Expert urges improved digital infrastructure to strengthen new tax legislation
Tax
By Ibukun Emiola
Ibadan, Dec. 30, 2025 (NAN) A tax expert, Mr Olugbenga Obatola, has called for improved digital infrastructure and the elimination of multiple taxation, as this might limit the impact of Nigeria’s new tax legislation.
Obatola, a Fellow, Chartered Institute of Taxation of Nigeria (CITN) spoke in a seperate interview with the News Agency of Nigeria (NAN) in Ibadan on Tuesday.
According to him, the new policy scheduled to take effect from January 2026, presents a major opportunity for Small and Medium Enterprises (SMEs) to expand and reinvest.
He worried about the weak digital infrastructure which he said could limit the benefits to those in the rural areas particularly.
“The 2025 Tax Reform Acts marks one of the most sweeping and potentially transformative fiscal reforms for SMEs in Nigeria in decades.
“If implemented faithfully, with transparency, fairness, and strong support for SMEs, the reforms could be a significant boost for entrepreneurship, business formalisation, job creation and economic diversification.
“For many small business owners and especially the artisans, small traders, start-ups, small manufacturers, and so on, this is a real opportunity to grow without being crushed by tax burdens.
“That said, the success of the reforms depends heavily on the implementation plans put in place by government and the availability of digital infrastructure, awareness, enforcement, and protection against State and Local Government duplicative levies.
“Without these, some of the benefits may not reach the grassroots or worse, new informal levies could arise to replace the old ones,” he said.
He also advised small and medium size companies to secure the services of good Tax advisors, to assist them in navigating the new tax regime bu January.
According to him, the 2025 Tax Reform Acts introduced some of the most significant tax incentives for SMEs in decades, including the exemption of companies with turnover not exceeding ₦100 million from key federal taxes.
He listed the affected taxes as Companies Income Tax (CIT), Capital Gains Tax (CGT), Stamp Duty (SD), Education Tax (ET) and Development Levy.
According to him, the reliefs are expected to boost cash flow, encourage reinvestment in machinery and technology, improve competitiveness and support access to bank credit for qualifying enterprises.
“The exemption is not just a reduction of tax burden; it is a stimulus for growth if SMEs use the savings wisely to strengthen operations, structure finances and scale production,” he said.
Obatola added that the reforms also consolidates levies for medium and large companies and introduces digital tools to improve transparency in the tax system.
He, however, cautioned that gaps in digital readiness could prevent informal and rural businesses from accessing the benefits of the reforms.
“Mandatory e-invoicing, electronic VAT reporting and real-time documentation, will pose compliance challenges for micro enterprises operating in areas without reliable internet or digital tools,” he said.
The expert noted that unauthorised state and local government levies remained a major threat to the policy, warning that parallel taxation systems could erode the relief provided at the federal level.
He urged regulators to prioritise enforcement against arbitrary charges at sub-national levels, adding that awareness and capacity support must accompany the reform for it to be effective.
“Government agencies, especially SMEDAN and the National Orientation Agency, need to go beyond announcements and take sensitisation to the grassroots where most SMEs operate,” he said.
He also recommended subsidised digital accounting tools, business-friendly filing systems and advisory desks in tax offices to support compliance.
“If implementation is smart and inclusive, this becomes more than a tax break, it becomes a growth plan.
“But if digital gaps and multiple taxation persist, the policy may not deliver its full impact,” he said. (NAN) (www.nannews.ng)
IBK/UNS
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Edited by Sandra Umeh