President Bola Ahmed Tinubu recently announced that Nigeria’s tax-to-gross domestic product (GDP) ratio has seen a significant increase, now standing at 13.5 percent as of September 2025.
This marks a notable rise from a previous figure of less than 10 percent, indicating a positive trend in the country’s tax collection efforts and overall economic health. The President made this important disclosure during his address on Nigeria’s 65th Independence anniversary, which took place on a Wednesday.
In his speech, President Tinubu emphasized that the federal government’s new tax law, which is set to take effect in January 2026, is designed not to impose additional burdens on the existing taxpayers. Instead, the focus is on broadening the tax base to foster economic growth and development, ultimately aiming to build the Nigeria that its citizens deserve.
He stated, “Our tax-to-GDP ratio has risen to 13.5 percent from less than 10 percent. The ratio is expected to increase further when the new tax law takes effect in January. The tax law is not about increasing the burden on existing taxpayers but about expanding the base to build the Nigeria we deserve and providing tax relief to low-income earners.”
It is important to note that back in June 2025, President Tinubu signed into law four significant tax bills that are expected to reshape the country’s tax landscape. These bills include the Nigeria Tax Bill (Fair Taxation), the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill. Each of these pieces of legislation plays a crucial role in modernizing Nigeria’s tax system and enhancing revenue generation.
Despite the government’s assurances that low-income earners will be exempt from the new tax laws, there have been growing concerns among the populace regarding the actual implementation of these provisions starting in January 2026. Many citizens are apprehensive about how these changes will affect their financial situations, particularly in light of the rising cost of living and economic challenges.
In a recent interview, Zacch Adedeji, the Chairman of the Federal Inland Revenue Service (FIRS), addressed some of these concerns by highlighting key aspects of the new tax law that will benefit Nigerians. He stated that one of the most significant advantages of the new tax legislation is that essential services such as food, education, shared transportation, and agriculture will be exempt from Value Added Tax (VAT). This exemption is intended to alleviate some of the financial pressures faced by everyday Nigerians, particularly those in lower-income brackets.
Overall, the government’s approach to tax reform aims to create a more equitable system that supports economic growth while ensuring that the most vulnerable populations are protected. As the implementation date approaches, it will be crucial for the government to communicate effectively with citizens to build trust and understanding around these changes.
