New Tax Laws Set for 2026: Who Really Pays as Data, Experts and Labour Unions Raise Red Flags?

By Kparobo Ehvwubare

As the Federal Government insists that Nigeria’s new tax laws will take effect on January 1, 2026, emerging data and expert analysis are fuelling questions about who will ultimately bear the cost of the reforms in an economy already under strain.

In a State House press statement on Tuesday, President Bola Ahmed Tinubu described the tax reforms as a “once-in-a-generation opportunity” to reset Nigeria’s fiscal framework. According to the Presidency, some provisions have been in force since June 26, 2025, with full implementation slated for the new year.

The government maintains that the reforms are not intended to raise taxes, but to improve efficiency, harmonisation, and compliance.

Cost-of-Living Context Raises Concerns
Critics point to Nigeria’s current economic indicators to argue that the timing of the reforms is critical.
Recent official data show that inflation has remained persistently high, while food prices and transport costs have outpaced wage growth. At the same time, household disposable income has declined, and small businesses continue to report rising operating expenses linked to energy, logistics, and regulatory compliance.

Nigeria’s tax-to-GDP ratio, estimated by international financial institutions to be among the lowest globally, is often cited to justify reform. However, analysts note that low revenue collection does not automatically mean low tax burden on citizens.

“The issue is not how much the government collects, but who pays and how,” said Michael Clark, a tax expert and fiscal policy analyst.”

Clark warned that while statutory tax rates may remain unchanged, indirect levies, compliance fees, and administrative costs often increase the real tax burden on consumers.

“When compliance costs rise, businesses pass them on through higher prices,” he said. “Data consistently shows that indirect taxation impacts low- and middle-income households more than the wealthy.”

SMEs and Informal Sector at Risk
Available business data suggests that small and medium-sized enterprises (SMEs) account for over 90 per cent of businesses in Nigeria and employ the majority of the workforce. Analysts warn that even marginal increases in compliance costs can push fragile enterprises out of the formal economy.

A former senior official of the Federal Inland Revenue Service (FIRS), Tunde Okafor, said harmonisation could reduce multiple taxation if properly implemented, but warned that weak coordination at subnational levels remains a risk.

“If implementation is uneven, businesses could face overlapping demands rather than relief,” he said.

Labour Unions Cite Worker Data
Labour unions argue that workers are already absorbing economic shocks.
The Nigeria Labour Congress (NLC) noted that recent wage adjustments have not kept pace with inflation, meaning workers’ real incomes have declined even without new taxes.

“When prices rise faster than wages, workers are effectively paying more,” the union said, warning that indirect tax pressures could worsen living standards and job security.

Civil Society Flags Equity Gaps
Civil society groups have also referenced inequality data showing a widening gap between high-income earners and low-income households.

The Socio-Economic Rights and Accountability Project (SERAP) called for the release of impact assessments, arguing that data-driven policymaking is essential to prevent regressive outcomes.

Similarly, the Civil Society Legislative Advocacy Centre (CISLAC) stressed that international experience shows tax reforms succeed only when public trust and transparency are prioritised.

“In countries where reforms failed, the data shows they were rushed and poorly communicated,” CISLAC said.

Presidency Defends Reform Path
The Presidency insists that no substantial issue has been identified that warrants delaying implementation and has pledged cooperation with the National Assembly to address any concerns.
President Tinubu said the government would continue to act in the public interest to ensure a tax system that promotes prosperity and shared responsibility.

As January 2026 approaches, analysts say the debate is no longer just ideological but evidence-based: whether the reforms will correct long-standing inefficiencies or whether, as past data suggests, indirect costs will quietly shift the burden onto households least able to absorb it.

Kparobo Ehvwubare is an Investigative Journalist and Solution journalist.