Nigeria’s new tax laws promised to simplify taxation and reduce the burden on businesses. But months after the reforms took effect, many Nigerian businesses still complain about multiple taxes, levies and charges from different levels of government.
The problem runs deep. The Central Bank of Nigeria’s July 2026 Business Expectations Survey found that 70.8% of respondents named high and multiple taxation as the biggest constraint to doing business, ahead of insecurity and high interest rates.
For small businesses, the issue goes beyond the amount they pay. The bigger challenge is knowing which charges are legitimate, which agency has the authority to collect them, and whether a business is paying for the same obligation twice.
Nigeria’s new tax regime took effect in January 2026 after President Bola Tinubu signed four major tax reform laws.The reforms aimed to simplify tax administration, eliminate duplication and improve coordination among federal, state and local revenue authorities. They also introduced significant relief for smaller businesses.
Dare Adekanmbi, Special Adviser on Media to the Chairman of the Nigeria Revenue Service, said businesses with annual turnover below ₦100 million don’t owe taxes to the NRS, including VAT.
“Any business whose turnover is less than N100,000,000 has no business paying taxes to us as Nigeria Revenue Service, including VAT,” Adekanmbi said.
That exemption doesn’t remove every payment a business may face, though. States and local governments still collect authorised rates, permits and levies, and that creates room for confusion, particularly when businesses receive demands from several agencies at once.
Businesses Still Face Multiple Collectors
Despite the reforms, operators say the number of demands they receive hasn’t dropped enough.Businesses can face payments for signage, sanitation, waste disposal, business premises, environmental charges, development levies, fire service fees, market dues and operating permits.
Dr Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said implementation at the state level remains a major weakness.“Not all states have domesticated those aspects of tax reforms that relate to the sub-nationals,” Yusuf said.
He added that unless states fully implement the reforms, nuisance taxes, illegal checkpoints and multiple levies may continue.Kuteyi Duro, President of the Association of Food and Agro-allied Processors of Nigeria, said some members have faced as many as 20 different taxes and levies .
For some businesses, challenging a questionable levy can also prove difficult. One manufacturing company told Nairametrics that it no longer argues with collectors when officials arrive with receipts and threats to seal its premises.
That shows the practical problem many smaller businesses face. Even when a charge looks questionable, paying can seem cheaper than losing a day of business or entering a prolonged dispute.
Also Read: Small Businesses Can Now Pay Zero Tax Under Nigeria’s New Law
How Multiple Taxation Affects Small Businesses
Multiple taxation directly threatens the survival and growth of small businesses.
An SME operating on thin margins may not absorb repeated payments to different government agencies without passing some of the cost to customers. That can mean higher prices, lower profits and less money available for expansion or hiring.
The administrative burden matters too. Large companies can hire accountants, lawyers and tax consultants to determine whether a levy is valid. Many SMEs can’t afford that.
As a result, smaller businesses stay more vulnerable to questionable collections and may pay simply because they don’t know whether they have the right to refuse.
Multiple levies can also discourage businesses from formalising or opening new locations. Some operators may decide against registering additional branches because every new location exposes them to more permits, fees and revenue collectors.For an economy that wants more formal businesses, investment and job creation, that’s a serious problem.
Nigeria’s tax reform has changed the legal framework, but its success will depend on what happens on the ground.The Joint Revenue Board has already moved against practices such as road-tax checkpoints and road stickers. But businesses say unofficial and overlapping collections still occur in some areas.
Yusuf said the problem comes down to enforcement. “If you have a law and it’s not implemented, it’s as good as the paper on which the law or policy is,” he said.
That’s now the central test for Tinubu’s tax reforms. For SMEs, a successful tax reform doesn’t just change legislation. It reduces the number of people demanding money from businesses, states clearly what each business must pay, and gives operators a practical way to challenge illegal or duplicate charges.
