The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has stated that under the country’s new tax laws, set to come into effect from January next year, Nigeria’s Company Income Tax (CIT) rate will drop to 25 percent from the current 30 percent..
Oyedele, who disclosed this at a special media workshop in Lagos, on Friday, said that the reduction in the CIT rate will boost Foreign Direct Investment (FDI) inflows and also positively impact domestic business expansion.
He also said that the CIT reduction is part of a comprehensive reform package aimed at simplifying the tax system and easing the burden on vulnerable individuals, adding that some of the benefits of the new tax laws, include zero percent CIT for small & medium size companies, simplified returns, simplified and business friendly capital allowance regime.
Oyedele noted that the current tax system is unconducive for growth as it places excessive tax burden on businesses.
He argued that under the current tax system, the country taxes poverty, capital and investments using archaic laws and ambiguous provisions.
He stressed that despite misconceptions about the new tax laws circulating on social media, the new laws do not empower either the Federal Inland Revenue Service (FIRS) or the Central Bank of Nigeria (CBN), or any government agency to unilaterally withdraw funds from personal or business bank accounts.
While noting that false narratives could lead to panic withdrawals, and destabilise the economy, Oyedele, declared that, “nobody will debit the accounts. Even if you have N1 billion in the account, nobody can debit your bank account.”
He explained that under the new tax law, Nigeria’s tax administration process requires notification, assessment, objection, and judicial review before any enforcement action can be taken.
According to him, the only scenario where the law permits the government to request bank deductions is in extreme cases, involving large, tax debts that have gone through all legal channels. “It will not apply to anyone that I know of in Nigeria,” he added, emphasising that the provision exists merely as a safeguard, not a routine tool.
He also clarified that the requirement for Tax Identification Numbers (TINs) in bank accounts is not new, as it dates back to the Finance Act of 2020.
According to him, what the new law has done, is raise the reporting threshold from N10 million to N25 million, equivalent to about N100 million annual turnover, effectively excluding 98 per cent of bank account holders.
“No one has the power to debit your account. The law has what is called power of substitution. If someone owes huge tax, goes through all legal process, refuses to pay, and the court says pay, in extreme cases the government can write to the bank. That is the extreme use. It will not apply to anyone I know in Nigeria. But you cannot remove that power from the law because it may become necessary. The message is: nobody is taking any amount from their bank accounts, whether 50k or 50 million.”
Oyedele stressed that the tax reforms were designed to simplify taxation, strengthen compliance, expand the tax net, and support long-term economic stability. He stated that Nigeria has “a fantastic opportunity for an economic reset starting next year,” anchored on improved purchasing power and cost-push inflation dynamics.
