New tax law’ll boost FDI, empower SMEs- IMPI
By Muhyideen Jimoh
The Independent Media and Policy Initiative (IMPI) says the Nigeria Tax Act 2025 will enhance foreign investment and empower Small and Medium-sized Enterprises (SMEs).
The group disclosed this in a policy statement signed by its Chairman, Dr Omoniyi Akinsiju, on Tuesday.
Akinsiju said the law, effective January 2026, introduced provisions that abolished double taxation and encouraged business expansion.
“With the implementation of the Nigerian tax laws starting in January 2026, foreign direct investment inflows into the country are expected to be reinvigorated.
“A major thrust in this regard is the adoption of the Minimum Effective Tax Rate (ETR) in the Nigerian Tax Act 2025 and other fiscal measures,” Akinsiju stated.
He explained that the new law brought clarity, a lower effective tax rate, and eliminated dividend double taxation.
“The normal company income tax rate on a large company in Nigeria is 30 per cent of the company’s profit,
“With the adoption of the ETR, Nigerian companies that are members of a multinational group with an aggregate group turnover of 750 million euros and above or have an annual turnover of 50 billion Naira and above will now be subject to a minimum effective tax rate (ETR) of 15% of their net income.
“The goal is to avoid the double taxation of dividends and unrealised gains or losses.
“This reduction in tax rates and clarity around double taxation for multinational companies will undoubtedly influence the flow of global capital to Nigeria,” he said.
Akinsiju noted that the Act would also improve Nigeria’s ease of doing business.
“In addition, the tax exemption threshold for selling company shares in Nigerian companies has been increased to 150 million Naira (from 100 million Naira) in any 12 consecutive months, provided that the gains do not exceed 10 million Naira. This is another ease-of-doing-business policy.”
He said the law would benefit local businesses, especially SMEs, through tax reliefs.
“This results from the simplified compliance and reduction in tax burden on businesses, particularly Micro, Small, and Medium Enterprises (MSMEs) as enunciated in the NTA 2025.
“This will foster a more favourable environment for business expansion and job creation.
“Besides, lowering business taxes (e.g., Corporate Income Tax), as exemplified in the Act, can encourage investment and capital formation, potentially boosting economic growth.
“The overall tax structure, including the progressivity of income taxes, can influence income distribution and aggregate demand, affecting economic growth.”
Akinsiju said the Tinubu tax reforms could reshape Nigeria’s economy more than any other policy in a generation.
“Our verdict is that Nigeria’s federal administration, led by President Tinubu, has gifted the country a body of legacy fiscal policies with the potential to transform the Nigerian economic space more than any policy deployment in a generation,” Akinsiju stated.
He said the four tax acts passed met the fiscal needs for fast and inclusive growth.
“By our reckoning, these tax reforms, as reflected in the substance of the four tax acts, alongside the removal of fuel subsidies and the harmonisation of foreign exchange transactions windows are crucial.
“They are at the heart of the coordinated effort to reset the Nigerian economy on a sustainable and inclusive growth path,” he added.(NAN)(www.nannews.ng)
Edited by Chioma Ugboma
