hard on tax reforms since October. With controversial taxes like the proposed increase in the Value Added Tax (VAT) we pay on things like food and electricity, nobody knows what to expect from the Tinubu-led administration these days.

For many reasons, the new telecom tax seems to be the most controversial of all the tax reforms I’ve written about this month.

What’s happening?

To the long-distance lovers who depend on voice and video calls to keep the spark alive and the remote workers who are already spending more than they should on data subscriptions, I’ll hold your hands gently while I tell you what the Tinubu-led administration has been up to lately.

The Federal Government wants to put a 5% tax on telecom services, meaning we’ll soon be paying more just to make calls and browse the internet. The bill has a weird long name (“A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters,”) and proposes an annoying increase in the cost of telecom services that over 215 million Nigerians use every day.

Here’s the craziest part- this bill doesn’t just target telecom services; it’s also going to introduce taxes on gaming, gambling, lotteries, and betting.

Why is this a problem?

Nigeria’s telecom sector already pays more than 50 different taxes to various government bodies –This is one of the main reasons why the cost of data has been on the rise recently. If they pay an additional tax like this bill wants them to, whatever increase you’ve noticed before will rise even higher.

If you add this to the proposed VAT increase (that could make food, electricity, shelter, and everything more expensive), you find that Nigerians already have many battles to fight.

What’s more? The World Bank recently announced that about 63% of Nigerian citizens are now poor, with most surviving on less than $2.15 daily. If there was ever a perfect time to come up with a tax like this, it’s not 2024.

Why is the government proposing this tax?

The government’s new tax reforms are part of a larger plan to make more money from non-oil sources. Since telecoms and betting are thriving industries, the government is taxing these companies (who will start charging Nigerians more as a result of these taxes) to boost the country’s revenue. This wouldn’t be such a bad thing if the government’s strategy was not so counterproductive. Indirectly taxing poor citizens to pour more money into the country’s economy is a questionable strategy, especially when President Tinubu’s previous reforms have not lived up to his promises. For a country that has a long and consistent history of corruption and funds misappropriation, this isn’t the smartest move.

What can you do?

Thankfully, there’s a chance that the proposed tax will not see the light of the day. Since telecom companies are affected too, they are fighting against the tax on behalf of Nigerians. This isn’t the first time the government is proposing this tax. They proposed it in August 2022 under the administration of former president Muhammadu Buhari, but telecom companies and Nigerians kicked against it till it was suspended in 2023,

The National Association of Telecoms Subscribers, who had taken the government to court over the tax before it was suspended in 2023, is getting ready to go to court again until the government withdraws the proposed tax.

It’s important to start and join in conversations surrounding controversial bills like this that affect all of us. Sharing this article is a great way to let other people know what is going on and keep the conversation going until the government withdraws the tax.
The one thing we might need to get used to quickly with this new administration is the endless billing.

Last week, we discussed the newly introduced annual vehicle ownership verification fee, set at ₦1,000. For today, we’ll be looking into the recent partnership between the Federal Inland Revenue Service (FIRS) and the Market Traders Association of Nigeria (MATAN) to collect Value Added Tax (VAT) from traders.

On July 3, 2023, the FIRS announced the VAT Direct Initiative to facilitate collecting and remittance taxes from this informal sector using unified systems technology, and traders will also be given identity cards to track their turnover. Nigeria currently has one of the lowest tax collection rates in the world at 10.8%; according to MATAN, there are about 40 million traders across the country, and this tax collection would help improve our tax base. Traders will also benefit from this, as the FIRS plans to work with security agencies to stop the illegal collection of taxes in the markets by thugs and self-appointed tax collectors.

Lagos thugs when they hear this

This is all part of President Bola “T-Baby” Tinubu’s plan to improve our revenue generation and fund more infrastructural and social projects. However, we all know that Nigeria is cursed with a corruption problem. So, once again, it looks like citizens struggling to make ends meet are being asked to make sacrifices with little to no assurance of tangible rewards.

What else happened this week?

Diphtheria Outbreak in Abuja

On July 3, 2023, Sadiq Abdulrahman, the director of the Federal Capital Territory (FCT) Public Health Department, confirmed in a press briefing that the outbreak of diphtheria has already claimed the life of a four-year-old boy.

Diphtheria is a deadly bacterial infection that affects the mucous membranes of the nose and throat. It can lead to breathing difficulties, health rhythm problems, heart, kidney, and nervous system damage, and death, especially in children.

The recent outbreak in Abuja is said to have spread from Niger state, and so far, there have been eight reported cases. To combat the spread of this bacterial infection, residents are advised to take personal hygiene very seriously and to get vaccinated at any of the 400 vaccine outlets around the FCT. Also, the Public Health Department has started collaborating with states to prevent the further spread of this disease.

Video of the week

In 60 seconds, learn about how JAMB banned Mmesoma Ejikeme from taking JAMB for the next three years.

JAMB is saying that her proclaimed result is a "fake". She is saying it isn’t. Here’s the update and why DSS is now involved.

follow us now to get the full story as it unfolds. pic.twitter.com/E6LYw4ll2R
— Citizen by Zikoko (@ZikokoCitizen) July 4, 2023

Question of the week

With Elon Musk channelling his inner Lex Luthor, our days on Twitter might be numbered. Is it time for Nigeria’s tech space to create an alternative social media platform?

Ehen one more thing…

The initial six months of 2023 are done and dusted. What should we expect as we step into the second half? Find out here

To ensure you don’t miss out on the next edition of Game of Votes, subscribe to the newsletter here.
Vol 10 | 26-12-2022

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Merry Christmas (in arrears),

I hope you had a great weekend and are currently enjoying a slow Monday.

In other news, the new year is only a few days away. I know we all roll our eyes at new year’s resolutions but one thing I definitely want to get better at is tracking my expenses. I can’t wait to share any tips and learnings as I go along.

This is the last edition of the Money by Zikoko newsletter and I really appreciate your opening, reading, and sharing.

This week we have handpicked some really great Naira Life stories from this year that we think you really need to read. I enjoyed them and I hope you do too.

In this letter:

#NairaLife: Most-Read stories of 2022

#LoveCurrency: Dating in Abuja on a ₦700k Influencer Monthly Income

Money Meanings: “Tax”
#NairaLife: You Should Read These Stories

Last week we showed you all the stories you loved from the year. Now we are bringing you the ones you will love – you just don’t know it yet.

Our compilation takes into account the types of stories and what you should expect from them. We try our best to explain why the stories made our list.

Read The Stories Here

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#LoveCurrency: Dating in Abuja on a ₦700k Influencer Monthly Income

After COVID, Julia* quit her insurance job to focus on being a food blogger. In this article, she tells us how her boyfriend influenced her decision, going from earning ₦30k to ₦700k monthly and her plan to be financially independent.

When asked about their plans as a couple, she says: “I don’t know as a couple — I feel like anybody can still serve you breakfast, so I’m trying to focus on my own plans. “

This story was brought to you by Fluid Finance

Read This Article

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In the
meantime, keep reading Zikoko’s articles and be sure to share the love.

Till next week…

Yours cashly,

Dwin,

Mr Money With The Vibe (Sometimes)

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Nigeria
2022 will be a memorable one for many Nigerians even if they’re trying to forget. We saw the price of items double, our naira had a makeover, our national grid died and resurrected more than a few times, schoolchildren will now be taught in their native languages, and Meffy rolled out new cash withdrawal restrictions as a Christmas gift.

But to end the year with a bang, the federal government is proposing adding a 20% tax on non-alcoholic beverages.

What does this mean for Nigerians?

Because soft drinks make up the bulk of non-alcoholic beverages, if the 20% tax is implemented, there’d most likely be an increase in the prices of these drinks soon. However, this isn’t the first time the government is taxing the soft drinks industry.

What happened before?

Earlier this year, there was an increase in the prices of some drinks — a bottle of Coke sold formerly for ₦200 became ₦250. Unknown to many of us, this increase was because of the ₦10 per litre tax the federal government placed on Sugar-Sweetened Beverages (SSB).

What’s their reason?

Statistics show that nearly 40 million litres of soft drinks are sold annually in Nigeria, the fourth highest in the world. This puts many consumers at risk of diseases like stroke, heart disease and type 2 diabetes. So, the government imposed the ₦10 per litre tax to reduce our consumption of these beverages. The extra revenue from the tax is channelled towards treating sugar-related diseases.

What happens now?

Beyond the price hike, if the 20% tax is implemented, there are other possible side effects.

People will lose their jobs

Since the ₦10 per litre tax has been added, many beverage companies have found it challenging to make a profit. A study showed that there had been an 8% decrease in revenue between July and August this year, and this decline is expected to reach 25% by December.

If the 20% tax is further implemented, revenue figures could be further affected and would eventually lead to the loss of jobs.

We’ll scare off foreign investors

During a stakeholders’ meeting discussing the effects of the proposed government tax on December 6, 2022, it was noted that the tax discouraged one of the bottling companies from proceeding with its £300 million investment plan. And if the tax is finally implemented, we can expect more stories like this.

The government’s plan to help reduce the consumption of carbonated soft drinks isn’t bad. Still, they must try to strike a balance instead of frustrating manufacturers and increasing our already high cost of living.
If there’s one thing the Buhari government knows how to do, it’s to keep taking without giving enough back. That’s exactly how he’s driven Nigeria’s debt profile from ₦12.1 trillion in 2015 to ₦41.6 trillion in 2022.

For his next trick, he’s raising taxes on the telecommunications industry that’s going to make life a bit harder for everyone.

How’s he gonna do it?

The Minister of Finance Budget and National Planning, Zainab Ahmed, announced on August 4th 2022 that a 5% inclusive excise duty is about to fall on telecom services in Nigeria.

This tax didn’t just come out of nowhere. In fact, it’s in the Finance Act of 2020 but remained dormant like a tumour just cooking to fuck up your life when you least expect it.

Ultimately, the decision to fix the rate on excise duties was on President Always Take, and he’d been taking his time to do that, until now.

Why’s Buhari doing this?

The truth is Nigeria is broke. The country’s income isn’t even enough to take care of settling its debt, not to talk of other things you need money to run.

Like TGIF

And since Nigeria’s oil revenue isn’t vomiting nearly enough money, the government is looking into non-oil sectors to pull their weight. That’s why the president is turning to the telecom sector to squeeze some more revenue out of it for the government to spend.

ALSO READ: What Nigeria Can Learn from Kenya About Cutting Politicians’ Salaries

But how does this affect your pocket?

When the government announced the imminent implementation of the additional 5% tax, operators didn’t waste any time in passing it on to their customers. The Chairman of the Association of Licensed Telecom Owners of Nigeria (ALTON), Gbenga Adebayo, said operators already pay too many taxes to the government and can’t shoulder another one. And what’s even crazier is that this tax is rare in a sector like telecom.

Excise duties are indirect taxes placed on the manufacture of non-essential, potentially harmful products like alcohol and tobacco. You can call it a “sin tax” in the sense that it exists to discourage the consumption of such products.

YOLO

But in this case, Buhari has extended the sin tax to something as essential as talking to your family and friends as this will affect the prices of things like recharge cards and vouchers. Why would he do this? Maybe because he hates your enjoyment. Or he needs all the revenue he can get to send more exotic cars across the border to his first cousins in Niger Republic.

Is anyone fighting this?

Telecom operators aren’t happy about the excise duty, but they’re passing the burden of it to their customers like it’s an STD, so it may be naive to expect them to put up a spirited fight. But someone else has offered to do that.

Resident terrorist sympathiser who’s also the Minister of Communications and Digital Economy, Isa Pantami, is a surprise objector to the tax.

The minister said more taxes on the telecom sector makes no sense as it’s already one of the government’s hottest honeypots.

Pantami feels so strongly about the tax that he’s vowed to fight it by any means necessary so it doesn’t destroy the digital economy sector.

What’s the damage here?

Only a handful of countries place excise duty on telecom services. And the danger is that consumption levels may drop because Nigerians are already seeing shege with the state of the economy. If demand drops, the revenue generated from the telecom sector may start to shrink and ultimately worsen Nigeria’s revenue headache.

Right now, it’s still unclear when full implementation of the excise tax will commence, but if it does, communication is about to get more expensive for you.

ALSO READ: Buhari Is Using Exotic Cars to Fight Insecurity in Niger Republic