Regardless of the controversies, lawyers and tax experts have called on Nigerians to comply fully with the new tax law, stressing that tax registration and payment are mandatory obligations for individuals and businesses.
They made this call in Lagos during a fireside chat on the tax law organised by The Redeemed Evangelical Mission (TREM), with the theme: “Nigerian Tax Reforms Act 2025: Clarity, Compliance and Consequences.”
According to the experts, every eligible individual is required to register for tax, while companies must also ensure proper onboarding into the tax system to access entitled benefits and avoid sanctions.

They warned that failure to comply attracts serious penalties under Sections 100 to 127 of the law, including punishments for non-payment, refusal to register, or falsification of tax declarations.
A lawyer, Frank Nabena, explained that the Tax Act is now firmly established and applies to individuals, companies, corporate organisations, foreign businesses operating in Nigeria, and residents earning taxable income within the country.

Nabena noted that before recent reforms, Nigeria’s tax framework was scattered across several laws, including the Petroleum Tax Act and the Value Added Tax (VAT) Act.
“However, recent restructuring has consolidated the system under four principal legislations regulating tax administration in the country.
“These include the Nigerian Tax Act 2025, the Nigerian Revenue Service Act 2025, the Joint Tax Board Establishment Act 2025, and the Tax Administration Act, which provides guidelines on tax implementation and oversight.

“The Nigerian Revenue Service (NRS), formerly the Federal Inland Revenue Service (FIRS), is responsible for revenue collection, while the Joint Tax Board coordinates tax administration across federal and state agencies to streamline collections and eliminate multiple taxation,” he said.
Nabena maintained that the ongoing tax reforms are permanent and urged Nigerians to embrace compliance, noting that the new system is designed to improve revenue generation and strengthen national economic growth.
He stressed that Nigerians cannot avoid the tax system, as the reforms are now a central part of the country’s financial and governance structure.

The Chief Executive Officer (CEO) of Taxaide Technologies Limited (Taxtech), Bidemi Olumide, said the reforms represent a major shift in how the government engages citizens on taxation, stressing that knowledge and compliance are now more critical than ever.
According to him, the reforms place strong emphasis on financial disclosure and tax compliance, noting that the government primarily seeks two things from citizens: accurate financial information and tax payments.
Olumide, who is also a lawyer, explained that workers in formal employment may have fewer reporting concerns, as employers are required to submit relevant information on their behalf.

However, he warned that self-employed individuals, business owners, and those managing estates or trusts must take personal responsibility for filing tax returns and providing financial disclosures.
He added that individuals outside formal employment are required to file personal income tax returns within 90 days of the new tax year.
On the financial impact of the reforms, Olumide said low and middle-income earners stand to benefit from reduced tax rates.
Individuals earning below N24 million yearly will pay less tax under the new system, while those earning below N800,000 yearly may be exempted from paying personal income tax.

He noted that higher earners will face increased tax obligations, with the maximum effective tax rate rising from about 19.2 per cent under the old system to about 22 per cent under the new framework.
Olumide also stressed the importance of understanding tax exemptions and deductions, noting that tax is applied to chargeable income, income remaining after approved deductions such as pension contributions, life insurance premiums, health insurance payments and rent reliefs.
He further advised small businesses to understand available government incentives, especially under the Value Added Tax (VAT) system.
He said companies with a turnover below N100 million may qualify as small businesses and may not be required to file monthly VAT returns if they notify the tax authorities.

He clarified that taxes are based on turnover revenue from sales, not loans, deposits, or external funding.
Olumide urged taxpayers to file returns on time and seek professional advice when necessary.
He added that while small companies may be exempted from company income tax, they must still file returns and comply with withholding tax obligations on payments to contractors.
“Taxpayers must remain informed – ignorance remains the biggest risk under the new tax system,” he said.