New Tax Regime: NRS Replaces FIRS.

The Federal Inland Revenue Service (FIRS) has now merged into the Nigerian Revenue Service (NRS), as Nigeria’s new tax regime officially begins today.

Meanwhile, the new tax regime is designed to stimulate revenue expansion to achieve a tax-to-GDP ratio of 18%.

Nigeria’s current tax-to-GDP ratio stands at about 13.5%, which remains one of the lowest among comparable African economies.

Meanwhile, following the formal commencement of the new tax regime’s operations, the NRS yesterday unveiled its institutional brand identity in Abuja.

Also, the new revenue agency has stated that one of its major responsibilities is to secure the support of all stakeholders, particularly members of the public, in light of widespread misinformation surrounding the implementation of the new tax law.

To achieve this, the Presidential Fiscal Policy and Tax Reform Committee is collaborating with the National Orientation Agency, NOA, to produce digital explainers and translations of the new tax law into major Nigerian languages, to carry grassroots stakeholders along from the early stages of the new tax policy implementation.

NRS stated that wide-ranging consultations and stakeholder engagements will be undertaken, involving key groups across society such as traders, women, youths, Nigerians in the diaspora, people living with disability, and students.

The categories also include CEOs and Business Leaders; Multinational groups; Small Businesses in the informal sector; Fintech and financial industry groups; Professional Bodies; Trade Associations; Tax practitioners; Legal and accounting firms; Telecommunications operators; Real estate and construction sector operators; Transport and haulage operators; Hospitality and accommodation industry players; the Oil & Gas sector; and Utility service operators, among many others.

The objective of the consultations, which commenced earlier this year, is continuing as the implementation phase begins.

New corporate identity

With the beginning of a new phase in national revenue administration officially starting today, the NRS yesterday unveiled its institutional brand identity.
NRS came into existence after the signing of its enabling legislation, known as the Nigeria Revenue Service Establishment Act 2025, by President Bola Tinubu in June 2025.


Speaking during the unveiling of the logo on Wednesday in Abuja, the Executive Chairman of NRS, Zacch Adedeji, explained that the logo and other brand elements of the NRS mark a significant milestone in the development of Nigeria’s revenue administration structure.


A statement released by his Special Adviser (Media), Dare Adekanmbi, quoted him as adding that “the unveiling of the NRS identity reflects a renewed commitment to a more unified, efficient, and service-oriented revenue system, one that is aligned with Nigeria’s economic transformation agenda and global best practices.


According to him, the new identity “signals continuity of purpose, strengthened institutional capacity, and a forward-looking approach to supporting taxpayers and national development.”


“The Nigeria Revenue Service remains committed to transparency, partnership, and service excellence. The unveiling of this new identity represents not an end, but the beginning of a strengthened relationship between the revenue authority and the Nigerian public—built on trust, clarity, and shared prosperity,” the statement said.

Under the new tax regime, the NRS will serve as the centralised body for tax administration in Nigeria with effect from today.

The transition became formal following the signing of the Nigeria Revenue Service (Establishment) Act, 2025, into law in June 2025.

The principal aim of the NRS is to strengthen tax compliance, enhance revenue mobilisation, and streamline tax administration across the country. It has the mandate to assess, collect, and account for all revenues (including tax and selected non-tax revenues) that belong to the Federal Government.

Unlike the FIRS, which concentrated mainly on federal tax administration, the NRS has a wider mandate covering a broader range of revenues, to eliminate multiple revenue-collecting bodies at the federal level.

The NRS operates as an autonomous corporate organisation supervised by a Governing Board, chaired by an Executive Chairman who functions as the chief executive.

Its major responsibilities include administering federal tax laws such as Corporate Income Tax (CIT) and Value-Added Tax (VAT); maintaining a unified taxpayer database and issuing the Taxpayer Identification Number (TIN) at no cost; providing taxpayer education, guidance, and digital services; and enforcing compliance as well as prosecuting tax defaulters.

The tax reform that introduced the new tax regime seeks to establish a more transparent and efficient tax structure, with digital integration expected to reduce administrative pressure on businesses.

The main goals include harmonising numerous taxes and levies across different levels of government into a smaller number that are broader and easier to administer; consolidating revenue collection into a single agency per tier of government as much as possible; modernising and simplifying the tax framework, including the deployment of technology in revenue administration; using data intelligence to combat evasion and aggressive tax avoidance; removing tax provisions that hinder business and economic expansion; establishing structures and frameworks to institutionalise reforms for effective policy coordination and collaboration among government agencies and tiers of government; improving efficiency in revenue collection and ensuring transparent reporting; guaranteeing effective utilisation of tax and other revenues for public welfare to enhance citizens’ tax morale, encourage a strong tax culture, and promote voluntary compliance; and transforming revenue generation for sustainable development in order to attain at least an 18% Tax-to-GDP ratio within the next three years.

The NRS is expected to secure operational support from selected domestic and international partners and observers, including the World Bank, International Monetary Fund, United Nations, BudgIT, Tax Justice & Governance Platform, among others.

Presenting the guiding principles of the new tax regime, the Presidential Committee on Fiscal Policy and Tax Reforms stated that it prioritised national interest, where every member of the Committee, regardless of affiliation or political leaning, is required to place Nigeria’s interest above every other consideration, while also adapting international best-practice recommendations to local realities.

It further stated that proposals must be evidence-based and that all submissions and recommendations must be as data-driven as possible.

On tax philosophy, the committee explained that it believes in ‘‘Let everyone breathe’’ particularly the poor, clarifying that the government does not intend to tax poverty, but rather to encourage prosperity and share from it through taxation.

It also stated that taxes on investment or production would be removed as far as practicable, in favour of taxes on returns, income, and consumption.

Speaking further on the guiding principles, Dr. Taiwo Oyedele, the Chairman of the Committee, stated: ‘‘We do not intend to introduce new taxes or increase the rates of existing taxes except if it becomes necessary to compensate for harmonised taxes and levies or prevent revenue loss.

‘‘We will remove tax and fiscal bottlenecks and disincentives. Our goal is to promote investment and facilitate economic growth as a sustainable way to grow and diversify government revenue.

‘‘We will promote fiscal equity for all stakeholders including investors and businesses, both local and foreign, and all tiers of government – federal and subnational

‘‘We will seek and respect members' and other stakeholders’ views. We will consult widely with all key stakeholders and the general public. Differences and disagreements should be expressed professionally with civility.

‘‘We will prioritise our interventions and recommendations focusing on the most impactful and relatively easy to implement measures in terms of time, cost and complexity, starting with issues on which there is broad consensus’’.

Amid increasing public concern over the ongoing tax reforms, Oyedele dismissed suggestions that the government intends to deduct money directly from bank accounts, insisting that such claims are “false, dangerous and capable of destabilising the economy.”


Speaking during a media workshop on the new consolidated tax law, Oyedele said that the rumours circulating on social media were driven by ignorance and deliberate misinformation.
He stated: “Let me say this clearly: nobody — not FIRS, not CBN, not any government agency — has the power to debit your bank account.”

“Whether you have N50,000 or N50 million, nobody is taking any money from your account.’’

Oyedele explained that the allegation originated from the consolidation of major tax statutes into a single code, which led many people to assume that the government had granted itself new enforcement powers.


He clarified that the only existing procedure for recovering unpaid taxes is a court-ordered garnishee, which he described as “a long legal process that is almost never used.”

He stated further, “Even in extreme cases where someone owes hundreds of millions and refuses to pay, the government cannot just wake up and remove money.

“They must assess you, notify you, allow objections, conclude the process, go to court, and get a judge’s order. Without that, nobody can touch your account.”


According to him, in nearly thirty years of involvement in tax administration, he has “never seen a single instance where money was removed from an account without due judicial process.”
He recalled an attempt under former FIRS Chairman, Babatunde Fowler, to impose post-no-debit orders on bank accounts suspected of tax evasion — an effort which failed and did not recover any funds.


“That process didn’t succeed, and it created unnecessary panic,” he noted. “Nobody is repeating that mistake.”


Responding to claims that banks would begin reporting all transactions, Oyedele explained that the 2020 Finance Act had already required accounts used for business purposes to possess a Tax Identification Number (TIN).

He added that the new reform even increases the reporting threshold from N10 million to N25 million, which he stated amounts to “almost N100 million a year before any report is triggered.
“NIBSS data shows that 98 percent of bank accounts in Nigeria have less than N500,000.

“Those accounts will never be reported. This provision is not new — it has been in place for five years.”

The chair of the tax reform committee warned that the ongoing rumours could trigger panic-driven cash withdrawals.


“One thing that can damage the economy very quickly is people rushing to withdraw their money out of fear,” he cautioned, adding, “Nothing in the law authorises the government to debit accounts. Please help us educate others so we don’t create a problem where none
exists.”


Oyedele maintained that the objective of the reform is to simplify compliance, widen the tax base, and reduce the burden on households and small businesses.


He stated, “This reform is not to punish anybody. It is to make life easier, reduce double taxation, and support economic recovery.”



Speaking at the 2025 Nigeria Media Merit Award (NMMA) ceremony in Lagos recently, Oyedele said that tax reform goes beyond rates and revenue, emphasising that it is fundamentally about rebuilding trust between citizens and the state.


He stated: “Tax reform is not just about loss, rates, or revenue generation. At its core, it’s about the social contract of trust between citizens and the state. People ask simple but powerful questions: Why should I pay tax? How is my money being spent? Is the system fair, such that everyone pays their fair share, or is it just me paying?”


According to him, such questions cannot be addressed by the government alone, but require credible, independent, and informed engagement from the media, noting that tax policy is especially vulnerable to misinformation due to its direct effect on livelihoods.


“A credible tax system requires fair laws, honest administration, voluntary compliance, and vigilant public scrutiny of how taxpayers’ money is spent. On our part, we remain committed to reforms that are fair, inclusive, and worthy of public trust,” he assured.