The Federal Government has unveiled details of its upcoming tax reforms, revealing that nearly all small businesses in Nigeria will be exempt from corporate income tax when the new framework takes effect in January 2026.
The policy, according to the Presidential Committee on Fiscal Policy and Tax Reforms, is designed to relieve pressure on micro, small, and emerging enterprises while refocusing tax collection efforts on larger, more profitable businesses.
Speaking during a media engagement in Lagos, the committee’s chairman, Taiwo Oyedele, explained that the reforms are aimed at correcting long-standing inefficiencies that have discouraged business growth and pushed many operators into informality.
Under the new structure, businesses with relatively modest annual turnover will pay zero corporate income tax, giving them room to reinvest, expand operations, and create jobs. Oyedele noted that this category represents about 97 percent of all registered businesses in Nigeria.
He added that the reforms seek to simplify tax compliance and eliminate the multiple levies that have historically burdened small enterprises across different levels of government.
Oyedele also addressed concerns that the reforms would increase pressure on individuals and entrepreneurs, insisting that the opposite is the case. According to him, the new system is built around fairness, ensuring that high-income earners and large corporations shoulder a greater share of tax responsibility, while small operators are protected.
The committee chairman further clarified that the reforms do not introduce arbitrary bank deductions or sudden enforcement actions. Instead, the policy relies on digital reporting, transparent processes, and gradual implementation to avoid disruption.
Beyond small business relief, the reforms include incentives for investment, reduced company income tax for larger firms, and exemptions for most retail investors in the capital market.
Oyedele described the 2026 tax changes as a shift toward a growth-driven, technology-enabled tax system that prioritises economic expansion over aggressive revenue collection.
As implementation draws closer, business owners are being encouraged to formalise operations and engage with tax authorities early to fully benefit from the exemptions and incentives embedded in the new policy.
