On June 27, 2025, President Bola Ahmed Tinubu signed four groundbreaking tax reform bills into law. Widely regarded as the most comprehensive overhaul of Nigeria’s tax system in decades, these reforms mark a critical turning point for business operators especially startups and SMEs working from innovation spaces like OfficePhase.

These new laws aim to simplify compliance, eliminate inefficiencies, and provide a clearer, fairer, and more digital-friendly fiscal environment.

The New Tax Laws

The tax reform package consists of four distinct laws:

• The Nigeria Tax Bill (Ease of Doing Business) consolidates Nigeria’s previously fragmented tax codes into one unified framework. This makes it easier for business owners to understand their obligations and reduces the confusion created by overlapping laws.

• The Nigeria Tax Administration Bill introduces a standardized, tech-enabled tax compliance structure across federal, state, and local governments. It prioritizes automation and digital filing, reducing delays and manual paperwork.

• The Nigeria Revenue Service (Establishment) Bill replaces the Federal Inland Revenue Service (FIRS) with a more autonomous and performance-driven Nigeria Revenue Service (NRS). This new agency is tasked with managing both tax and non-tax revenue with greater accountability.

• The Joint Revenue Board (Establishment) Bill creates a formal body for coordination among different levels of government. It addresses one of the biggest frustrations for SMEs, multiple taxation, by introducing a streamlined, cooperative governance model.

Better Ease of Doing Business

These reforms are designed to eliminate unnecessary friction in the business environment. For early-stage companies and small businesses operating within OfficePhase, the immediate benefits include fewer regulatory surprises, simplified tax processes, and improved access to support services.

A harmonized tax code means entrepreneurs won’t need to navigate conflicting local tax demands, which often drain time and resources better spent on growth.

Tax Relief for Smaller Enterprises

The reform package offers significant tax relief for micro and small businesses. Under the new structure, any business earning under ₦50 million annually will be exempt from Company Income Tax (CIT).

This means founders and freelancers can reinvest more into their operations while reducing the administrative burden of filing tax returns. It also serves as an incentive for informal businesses to register formally, which opens the door to funding, grants, and legal protections.

Embracing Digital Tax Systems

A key feature of the reforms is a shift toward digital compliance. Businesses will benefit from:

• Faster, streamlined tax filing

• Reduced error rates

• More predictable compliance cycles

For OfficePhase startups already using cloud accounting tools, this aligns perfectly with how modern entrepreneurs operate lean, tech-driven, and time-conscious.

Incentivizing State Productivity with VAT Sharing

The reform introduces a new formula for sharing Value Added Tax (VAT):

• 30% stays in the state where it’s generated

• 50% is shared equally among states

• 20% is allocated based on population

This change motivates state governments to actively support local businesses, knowing they directly benefit from increased economic activity. Entrepreneurs at OfficePhase locations across Nigeria may begin to notice more targeted state-level incentives, infrastructure, and public-private partnerships designed to grow local economies.

Increased Investor Confidence

A transparent and standardized tax framework builds credibility. For startups seeking to raise capital, these reforms make Nigeria a more attractive destination for both local and international investors. Clean tax records, simplified obligations, and reduced regulatory risk improve a company’s investment readiness.

At OfficePhase, where many members are actively scaling, this regulatory clarity strengthens investor conversations and minimizes due diligence friction.

Boosting Formalization in the Informal Sector

The simplified laws and clear exemptions are expected to push more small-scale and informal operators to register their businesses. This shift is especially important for youth-led and women-led enterprises many of whom are developing digital services, artisan products, or niche brands from coworking spaces.

The new system makes it easier to “go formal” without fear of excessive taxation or harassment.

Preparing for the 2026 Rollout

These laws take effect on January 1, 2026. Businesses now have a critical six-month transition period to:

• Review their compliance status

• Train admin or finance staff

• Align digital systems with the new structure.

• Prepare for new VAT and CIT regimes

Implementation Is Everything

While the reforms are robust on paper, the real test lies in how well they’re implemented. As noted by Taiwo Oyedele, Chairman of the Tax Reform Committee, “no matter how transformative a law is, if it is not properly implemented, it amounts to nothing.”

That’s why both public and private sector actors, including innovation hubs like OfficePhase, must remain engaged, advocate for a fair rollout, and help educate entrepreneurs on the changes.

A New Fiscal Foundation for Growth

These reforms aren’t just about revenue collection, they’re about enabling growth, reducing friction, and creating a tax system that actually works for the Nigerian entrepreneur.

At OfficePhase, we welcome these reforms as a critical part of our clients’ growth journey. From freelancers to scaling startups, the new laws provide the clarity, structure, and fairness needed to thrive in today’s competitive business landscape.