Naira Gains Ground Against the Dollar

In a surprising turn for the markets, the Naira has appreciated significantly this week, trading at approximately ₦1,250/$1 in the parallel market. Analysts attribute this to the Central Bank’s aggressive intervention and a spike in Diaspora remittances.

Nigeria’s tax reform may strain Financial Inclusion gains
I don’t want government taking something I don’t even know about

New Tax Law

The new tax reforms introduced by the federal government were designed to simplify revenue collection, broaden the tax base and strengthen government finances.

But early reactions from small business owners suggest the changes may be reshaping behaviour in the informal economy in ways that could test Nigeria’s fragile financial inclusion gains.

The reforms, which took effect this January, seek to eliminate multiple nuisance levies, reduce the burden on low-income earners and ensure that most small businesses pay no company income tax. Government officials say the changes are intended to make taxation fairer, more transparent and more efficient.

Yet, since implementation began, confusion and misinformation have spread quickly, particularly online. Some Nigerians now advise labelling bank transfers as “gifts” or “fees” to avoid perceived tax exposure, while others are increasingly avoiding bank transfers altogether.

The chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has repeatedly said the laws were designed to ease, not increase, the burden on Nigerians. He has emphasised that the reforms do not permit banks to debit personal accounts for tax purposes.

The Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, Taiwo Oyedele
The Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, Taiwo Oyedele

“Let me be clear: nobody will debit your account. There is no scenario under the current laws or the upcoming ones where the government can simply take money from you because they think you should pay more tax,” Mr Oyedele said.

He added that even where tax liabilities exist, the law requires formal notices, assessments, the right to dispute and, ultimately, a court order.

“I’ve been involved in tax administration for nearly three decades, and I’ve never seen one instance where this power was used to take a single naira,” he said.

Under the new framework, individuals earning N800,000 or less annually, about N67 thousand per month, pay no personal income tax or capital gains tax. Also, businesses with annual turnover below N100 million are exempt from company income tax, while basic food items, education, healthcare and transport remain VAT-exempt.

Despite these provisions, fear appears to be shaping behaviour for many Nigerians.