Like him or hate him, President Bola Tinubu deserves some flowers for initiating the nation’s boldest tax reforms in decades. On Thursday, he appended his signature on four tax bills: the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill 2024, the Nigeria Revenue Service (Establishment) Bill 2024, and the Joint Revenue Board of Nigeria (Establishment) Bill 2024.

There are 10 things you need to know about these tax reforms signed into law on Thursday. First is that workers who earn N1.3 million annually and below will be exempted from paying taxes. Hence, if your monthly wage is N108,000 or less, you are not expected to pay tax on your income.

Secondly, the new tax laws bar cash payments at roadblocks and other non-formal collection channels. This means that it will be unlawful for government officials such as police, Customs, immigration officers, among others, to collect payment in cash. This also concerns ‘agberos’ who collect governments’ road taxes without giving account of them.

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Third, if you are a farmer or manufacturer in the business of dairy, livestock, forestry, animal feed, and cocoa processing, you will get five-year tax holiday in line with the tax reforms. Again, if you are purchasing or hiring agricultural machinery or equipment, you will not pay the value added tax (VAT).

Fourth, the tax reforms prescribe that if you run a small business with a N50 million turnover or your fixed assets do not exceed N250 million, you will be exempted from paying the company income tax. You will also enjoy zero withholding tax on your business revenue.

Fifth, the tax reforms make no room for multiple taxes. In Nigeria, businesses pay the same tax in different locations. In some cases, they pay a variety of taxes many times over a period. But the new tax laws do not give room for such tax multiplicity.

“Multiple taxes have become common everywhere in Nigeria. As a businessman, I pay for the same tax in states where I operate- Lagos, Osun and Ogun. The fact that the tax laws intend to fix this problem is a welcome development,” said Lagos-based businessman, Mr Kayode Ogunjobi.

Sixth, VAT remains 7.5 percent, not 15 percent, even till 2030. This means that the most controversial aspect of the tax bills, which was VAT, was expunged.

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Seventh, tax reforms have eased pressure on the real estate sector. Chairman of the Presidential Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, proposed that VAT on real estate transactions would be exempted, thereby reducing the cost of building materials.

“The bill is designed in a way to favour low-income earners. Contrary to what is being claimed, it will also ease their burden,” Mr Oyedele said during the ‘Building and Construction Industry Forum’ in Lagos in April 2025.

“There will be no VAT on lands, sale of real estate, and rent is exempted from VAT. Some of these are areas of controversy in the past,” he said, as reported by The Punch. “There is an exemption on stamp duties for rents below N10 million a month and capital gains tax is also exempted on the sale of dwelling houses,” he further said. These provisions were added to the new tax laws.

Eighth, starting from next year, there will be a body known as Tax Ombudsman that will be set up to protect taxpayers’ rights and ensure that none of them is unfairly treated.

Ninth, there will be tax incentives for manufacturers in certain sectors. For example, manufacturers of non-metallic building materials such as cement and glass will receive priority tax incentives.

Tenth, there is zero VAT on food, healthcare, and education, which represents about 60 percent of all consumption in Nigeria. “There will be tax exemption on rent, transportation, renewable energy, CNG, baby products, sanitary towels, and fuel products representing over 20% of all consumptions,’ Oyedele further said.

The problem, however, is implementation. “If the Nigerian factor does not get in the way and the tax reforms are implemented fully, there will be economic transformation, new investments and increased government revenue. Life will also be much better,” said an economist, Ms Joy Damian.

“My fear is that there will be several roadblocks in the area of implementation.”