On Thursday, June 26, 2025, President Bola Tinubu signed into law four landmark tax bills recently passed by the National Assembly.
Whether one agrees or disagrees with Tinubu’s style of governance, the new tax bills signal a new beginning for Nigerians, businesses, and governments, both at the subnational and federal levels.
Some key highlights of the Reforms are :-
Elimination of Duplication in Tax Collection: One major reform is the establishment of the new Nigeria Revenue Service (NRS), which will now collect revenues that were previously handled by numerous agencies, such as the Nigeria Customs Service, Nigerian Ports Authority (NPA), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NIMASA, and others.
Tax Exemption for Low-Income Earners: With the new provisions, individuals earning ₦800,000 or less per year are now fully exempt from income tax. This is a masterstroke, especially for many people in the North. It removes a huge burden and creates space for their small and medium-sized businesses to grow and flourish.
New Personal Income Tax Rate:
Only those earning above ₦50 million annually will be required to pay the new 25% personal income tax rate. This is both fair and reasonable.
Another big win for the North, which has the highest concentration of poor people in Nigeria, is the removal of VAT on essential goods and services: school fees, medical services, food, pharmaceuticals, and electricity. This is a solid relief for the poor and for small and medium-sized businesses.
Corporate tax will now reduce from 30% to 25%, and small businesses are fully exempt from paying income tax.
The controversial VAT issue has now been ‘fairly’ settled, and again, it’s a big win for the North, which had previously raised concerns. The new revenue-sharing formula is as follows:
Federal government 10%; states: 55%, local governments: 35%
Even more importantly, the VAT sharing formula has been revised in a way that favours the North, if northern states seize the opportunity to harness and develop their economies and markets, especially in agriculture. The new sharing criteria are: 50% of VAT is shared equally among all states; 20% is based on population; 30% is based on where goods/services are consumed.
One of the most important features of these tax reforms is how they protect and uplift the poor and small businesses especially in the North, where: About 65% of Nigeria’s poorest people live; over 52% of the country’s states are located; more than 60% of the population resides; nearly 70% of Nigeria’s landmass is found; and almost 80% of agricultural production takes place.
It’s time for northern states to tap into local knowledge and deploy homegrown experts to thoroughly study the four landmark tax laws in line with each state’s peculiarities and needs, yet with the whole North as the unifying objective.
If well studied and strategically implemented, Tinubu’s new tax reforms could be the silver bullet the North has been waiting for.
They offer fiscal justice, decentralisation of revenue, protection for the poor, incentives for businesses, and a practical opportunity to lift millions out of poverty.
But as always, it will take visionary leadership, technical capacity, and political will to translate policy into impact. The opportunity is here. The North must not waste it.