• Nigeria confirms tax reform takes effect Jan. 1, 2026 despite opposition
• PDP alleges illegal insertions, urges suspension and investigation
• Government says overhaul strengthens revenues without raising overall tax burden

Nigeria’s planned tax reform has heightened political tensions, with President Bola Ahmed Tinubu confirming it will take effect on Jan. 1, 2026, despite criticism and calls for a suspension. The government says the new Tax Act is needed to shore up state finances.

The opposition Peoples Democratic Party (PDP) has accused the administration of prioritising revenue collection over the welfare of Nigerians. In a statement on Dec. 30, the party alleged that “illegal insertions” were made to the final version of the law after it was passed by the National Assembly.

The PDP said provisions removed during parliamentary debates had reappeared in the published text. “Nigerians from all walks of life have expressed outrage over the surreptitious reintroduction of provisions earlier removed by parliament,” the party said, calling for an investigation to identify those responsible.

The reform rests on four laws adopted in June 2025, including the Nigeria Tax Act and the Nigeria Tax Administration Act. Measures include raising the capital gains tax on companies from 10% to 30%, introducing a 15% minimum effective tax rate for large firms and multinational groups, and imposing a 4% development levy to replace several sector-specific taxes.

The package also introduces a progressive personal income tax system, exempts the smallest businesses, and strengthens enforcement through a unified Nigeria Revenue Service. This includes mandatory electronic invoicing and tougher penalties for non-compliance.

Tinubu has described the reform as a long-term project, calling the laws a “generational opportunity” to overhaul Nigeria’s tax system and strengthen its fiscal foundations. He has cast the measures as part of broader reforms to modernise tax administration, widen the tax base and reduce the country’s dependence on oil revenues.

“The new tax laws will proceed as scheduled,” the president said, rejecting calls for a suspension.

Tinubu said the reform was not intended to raise the overall tax burden but to reorganise the system, improve coherence and rebuild trust between the state and taxpayers. “No substantial issue has been established that warrants a disruption of the reform process,” he said, warning against what he called “reactive and premature decisions.”

The PDP has linked the dispute to what it describes as a broader pattern since Tinubu took office in 2023, accusing his administration of prioritising fiscal consolidation at the expense of living standards. The party pointed to the early removal of fuel subsidies, which triggered sharp price increases and eroded purchasing power.

“The president must remember that he is in office to serve the people,” the PDP said, urging him to respond to public concerns.

The party called for the immediate suspension of the tax reform pending clarification of the alleged discrepancies, warning that failure to do so could further undermine public trust in the legislative process. The dispute comes as Nigeria, grappling with persistent economic challenges, seeks to balance fiscal recovery with public acceptance of reforms.

Fiacre E. Kakpo