3Tax Policies Under Bola Tinubu’s Administration So Far

Taxation is essential to a nation’s fiscal management, and vital for sustainable economic growth and development. In Nigeria, the landscape of taxation has seen transformative changes under the leadership of President Bola Ahmed Tinubu. 

With an emphasis on simplifying the complex tax system, President Tinubu’s administration has introduced significant reforms aimed at bolstering Nigeria’s revenue while ensuring the tax system is less cumbersome for businesses and individuals. 

As we navigate through these changes, it’s crucial to understand how these new policies may influence both the economic environment and the daily lives of Nigerians. Let’s take a brief look at the policies

The introduction of the expatriate employment levy

In February 2024, President Bola Tinubu’s government unveiled the Expatriate Employment Levy (EEL). This policy requires Nigerian companies employing foreign nationals to pay a levy, a move designed to balance the need for foreign expertise with the development of local talent. This levy encourages the employment of Nigerian citizens by making it financially advantageous to hire locally unless specialized skills are needed from abroad.

However, the implementation of the EEL sparked considerable debate. Critics argued that it might deter foreign investment, concerned about the additional financial burden on businesses. In response to these concerns, a pivotal meeting took place on March 8, 2024, led by the Minister of Interior and the Minister of Industry, Trade and Investment, Mrs. Doris Uzoka-Anite. The meeting aimed to refine the policy to foster both local talent development and foreign investment, showing the government’s responsiveness to constructive feedback.

Boosting the oil & gas sector with tax incentives

Recognizing the oil and gas industry challenges, President Tinubu’s administration has taken proactive steps to rejuvenate this vital sector. The government introduced various tax credits, incentives, and allowances specifically targeted at the oil and gas stakeholders through an Executive Order. These include a significant investment allowance and tax credit incentives for greenfield developments in the non-associated gas sector. These measures are intended to stimulate investment and activity in an industry that is crucial for Nigeria’s economy, making it more attractive for both local and international investors.

Cybersecurity Levy

The latest addition to Nigeria’s tax policies under President Bola Tinubu is the cybersecurity levy, introduced to bolster national cybersecurity defenses. Following amendments to the 2024 Cybercrime Act, the Central Bank of Nigeria now requires banks to collect a 0.5% levy on all electronic transactions. This levy funds the national cybersecurity fund, which is critical in a time when digital security threats are increasingly prevalent. Notably, this policy exempts loan disbursements, repayments, and salaries to minimize its impact on everyday transactions, reflecting a thoughtful approach to policy-making that considers the broader implications on the populace.