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New tax regime: What’s true, what’s not

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NIGERIA’S fiscal landscape underwent a seismic shift on June 26, 2025, when President Bola Tinubu signed four landmark Tax Reform Bills into law: the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and Joint Revenue Board (Establishment) Act.

Effective 1 January 2026, these laws consolidate more than 70 fragmented taxes into a unified, progressive system administered primarily by the rebranded Nigeria Revenue Service (formerly the FIRS).

The rationale is to simplify compliance, widen the tax base, curb evasion, and boost revenue for development without overburdening the vulnerable.

Yet social media buzz has bred misconceptions, from “all bank transfers are taxed” to “accounts will be confiscated,” which has created panic among some Nigerians, with some already rushing to withdraw their money from banks.

The PUNCH Editorial Board will attempt to cut through the noise, breaking down the impacts on individuals and companies, filing processes, penalties, and why taxes matter.

These laws address Nigeria’s over-reliance on oil, which accounts for 70 per cent of revenue despite volatile prices, according to the NBS data (2024).

By streamlining taxes, eliminating overlaps like the Tertiary Education Tax and IT Levy (now folded into a 4.0 per cent Development Levy), and introducing digital asset taxation, the reforms aim to raise non-oil revenue to 40 per cent of GDP by 2030, per Finance Ministry projections.

Globally, countries depend on taxes to fund services and infrastructure, but Nigeria has relied largely on rent.

For example, Norway, despite its oil wealth, has a top income tax rate of 47 per cent and channels 20-25 per cent of GDP from taxes (not oil alone) into a sovereign fund now worth $1.6 trillion, funding healthcare, education, and infrastructure.

In contrast, Nigeria, with a tax-to-GDP ratio of 13.5 per cent, borrowed N11 trillion in 2025 per DMO, and still failed to implement the capital components of the budget due to revenue shortfalls, mainly oil.

Therefore, Nigeria needs effective taxation to build roads, hospitals, and schools, making tax payment a civic duty, not a burden.

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Under the new tax regime, salaried workers, traders, and professionals will be subject to Personal Income Tax that is now progressive. Individuals earning N800,000 or less annually (about N66,000 monthly) are fully exempt, no tax owed.

Above that, rates climb from 15 per cent on N800,001-N3,000,000 to 25 per cent on income over N50 million. This means that those earning the minimum wage of N70,000 or N840,000 per annum will pay 15 per cent tax on N40,000 or N6,000. Someone earning N100 million will pay roughly N24 million.

Taxable income now includes salaries, rents, digital gains from cryptocurrency trading, and interest, which has been broadened to include FX gains and bond premiums.

The previous Consolidated Relief Allowance has been abolished; taxpayers can claim 20 per cent of annual rent paid, capped at N500,000, provided that proof is adduced. Other non-taxable deductions cover pensions, life insurance, and straight-line capital allowances.

Contrary to social media misinterpretations, not all bank transfers are taxed; only unexplained inflows are counted as income after exemptions. It will be helpful if certain inflows, such as gifts or loans, are tagged as such and reported as non-taxable.

Tax ID (TIN) is mandatory as of 2026 for new bank accounts, insurance, or stock trades, linking finance to compliance, but not confiscation.

Businesses now see a tiered Companies Income Tax structure. Small firms with a turnover of less than N100 million annually and assets of less than N250 million will pay zero CIT; they are fully exempt.

Medium-sized firms with a turnover of between N100 million and N1 billion face a 15-20 per cent tax rate, while large companies with a turnover of over N1 billion will pay a 30 per cent tax. Agricultural startups get a five-year holiday.

For individuals, gains from asset disposals (including digital/virtual assets) now form part of their total income and are taxed at the applicable progressive PIT rates, rather than a separate flat rate.

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However, share sales in Nigerian companies are exempt if proceeds are less than N150 million annually and gains fall below N10 million, or if proceeds are reinvested locally.

The Nigeria Tax Act 2025 introduces a new 4.0 per cent unified Development Levy on the assessable profits of medium and large companies, effective 1 January. The levy unifies and replaces several existing federal levies, such as the Tertiary Education Tax, NITDA Levy, NASENI Levy, and Police Trust Fund Levy, for simplified compliance.

VAT stays at 7.5 per cent, with essentials such as food, medication, education, and transport now zero-rated. Significantly, businesses can recover input VAT on services and fixed assets, which was previously impossible.

One aspect that also requires clarity is Stamp duty, payable on a wide range of documents executed in Nigeria, such as land and tenancy agreements, deeds of assignment, loan and contract agreements, and share transfers and certificates of occupancy.

This is important as unstamped documents are generally inadmissible as evidence in Nigerian civil court proceedings.

Under the new tax laws (Nigeria Tax Act), the former N50 Electronic Money Transfer Levy has been formally classified as stamp duty, and the sender bears the cost rather than the receiver for transactions of N10,000 and above.

Salary payments and intra-bank transfers between accounts held by the same customer (matching names and BVN/NIN) are exempt from stamp duty.

The new tax laws also prescribe that everyone, exempt or not, must file their tax returns annually with a March 31 deadline for companies, while individuals must file by June 30 via NRS portals.

Taxpayers can self-assess by computing income, subtracting reliefs/exemptions, applying rates, paying, and then filing with audited accounts (for businesses) or income statements. Zero returns for exempt folks prove compliance, but TIN registration is required for tax payment.

What is clear, however, is that NRS has a total view of all banking transactions but cannot legally confiscate bank accounts or impose blanket taxes on deposits.

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It is the duty of account holders to report and categorise inflows and claim exemption while filing returns. However, NTAA allows third-party debt recovery only after due process, notices, objections, and appeals.

While cryptocurrency profits are taxed as gains, further valuation guidelines are expected, given the volatile nature of such assets.

The new tax laws impose stricter penalties for non-compliance, which you ignore at your peril.

For example, late filing attracts a N100,000 fine plus N50,000/month of continuous default.

Non-payment of tax attracts a 10 per cent penalty plus interest at CBN’s MPR (currently 27.0 per cent).

Outright tax evasion will be met with criminal charges and or asset seizure post-audit. The NRS can share data across agencies for joint audits to close evasion loopholes.

Despite the six-month time lag between the time the laws were signed and implementation, confusion reigns on X, Facebook and WhatsApp groups, fuelled by fearmongering.

Some trader groups have been meeting, spreading utter falsehoods about the implications of the tax laws, largely due to inadequate sensitisation.

Taiwo Oyedele, Chairman of the Tax Reform Committee, has done most of the talking, but the Ministry of Finance, NRS, Ministry of Information and the National Orientation Agency must do more to educate Nigerians on the new law for complete buy-in and voluntary compliance.

Town halls, radio jingles in pidgin and local languages, NRS apps with simulators, and partnerships with labour unions, market associations, and even religious organisations can help. True, the Tax Ombudsmen can protect rights, but without education, compliance will suffer.

In sum, these reforms lighten the load for the poor and small firms while fairly tapping the wealthy.

Tax payment is not just the citizens’ civic duty; it confers ownership of the government on the people, spurring demands for better accountability from leaders.

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Bank recapitalisation: Local investors provide 72% of N4.6tn

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The Central Bank of Nigeria (CBN) on Wednesday said domestic investors accounted for the bulk of funds raised under its banking sector recapitalisation programme, contributing 72.55 per cent of the N4.65tn total capital secured by lenders.

The apex bank disclosed this in a statement marking the conclusion of the exercise, which began in March 2024 and saw 33 banks meet the new minimum capital requirements.

The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.

According to the CBN, Nigerian investors provided about N3.37tn of the total capital raised, underscoring strong domestic confidence in the banking sector, while foreign investors accounted for the remaining 27.45 per cent.

“Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy,” the statement said.

Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”

The bank confirmed that 33 lenders had met the revised capital thresholds, while a few others were still undergoing regulatory and judicial processes.

“The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme,” it stated.

“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.

“All banks remain fully operational, ensuring continued access to banking services for customers.”

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The regulator stressed that the recapitalisation exercise was completed without disrupting banking operations nationwide, noting that key prudential indicators, particularly capital adequacy ratios, had improved and remained above global Basel benchmarks.

Minimum capital adequacy ratios were pegged at 10 per cent for regional and national banks and 15 per cent for banks with international licences.

The CBN added that the exercise coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall system stability.

To sustain the gains, the apex bank said it had strengthened its risk-based supervision framework, including periodic stress tests and requirements for adequate capital buffers.

It added that supervisory and prudential guidelines would be reviewed regularly to improve governance, risk management, and resilience across the sector.

“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement added.

Meanwhile, data from the National Bureau of Statistics showed that foreign capital inflows into the banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025 from $7.00bn in 2024, reflecting strong investor interest during the recapitalisation drive.

However, the Centre for the Promotion of Private Enterprise has cautioned that despite the strengthened banking system, credit to small businesses remains weak, warning that the benefits of the reforms are yet to fully impact the real economy.

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Court freezes N448m assets in Keystone Bank debt recovery suit

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The Federal High Court in Lagos has ordered the freezing of funds and assets valued at N448,263,172.41 in a debt recovery suit instituted by Keystone Bank Limited against five defendants.

The order was made on March 26, 2026, by Justice Chukwujekwu Aneke following an ex parte application moved by Keystone Bank’s counsel Mofesomo Tayo-Oyetibo (SAN), against Relic Resources, Olufunmilayo Emmanuella Alabi, Uwadiale Donald Agenmonmen, The Magnificent Multi Services Limited, and Raedial Farms Limited.

In his ruling, Justice Aneke granted a Mareva injunction restraining the defendants, whether by themselves, their agents, privies, or assigns, from withdrawing, transferring, dissipating, or otherwise dealing with funds, shares, dividends, and other financial instruments standing to their credit in any bank or financial institution in Nigeria, up to the sum in dispute.

The court further directed all banks and financial institutions within the jurisdiction to forthwith preserve any funds belonging to the defendants upon being served with the order.

The said institutions were also ordered to depose to affidavits within seven days of service, disclosing the balances in all accounts maintained by the defendants, together with the relevant statements of account.

In addition, the court granted a preservative order restraining the defendants from disposing of, alienating, or otherwise encumbering any movable or immovable property, including any future or contingent interests, up to the value of the alleged indebtedness.

The court also granted leave for substituted service of the originating and other court processes on the second and third defendants by courier delivery to their last known addresses.

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The matter was adjourned to April 9, 2026, for mention.

According to the originating processes before the court, the suit arises from a N500 million overdraft facility granted by the claimant to the first defendant on March 28, 2023, for a tenure of 365 days at an interest rate of 32 per cent per annum.

The claimant averred that the facility, initially secured by a $200,000 cash collateral and subsequently by a mortgaged property located at Itunu City, Epe, Lagos, expired on March 27, 2024, leaving an outstanding indebtedness of N448,263,172.41 as at October 31, 2024.

In the affidavit in support of the application, the claimant alleged that the facility was diverted for personal use by the third defendant and channelled through the fourth and fifth defendant companies.

It further contended that the first defendant is no longer a going concern and has failed, refused, and neglected to liquidate the outstanding indebtedness despite several demands made between May and October 2025.

The claimant also expressed apprehension that the defendants may dissipate or conceal their assets, thereby rendering nugatory any judgment that may be obtained in the suit, and consequently urged the court to grant the reliefs sought in the interest of justice.

After considering the application and submissions of learned silk, Justice Aneke granted all the reliefs sought and adjourned the matter to April 9, 2026, for further proceedings.

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Sanwo-Olu unveils Lagos 2026 economic blueprint, vows inclusive growth

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The Lagos State Governor, Babajide Sanwo-Olu, on Tuesday unveiled the 2026 edition of the Lagos Economic Development Update, reaffirming his administration’s commitment to driving inclusive growth and ensuring that economic progress translates into tangible benefits for all residents of the state.

The unveiling of this year’s outlook, held in Ikeja, provides an in-depth analysis of the state’s economic trajectory, capturing global, national, and local developments shaping Lagos’ growth outlook.

Represented by his deputy, Obafemi Hamzat, the governor described the report as more than a policy document, noting that it serves as a strategic compass for guiding economic direction and strengthening decision-making.

He added that despite global economic headwinds — including post-pandemic recovery challenges, inflationary pressures, and exchange rate fluctuations — the state has remained resilient through deliberate policies, fiscal discipline, and sustained investment in critical infrastructure.

“It is with a deep sense of responsibility and optimism that I join you today to officially launch the third edition of the Lagos Economic Development Update — LEDU 2026.

“This platform has evolved beyond a mere policy document; it has become a compass guiding our economic direction, shaping decisions, and reinforcing our commitment to building a resilient, inclusive, and prosperous Lagos,” he said.

He noted that while the global economic environment has remained unpredictable, Lagos has stayed on course through “clarity, discipline, and foresight,” anchored on the T.H.E.M.E.S+ Agenda.

According to him, the state had strengthened its fiscal framework, improved revenue generation, and invested in infrastructure critical to long-term growth.

Sanwo-Olu further highlighted progress recorded since the inception of LEDU, including the expansion of the state’s economic base driven by innovation, entrepreneurship, and digitalisation; improved efficiency in revenue systems; and sustained infrastructure development spanning roads, ports, energy, and urban planning.

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He added that continued investment in human capital remains central, as “people are the true engine of growth.”

Speaking on the theme of this year’s report, “Consolidating Resilience, Advancing Competitiveness, Delivering Shared Prosperity,” the governor said it reflects Lagos’ current economic priorities.

He explained that consolidating resilience involves strengthening institutions and fiscal discipline, while advancing competitiveness requires boosting productivity, innovation, and investment.

Delivering shared prosperity, he added, means ensuring growth translates into jobs, expanded opportunities, and improved livelihoods for residents.

Looking ahead, he reaffirmed the administration’s commitment to economic diversification, private sector-led growth, data-driven governance, sustainable urban development, and social inclusion.

He also stressed the importance of partnerships with the private sector, development institutions, civil society, and the international community in achieving the state’s development goals.

“As we launch this edition of LEDU, I urge all stakeholders to engage actively, strengthen collaboration, and align with our shared vision.

“We have built resilience; now we must translate it into sustained competitiveness and ensure that growth delivers tangible prosperity for every Lagosian,” he said.

Also speaking, the state Commissioner for Economic Planning and Budget, Ope George, said Lagos has demonstrated remarkable resilience in navigating both global and domestic economic challenges.

“Lagos is not just responding to economic shocks — we are building systems that make us stronger because of them,” he said, noting that deliberate policies, disciplined fiscal management, and strategic investments have reinforced the state’s position as a leading subnational economy in Africa.

He added that the state would continue to prioritise economic diversification, private sector growth, sustainable urban development, and social inclusion, stressing that growth must be measured not only by numbers but also by its impact on people’s lives.

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In his goodwill message, Chief Consultant at B. Adedipe Associates Limited, Biodun Adedipe, described the LEDU initiative as a credible framework for tracking economic performance and refining development strategies.

He noted that Lagos remains central to Nigeria’s economy, adding that its continued growth signals broader national progress.

“If Lagos works, a significant share of Nigeria’s commerce works,” he said, expressing optimism about the state’s economic future.

Meanwhile, the Chief Executive Officer of the Nigerian Economic Summit Group, Tayo Adeloju, urged the state government to prioritise affordable housing as a critical driver of shared prosperity.

He noted that high housing costs could limit upward mobility for low-income earners, stressing that making housing more accessible would enhance living standards and support inclusive growth.

Adeloju added that sustained fiscal discipline, improved service delivery, and a broader productive base would further strengthen Lagos’ position among Africa’s leading megacity economies.

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