New Tax Regime: Multinationals, Local Firms Get 5% Annual Tax Credit

The caller taxation regime, expected to travel into unit connected 1 January 2026, volition springiness multinationals and section companies a five‑per‑cent yearly taxation credit, the president of the Presidential Fiscal Policy and Tax Reform Committee, Taiwo Oyedele, has said.

The argumentation includes a five‑per‑cent yearly taxation recognition for investments successful eligible precedence sectors; top‑up taxation exemption thresholds of 50 billion for section firms and €750 million for multinational companies; and an enactment for businesses progressive successful foreign‑currency transactions to remit taxes successful naira astatine the authoritative speech rate.

The reform, described by argumentation experts arsenic 1 of the astir ambitious successful decades, is designed to “simplify taxation, broaden the taxation base, and boost gross generation” without stifling concern growth, peculiarly among micro, tiny and medium‑sized enterprises (MSMEs).

With MSMEs contributing “over 48 per cent of Nigeria’s GDP” and employing much than “80 per cent of the workforce”, the reform’s interaction connected this conception is expected to beryllium profound. Analysts accidental that if decently implemented, it could reshape compliance culture, beforehand formalisation, and thrust inclusive growth.

Speaking successful an interrogation successful Lagos, Taiwo Oyedele said the betterment marks a important turning‑point successful however the Nigerian authorities views taxation, not simply arsenic a gross root but arsenic a “social contract” betwixt citizens and the state.

“Taxation is not conscionable a fiscal tool; it’s a foundational pillar of the societal declaration betwixt citizens and government. When citizens spot transparency and accountability successful taxes, compliance people follows,” Oyedele said, emphasising the request for stronger taxation literacy.

Oyedele described Nigeria’s existent nationalist knowing of taxation arsenic “near zero” and urged the authorities to intensify acquisition and advocacy among “corporate entities, SMEs, and the informal sector” to amended compliance and trust.

Under the caller framework, companies with an yearly turnover beneath ₦100 million and fixed assets nether ₦250 million volition beryllium afloat exempted from firm tax. This determination aims to easiness the compliance load connected micro and tiny businesses.

The firm taxation complaint for larger corporations volition driblet from 30 per cent to 25 per cent, pending statesmanlike support based connected recommendations by the National Economic Council.

Oyedele noted that these adjustments are designed to make a fairer, much straightforward, and much transparent strategy that rewards compliance and investment, portion reducing the multiplicity of taxes that person agelong plagued Nigerian businesses.

He besides drew attraction to gaps successful fiscal administration, citing the continued usage of outdated withholding‑tax systems and anemic expenditure‑tracking mechanisms.

He advocated the adoption of corporate‑governance codes successful the nationalist assemblage to institutionalise fiscal discipline, stating that the authorities needs to beryllium governed by the aforesaid principles it demands from business: transparency, accountability, and worth for money.

He urged stronger public‑expenditure tracking and autarkic audits to forestall fiscal leakages.

Meanwhile, the Association of Small Business Owners of Nigeria (ASBON) has stated that for the reforms to succeed, the authorities indispensable besides tackle the contented of aggregate and informal taxation, particularly astatine the section authorities level.

It called for assembly taxes to beryllium eliminated to let the caller taxation reforms to succeed.

ASBON recognised the benefits of the caller taxation authorities for smaller businesses but criticised insufficient stakeholder engagement and imaginable burdens connected immoderate enterprises.

Speaking successful a media chat, ASBON president, Dr Femi Egbesola, criticised the national authorities for inadequate engagement with SMEs connected argumentation matters, noting that the caller taxation reforms should code bureaucratic hurdles.

ASBON leaders highlighted challenges successful Nigeria’s taxation system, specified arsenic the multiplicity of taxes, complexity and mediocre administration, which whitethorn hinder concern operations.

He warned that, contempt reforms, macro‑economic instability and aspects similar the revised Capital Gains Tax could summation poorness and non‑compliance.

ASBON acknowledged benefits specified arsenic income‑tax exemption for tiny businesses with turnover up to ₦50 million, a consolidated four‑per‑cent improvement levy, and expanded zero‑rated VAT connected indispensable items.

The ASBON brag recommended a collaborative attack to taxation policy, advocating for inclusive implementation, simplified processes, and a supportive concern environment.

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