E-Financial
Fiscal Policy and Tax Reforms Committee Clarify New Tax Reform Laws
The Presidential Fiscal Policy and Tax Reforms Committee has clarified some misconceptions surrounding Nigeria’s newly enacted tax reform laws.
Speaking at engaged journalists, influencers, and public analysts in an interactive session in Lagos yesterday, Taiwo Oyedele, the Committee’s Chairman, stated that while it is not unusual for tax reforms to be misunderstood anywhere in the world, deliberate misreporting and uninformed analyses are harmful to our collective interest given that the reforms are designed to benefit ordinary Nigerians, secure long-term economic stability and inclusive growth for the country.
“The objectives of the reforms have been clear from the very beginning – reduce the tax burden on the masses, harmonise and simplify tax rules to address multiplicity of taxes, promote a modern, business friendly and globally competitive tax system. Our approach is people-centric, growth-focused, and efficiency-driven,” Mr. Oyedele said.
Key Highlights of the New Tax Reform Laws
- Personal Income Tax: Low income earners including those earning national minimum wage are exempted from tax. The average income earners will pay less tax while high-income earners (about the top 3% of the population) will contribute progressively more, up to 25% of their income.
This is a much lower rate than the top rates in countries such as Ghana & Kenya at 35% and South Africa at 45%.
- Value Added Tax (VAT): Businesses will enjoy broader input credits on their assets and
overhead to lower costs. Basic items such as food, education and health services are taxed at 0% while rent and transportation are exempt. These measures are expected to result in lower prices for consumers. In addition, small businesses are exempted from charging VAT ensuring that they are not overburdened with excessive tax obligations.
- Tax Identification (Tax ID): The provision of “Tax ID” is only mandatory for opening and
operating a bank account intended for income generating or business purposes. The “Tax ID” is not a new ID card but a system that builds on and harmonises the existing Tax Identification Numbers (TIN) for ease of economic activities. The requirement to provide a TIN for operating a business account was introduced via the 2020 Finance Act and has been implemented since 13 January 2020. While banks are required to report quarterly transactions above a certain threshold under the new tax laws, it is not true that inflows into bank accounts will be automatically taxed.
- Informal Sector: The new tax laws offer major tax reliefs to small businesses. The new tax structure is designed to encourage formalisation by exempting small companies with annual turnover of N100m or less from corporate income tax. In addition, these small businesses are exempted from charging VAT or accounting for withholding tax on their transactions. The goal is to reduce the burden on nano, micro and small businesses who constitute the largest share of employment and GDP.
- Tax Harmonisation: There is an ongoing process to reduce over 60 different taxes and levies to fewer than 10, easing compliance and curbing proliferation of multiple charges. Contrary to the misconception about imposing a higher tax burden or introducing new taxes, the current administration is reducing both the number of taxes and the burden on citizens and businesses.
Some taxes which were introduced by the previous administrations have in fact been reversed or suspended including the 5% levy on airtime and data, cybersecurity levy on bank transfers, carbon tax on single used plastics, excise tax on vehicles and so on.
- No imposition of tax on individuals not previously taxable: The new tax laws did not introduce taxes on individuals who were not previously taxable. Online content creators, influencers, income from virtual assets, and other income generating activities have always been subject to tax under the old Personal Income Tax Act. The new tax laws only provide clarity, and ensure fairness by allowing deductions for losses where applicable. Income earned by way of a gift rather than as a payment for a transaction is not taxable.
The ongoing tax reform is raising public awareness which sometimes leads to the wrong impression that a requirement is new. The Committee stressed that the reforms are aimed at fairness, efficiency, and simplicity – ensuring that the tax system supports investment, job creation, and sustainable growth.
The Committee clarified that:
- The poor are not being taxed under the new laws, and the average citizen will pay less, not more taxes.
- Businesses will save costs through harmonisation, enhanced input credits, faster tax refunds, lower withholding tax rates, and planned reduction in corporate tax rate.
- Small companies are exempted from corporate income tax, charging of VAT on their transactions and withholding tax. The informal sector will benefit from incentives to join the formal economy rather than being penalised thereby enhancing their opportunity for growth.
- These reforms are not about raising taxes arbitrarily, but about making the system simpler, fairer, pro-people and pro-growth. The measures designed to curb tax evasion are necessary to provide a level playing field for honest and patriotic taxpayers.
Mr. Oyedele called on Nigerians to seek credible information and engage constructively. “These reforms are designed to benefit all Nigerians. Let us work together to ensure effective implementation and position ourselves for the better days ahead of us,” he said.
Next Steps
The Committee assured stakeholders of working with relevant implementing agencies for a robust and transparent implementation process, with continuous engagement to seek feedback, address concerns and ensure smooth transition.
Central Bank of Nigeria (CBN) has directed all International Money Transfer Operators (IMTOs) operating in the country to open and maintain naira settlement accounts with authorised dealer banks, as part of efforts to tighten oversight of diaspora remittances and improve transparency in the foreign exchange market.
The directive was contained in a circular dated March 24, 2026, signed by Dr Musa Nakorji, director of the Trade and Exchange Department, and addressed to IMTOs, authorised dealer banks and the general public.
The circular was published on the apex bank’s website on Tuesday.
The CBN said the measure is aimed at “enhancing diaspora remittances, strengthening transparency, traceability, and effective monitoring of all transactions.”
It stated that “all IMTOs are hereby directed to open naira settlement accounts and ensure that all transactions are routed strictly through their designated settlement accounts, maintained with Authorised Dealer Banks in Nigeria.”
Under the new rule, all inflows, beneficiary payments and related settlements linked to international money transfers are to be processed solely through these accounts.
IMTOs may, however, operate multiple settlement accounts across different banks in line with their operational needs.
The circular also introduced tighter controls on how the accounts can be funded, stating that they “shall only be credited with remittance flows and proceeds of foreign exchange conversions by licensed IMTOs (or their agents)” within the Nigerian foreign exchange market.
Operators are required to clearly designate the accounts and submit the details to the CBN, with updates provided periodically where necessary.
To improve market operations, authorised dealer banks are permitted to process foreign currency transfers from IMTO settlement accounts to other banks and approved participants, including licensed Bureau De Change operators.
The apex bank further directed IMTOs to adopt market-reflective pricing by referencing the Bloomberg BMatch system. It said IMTOs “shall observe real-time market prices from the Bloomberg BMATCH and utilise this as guidance for pricing transactions with their customers and Authorised Dealers.”
According to the CBN, this approach is expected to “improve price discovery, reduce information asymmetry between IMTOs and banks, and encourage increased participation in the official FX market.”
The bank added that all operators must maintain proper transaction records for regulatory checks and comply fully with anti-money laundering, counter-terrorism financing and counter-proliferation financing rules.
“This directive takes effect from May 1, 2026. Please note and ensure compliance,” the circular stated.
The move shows the CBN’s push to channel remittance inflows through formal banking channels, boost liquidity in the official foreign exchange market and strengthen regulatory oversight of cross-border transactions.
E-Financial
DLM Capital Group’s AAA-Rated Sovereign Bond-Backed Composite Notes (“SBCNS”) Strengthens Investor Confidence with Successful First Principal & Interest Payment
Foremost Development Investment Bank, DLM Capital Group has reinforced its position as a leader in innovative fixed income solutions with the successful payment of the first principal and interest (coupon) to investors under its Sovereign Bond-Backed Composite Notes (“SBCNs”) issuance.
This milestone, alongside the consistent delivery of quarterly performance reports, underscores the Group’s commitment to transparency, capital preservation, and investor confidence.
DLM SPV PLC’s 40.62% Hold-to-Maturity return ₦7.30 billion (Tranche A) and 19.07% ₦1.70 billion (Tranche B) Plain Vanilla Series 1 Notes, issued under its ₦30.00 billion Medium-Term Notes Programme and developed by Sonnie Babatunde Ayere, Group CEO of DLM Capital, was recently listed on the FMDQ Exchange with the Tranche A bond becoming the most valuable AAA-rated corporate bond on the market.
This represents a new class of structured debt instruments designed to meet both issuer funding needs and investor expectations. As a platform widely recognised for supporting innovative debt structures, FMDQ provides an enabling environment for instruments like DLM’s SBCNs to thrive.
At launch in July 2025, DLM SBCNs, which achieved a 9-notch upgrade from BBB- (GCR Sponsor ratings at issuance) without securitisation, entered the market with a healthy degree of skepticism, as is typical with pioneering financial instruments. However, after six months of post-issuance, DLM Funding SPV Plc has delivered on its promise by comfortably and successfully meeting its first principal and coupon obligations to its investors.
This performance milestone has significantly strengthened market confidence and validated the robustness of the structure. The notes are rated AAA by Global Credit Rating and AAA by DataPro Limited, reflecting their strong credit fundamentals and low-risk profile. Designed to prioritise capital preservation, liquidity, and above competitive market returns, the instrument stands out as one of the most compelling corporate fixed income offerings for institutional investors currently available in the market.
Investor response has been notably strong and institutional investors who are beginning to recognize the value of a well-structured de-risked, high-return and, high-quality fixed income investment backed by a credible issuer with a proven track record. The combination of timely coupon payments, high credit ratings, and ongoing transparency has positioned SBCNs as a preferred option for investors seeking stability and performance in today’s evolving financial landscape.
As investor interest continues to build towards Series 2, DLM SBCNs are not only demonstrating resilience but also setting a benchmark for innovation in Nigeria’s debt capital markets. In its role as a Development Investment Bank (“DIB”), DLM Capital Group remains committed to delivering structured solutions that align with investor needs whilst maintaining the highest standards of governance and execution.
Securities and Exchange Commission (SEC) said it has handed a six-week deadline to capital market operators to submit board-approved recapitalisation or license downgrade plans.
The directive was disclosed in the revised minimum capital guidelines issued by the Commission on March 18, 2026.
The Commission stated that all capital market operators must submit their board-approved and comprehensive implementation plans within six weeks of the June 30, 2027, compliance deadline.
“All CMOs are required to submit their recapitalization or downgrade plans within six weeks, with clear timelines and execution strategies.”
“Each plan must detail current capital position, minimum requirements, funding strategy, risk considerations, and governance structure.”
“Operators that fail to provide credible plans risk sanctions, including licence restrictions and regulatory delays under the ISA 2025 framework.”
“Pending applicants are not exempt, and applications older than 12 months will lapse and require fresh filings.”
The Commission added that this directive applies across all categories, including brokers, dealers, fund managers, custodians, exchanges, and digital asset operators, reinforcing the urgency of compliance.
The latest development followed its recent announcement on a sharp increase in minimum capital requirements across the capital market ecosystem, signaling one of the most significant regulatory adjustments in recent years.
Broker-dealers are now required to hold N2 billion, up from N300 million, while dealers must meet N1 billion, compared to the previous N100 million threshold.
On the other hand, Registrars face a new requirement of N2.5 billion, rising from N150 million, and Underwriters and clearing firms are benchmarked at N5 billion, while composite exchanges must now have N10 billion.
The Commission emphasised that the recapitalisation is not a one-time exercise but a long-term structural reform aimed at strengthening market resilience and aligning Nigeria with global standards.
A key feature of the new guidelines is the tightening of what qualifies as regulatory capital, which could significantly impact operators’ effective capital base.
The SEC has narrowed the definition to ensure only high-quality, loss-absorbing capital is recognised.
Recognized capital includes fully paid-up ordinary shares, qualifying irredeemable preference shares, share premium, and retained earnings from audited profits.
Unrealised gains are excluded, ensuring capital reflects actual financial strength.
Disallowed items include revaluation reserves, borrowed funds, shareholder loans, client funds, deferred tax assets, and encumbered capital, while Non-cash capital injections are permitted but must meet strict valuation criteria, including quoted equities, CIS units, government bonds, and eligible OTC-traded securities.
The Commission added that exclusion of debt and quasi-debt instruments underscores the regulator’s focus on enforcing genuine capital adequacy rather than leveraged compliance.
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