Nigeria’s tax landscape is moving through a pivotal inflection point. Since the administration launched its ambitious fiscal reform package in 2023, the policy drumbeat has steadily tightened around higher revenue mobilisation, reduced leakages, and a friendlier investment climate. Two years in, headline results are beginning to validate the strategy: federal revenue for January–April 2025 printed at ₦6.9 trillion, a 40 per cent year-on-year surge, according to the Ministry of Finance.
This week, there has been a cluster of interconnected announcements that, taken together, signal the next phase of execution. They revolve around five cross-cutting themes: alternative dispute resolution (ADR) for tax, compliance facilitation, infrastructure-linked levies, sub-national coordination, and digital enablement. Each theme feeds into the central policy objective of building a sustainable, technology-driven tax system capable of financing Nigeria’s development aspirations without stifling growth.
Major Developments Analysis
1. Twin Roundtables Map a National ADR Framework
Leadership Newspapers reported plans for a “Roundtable to Build Roadmap for Tax ADR in Nigeria” scheduled for 25–26 June 2025 in Abuja, while a parallel announcement from P.M. EXPRESS detailed the programme agenda and partnerships with FIRS and the UK’s HMRC. The events aim to translate the recently approved National ADR Policy into a practical mechanism for resolving tax disputes.
Why it matters:
- FIRS’ current dispute backlog exceeds 12,000 cases, tying up roughly ₦1 trillion in potential revenue and discouraging foreign investors who fear protracted litigation.
- ADR could reduce the average settlement cycle from the current 5–7 years to under 12 months, freeing cash flow for both taxpayers and the Treasury.
- By engaging HMRC, the roundtable signals a willingness to benchmark global best practice, increasing credibility in the eyes of development partners.
Implications:
• Multinationals with complex transfer-pricing profiles stand to benefit most from predictable resolution timelines.
• Smaller firms gain from lower legal costs, promoting voluntary disclosure.
• FIRS will need to build specialist mediation capacity and revise sections of the Federal Inland Revenue Service (Establishment) Act to recognise ADR outcomes as binding.
2. CITN Urges States to Dismantle Illegal Roadblocks
The Chartered Institute of Taxation of Nigeria (CITN) pressed state governments to enforce the Nigeria Governors’ Forum (NGF) directive eliminating illegal roadblocks and harmonising agricultural produce levies, according to The Guardian.
Why it matters:
- Unauthorised checkpoints reportedly add between 10 % and 25 % to farm-gate prices, exacerbating food inflation now running at 36 %.
- Fragmented levies erode value-chain margins and create uncertainty for agribusiness investors.
- The NGF directive dovetails with the president’s emergency food security plan, making enforcement a litmus test of federal-state alignment.
Implications:
• Agro-processors should see improved inbound logistics if states comply, lowering cost-of-goods-sold.
• State IRS departments risk revenue loss in the short term; however, harmonised levies could broaden the base and stabilise collections.
• CITN’s call on the Joint Tax Board (JTB) to liaise with the Inspector-General of Police underscores the need for cross-agency collaboration to police rogue actors.
3. Accountability Questions for the New Nigeria Revenue Service (NRS)
In a pointed op-ed, Premium Times analyst Edidiong Bassey asked “who will hold the new NRS accountable?” under ongoing consolidation of revenue functions. See Premium Times.
Key arguments:
• Centralising tax and customs under the NRS promises efficiency but risks concentrating power without adequate oversight.
• The NRS board remains under-staffed and the legal framework for parliamentary review is still pending.
• Transparency hinges on publishing real-time collection data and audit outcomes.
Implications:
• Businesses may enjoy streamlined filing but need assurance that dispute resolution will remain independent.
• Donor agencies tying budget support to governance metrics will monitor establishment of checks and balances.
4. SEREC Pushes for Taxes on Unreturned Containers
Maritime think-tank SEREC proposed a demurrage-style tax on empty containers clogging Nigerian ports, arguing it aligns with global practice, as reported by the News Agency of Nigeria.
Why it matters:
- Lagos and Onne ports suffer up to 25 % capacity loss to abandoned boxes, inflating dwell times and logistics costs.
- Benchmarking Germany, the UK and the US, SEREC estimates potential annual revenue of ₦120 billion.
- The proposal dovetails with the Blue Economy ministry’s port modernisation drive.
Implications:
• Shipping lines could face higher operating costs but will expedite box repatriation, freeing capacity.
• Exporters may benefit from reduced port congestion if designed carefully to avoid double-taxing.
• Drafting authority must clarify whether the levy is an excise, environmental fee, or indirect tax to avoid litigation.
5. AI-Powered MyTax Nigeria Platform Goes Live
We got featured in The Nation - Digital transformation received a boost with the launch of MyTax Nigeria, an AI-driven portal offering registration, planning and compliance tools.
Strategic value:
• Nigeria’s tax-to-GDP ratio sits at 8.5 %, trailing the 15 % ECOWAS benchmark partly due to low literacy; automated guidance could widen the base.
• The platform complements FIRS’ TaxPro-Max but targets individuals and SMEs often overlooked in enterprise-grade tools.
Implications:
• Tax advisors may pivot toward higher-value consulting as routine tasks become self-service.
6. Naira-for-Crude Policy: Fiscal and Tax Nuances
Pulse Nigeria analysed the government’s naira-for-crude swap designed to spur domestic refining capacity. See Pulse.
Fiscal angle:
• The policy could reduce the ₦3 trillion annual subsidy on imported refined products by incentivising in-country conversion.
• Tax analysts argue for an accompanying excise relief scheme on early-stage modular refiners to ensure competitiveness.
Implications:
• Petroleum sector taxpayers must model VAT exposure on swap transactions, as value creation will now occur onshore.
• FIRS may need to issue a Public Notice clarifying withholding tax on crude-for-services arrangements.
7. FIRS Pushes Beyond Audits Toward Voluntary Compliance
MSN reported FIRS’ strategic pivot from audit-centric enforcement to behavioural nudges and taxpayer education. See MSN.
Highlights:
• New compliance dashboard segments taxpayers by risk, sending personalised reminders.
• FIRS will pilot a tax-points reward scheme, crediting compliant SMEs with priority access to government tenders.
• The Service targets a 20 % reduction in audit cases by 2027, reallocating staff to data analytics.
Implications:
• Taxpayers with clean histories may face fewer intrusive audits.
• However, data-driven profiling increases detection risk for under-declarations, making internal controls paramount.
8. Corporate Rush to File Returns Lifts June Collections
The Nation noted a spike in corporate filings ahead of the 30 June deadline, echoing revenue figures released a day earlier here.
Key numbers:
• Four-month collections: ₦6.9 trillion (+40 % YoY).
• Projected June uplift: additional ₦950 billion, half from Company Income Tax (CIT), one-third from VAT.
Drivers:
- Integration of e-invoicing with TaxPro-Max has cut filing time by 30 %.
- Introduction of late-filing penalties linked to turnover rather than flat fees creates stronger compliance incentives.
Implications:
• Short-term liquidity squeeze for firms; treasury managers should align cash-flow forecasts.
• Market analysts view the trend as positive for sovereign credit metrics, reducing reliance on domestic borrowing.
Market Analysis and Sector Impact
Agriculture: Removal of illegal levies could drop logistics costs by up to ₦25,000 per tonne, improving margins and possibly tempering food inflation. Seed and fertiliser suppliers may witness volume upticks as farmers reinvest savings.
Maritime & Logistics: A container tax, if implemented, will likely reshape pricing models for shipping lines. Ancillary services—tug operators, off-dock depots—could gain throughput efficiencies.
Oil & Gas: The naira-for-crude framework intersects with tax policy at multiple points—Customs duties on imported equipment, VAT on refined output, and potential tax holidays for modular refiners. Fiscal clarity will be decisive for investors evaluating green-field projects.
Technology & Professional Services: Digital tools like MyTax will expand addressable markets for fintechs providing embedded payroll and accounting solutions. Tax advisory firms should anticipate commoditisation of simple compliance tasks and reposition accordingly.
Public Finances: Accelerated collections and dispute resolution promise to smooth cash-flow volatility, enabling more predictable budget execution. Improved fiscal metrics could compress sovereign bond spreads, easing debt-service pressures.
SMEs: Simplified filing, ADR access, and reduced audit risk collectively lower the cost of formality, nudging informal businesses into the tax net—a critical lever for broadening the base without raising rates.
Looking Ahead: Future Implications
- Legislative Pipeline: Expect the Finance Bill 2025 H2 to codify ADR procedures, container levies, and incentives for digital compliance. Passage before year-end would give FIRS legal cover to operationalise reforms in the 2026 cycle.
- Technology Convergence: FIRS is negotiating API links with commercial banks to enable real-time withholding remittance. This, combined with AI-driven taxpayer assistants, could push the system toward pre-filled returns within three years.
- Data Governance Challenges: Centralisation under the NRS and expanding digital footprints heighten privacy risks. The forthcoming Data Protection Act must delineate permissible data sharing across agencies to preserve public trust.
- Sub-national Dynamics: States lagging on harmonised levies risk isolation as businesses migrate supply chains. Peer pressure via the NGF and conditional fiscal transfers could accelerate conformity.
- Investor Sentiment: Successful ADR rollout will be watched by portfolio managers who rank dispute resolution alongside macro-stability. Early wins could feed into higher sovereign credit ratings by 2027.
Key Takeaways for Stakeholders
• Businesses: Leverage the June compliance rush to benchmark internal processes. Adopt e-invoicing and explore ADR clauses in tax engagement letters ahead of the framework’s rollout.
• Tax Advisors: Upskill on mediation techniques and digital toolkits; routine preparation will commoditise.
• State Governments: Move swiftly to dismantle illegal checkpoints or face escalating federal scrutiny and potential loss of grants.
• Maritime Operators: Model the financial impact of potential container taxes and renegotiate demurrage terms with clients.
• Policymakers: Finalise the NRS oversight structure and publish key performance indicators to sustain reform credibility.
• Investors: Monitor legislative milestones on ADR and container levies as leading indicators of reduced operational risk.
Prepared by MyTax – mytax.com.ng