Tax Law Enforcement Will be Fair, not Arbitrary, says Oyedele

Minister of State for Finance, Taiwo Oyedele, has assured Nigerians that enforcement of the country’s new tax laws will be guided by fairness, transparency, and clear policy direction, not arbitrary decisions.

Oyedele gave the assurance during a fireside chat at the 2026 Annual Conference of the Nigerian Bar Association Section on Legal Practice. The session focused on the theme, From Policy to Practice: Making Sense of Nigeria’s New Tax Reforms.

The minister said understanding the purpose behind tax laws is just as important as reading the provisions, noting that many professionals focus on the letter of the law without fully considering the policy objective behind it.

According to Oyedele, the aim of the reforms is to build a tax system that is more consistent, fair, and supportive of business growth.

Oyedele pointed to flaws in the previous tax regime, especially the gap between what individuals paid in taxes and what registered companies were required to pay. That imbalance, he said, discouraged many businesses from formalising their operations.

Under the old system, an individual could pay an effective tax rate of about 19 per cent, while registering the same business as a company could push the burden above 40 per cent. Oyedele described that as contrary to global best practice.

The reforms, according to the minister, were designed to encourage business formalisation, reduce inconsistencies, and limit excessive discretion in tax administration.

Oyedele also recalled how policy uncertainty had hurt investor confidence in the past, including cases where sudden proposals to sharply raise taxes on gas companies created concern among foreign investors.

In his view, investors need policy stability, and frequent or unexpected changes send the wrong message.

On the issue of fairness, Oyedele said the reforms were deliberately structured to protect low-income earners and small businesses. People earning around ₦1 million a year, as well as millions of small businesses, were considered to have limited ability to pay and are therefore protected under the new system.

Nearly half of working Nigerians earn less than ₦70,000 per month, Oyedele said, arguing that taxing such people aggressively would be unjust.

The reforms also end practices such as imposing minimum tax on businesses that are making losses, which Oyedele described as a system that taxed capital instead of profit.

Essential goods and services, including food, education, and healthcare, have also been exempted from Value Added Tax, making the tax framework more progressive.

To simplify compliance, multiple tax laws have now been consolidated into four major laws, including the Nigeria Tax Act and the Nigeria Tax Administration Act. Oyedele said this would improve coordination among tax authorities and make the system easier to navigate.

Addressing concerns about inconsistencies during the law-making process, Oyedele admitted that some errors occurred because of manual processes and multiple rounds of review. Efforts are already underway to correct those issues through a proposed finance bill.

The minister also called for a more transparent legislative process where every version of a law can be publicly accessed.

Oyedele stressed that legal practitioners have an important role to play in the success of the tax reforms, saying the advice lawyers give businesses will affect investment decisions, job creation, and revenue growth.

While acknowledging some improvement in the use of public revenue, Oyedele said much more needs to be done to deliver a stronger impact and efficiency. Nigeria, he noted, still trails countries such as South Africa in tax collection.

According to the minister, better tax collection would increase funding for key sectors such as infrastructure, education, and healthcare.

Oyedele urged lawyers to pay close attention to how the reforms are implemented, stressing that success will depend not only on the laws themselves, but on how effectively they are applied in practice.