Nigeria’s sweeping tax reset took effect on 1 January 2026, but its rollout has been overshadowed by an unusually public dispute over which text of the law is authoritative: an “initial” gazetted version that circulated widely versus the version passed by the National Assembly and assented to by Bola Tinubu.
Opposition lawmakers and some analysts alleged that provisions appearing in gazetted texts were not contained in the legislature’s harmonised bills—raising due-process and constitutional concerns and prompting calls for implementation to be paused.
In response, the National Assembly said it would release certified copies of the bills transmitted for presidential assent and work with the Government Printer to publish duly certified Acts—an explicit acknowledgment of the controversy surrounding “votes and proceedings” versus what appeared in earlier gazetted versions.
1) Export incentives: income-tax exemption removed; VAT zero-rating retained
What changed:
Earlier versions exempted from income tax the profits Nigerian companies earned from exports (outside petroleum), provided proceeds were repatriated through official channels. The Final Act removes this income-tax exemption but retains VAT zero-rating for exported goods and services.
Why it matters:
Under the gazetted draft, exporters expected two layers of relief: no VAT on exports and no company income tax on export profits. The final law removes one of those layers. Exporters now still avoid VAT, but their profits are taxable. In practical terms, this means lower net returns, tighter cash flow, and the need to revisit pricing and expansion plans that were based on draft assumptions.
2) “Small company” threshold: turnover doubled to ₦100m
What changed:
The turnover threshold for “small company” status rises from ₦50 million to ₦100 million, while the fixed-asset cap remains ₦250 million.
Why it matters:
Small companies pay 0% company income tax and are exempt from VAT registration. By doubling the threshold, the final law brings many more growing businesses into this relief bracket. For entrepreneurs, this frees up cash for reinvestment; for the tax system, it deliberately shifts the burden away from early-stage firms toward larger, more established businesses.
3) Minimum Effective Tax Rate: audited PBT becomes the anchor
What changed:
The Final Act bases the Minimum Effective Tax Rate (METR) on audited profit before tax, removing alternative draft calculations that allowed extensive adjustments.
Why it matters:
METR acts as a safety net to ensure large companies pay a baseline level of tax. Using audited PBT makes the rule easier to understand and enforce, but it also reduces flexibility. Companies that structured operations expecting broader deductions may now face higher effective tax bills.
4) METR scope threshold: €750m becomes £750m
What changed:
The threshold for determining which multinational groups are affected shifts currencies—from euros to pounds—likely unintentionally.
Why it matters:
This technical change alters who falls inside the regime. Even small drafting errors at this level can change investment calculations and delay decisions while companies await clarification.
5) VAT and gambling: “stakes” exempted
What changed:
The Final Act explicitly exempts gambling stakes—the amount wagered—from VAT.
Why it matters:
This prevents VAT from being charged on money that operators do not actually earn, reducing disputes, over-taxation, and consumer cost distortions.
6) Electric vehicles: zero-rating dropped
What changed:
VAT zero-rating for electric vehicles and components in the Initial Gazette does not appear in the Final Act.
Why it matters:
Without VAT relief, EV prices are likely to be higher, slowing adoption and signalling that green incentives were deprioritised during final negotiations.
7) Free zones: incentives retained, but 2028 deadline fixed
What changed:
The Final Act confirms that profits from sales into Nigeria’s customs territory will be fully taxable from 1 January 2028, removing discretion to extend relief.
Why it matters:
Free-zone operators now have a firm deadline to restructure operations. For investors, this certainty is preferable to indefinite extensions that create planning risk.
8) Petroleum decommissioning funds: deposit requirement halved
What changed:
The required Nigerian-bank deposit falls from 30% to 15%.
Why it matters:
This reduces cash strain on upstream oil companies while still safeguarding funds for environmental clean-up and abandonment obligations.
9) Petroleum royalties: relocated, not abolished
What changed:
Royalties are reorganised into a Seventh Schedule rather than removed.
Why it matters:
The government’s royalty take remains intact. The risk lies in misinterpretation, not lost revenue.
Why the gazette dispute matters — and why the real question was missed
The controversy surrounding Nigeria’s new tax law was framed largely as a question of integrity: whether differences between the gazetted text and the National Assembly–approved version amounted to deliberate fraud, executive deception, or a covert attempt to insert provisions for political or personal advantage.
That framing, while understandable in a low-trust environment, risks missing the more substantive issue.
Nothing in the publicly identified differences—whether on export incentives, small-company thresholds, VAT treatment, free-zone timelines, or petroleum fiscal provisions—clearly points to strategic self-dealing or targeted political enrichment. The changes do not obviously advantage a narrow group of politically connected actors, nor do they introduce hidden revenue streams or discretionary powers that could be easily abused. In several cases, the final provisions are more restrictive, more fiscally conservative, or less generous than the earlier gazetted drafts—an outcome that is difficult to reconcile with a theory of covert rent-seeking.
A more plausible explanation is institutional: complex, omnibus legislation moved rapidly through drafting, harmonisation, gazetting, and commencement under severe time pressure, with multiple actors involved and weak coordination between legislative texts, implementing agencies, and the government printer. In such systems, discrepancies are more often the result of process failure than of intent.
From a public-interest perspective, the more important question was therefore not whether someone acted dishonestly, but what the differences actually meant. Some changes materially affect cash flows, investment incentives, tax burdens, and compliance costs. Others are largely technical, transitional, or clarificatory. Treating all differences as evidence of fraud obscured this distinction and diluted attention from the real economic consequences for businesses, investors, and households.
That misdirection matters. Regulatory certainty is not restored merely by asserting probity; it is restored by understanding impact. The episode exposed a deeper institutional weakness: Nigeria lacks a well-understood, trusted mechanism for reconciling draft legislation, final votes, gazetting, and public communication in real time. When that chain breaks, suspicion fills the gap.
This is why the publication and use of certified Acts—and professional analyses that explain what changes mean in practice—became more important than rhetorical accusations. Confidence in tax reform depends less on proving the absence of bad faith and more on ensuring clarity, predictability, and accountability in how laws are made, published, and enforced.
In that sense, the gazette controversy was not just about integrity. It was a stress test of Nigeria’s legislative infrastructure—and a reminder that opacity, even when unintended, carries economic costs.