In a statement released on his official X account, President Bola Ahmed Tinubu on Friday unveiled a new Personal Income Tax calculator, designed to help Nigerians estimate their tax obligations under the recently signed tax reforms, which are set to take effect in January 2026.
The digital tool enables individuals to compare their current tax rates with projected obligations under the new framework. According to Tinubu, the reforms aim to create a fairer, more transparent tax system that protects low-income earners and simplifies compliance.
> “A fair tax system must never punish poverty or weigh down the most vulnerable,” the President stated. “With the new tax laws I recently signed, we have lifted this burden and created a path of equity, fairness, and true redistribution in our economy.”
Tinubu explained that the calculator demonstrates how the reforms “protect low-income earners, ensure progressivity, and simplify compliance in order to deliver a transparent system that works for all.”
Reassuring citizens about the broader impact of the reforms, he added: “Together, we are renewing hope in the Nigeria of our dreams. Take a bet on our country. Bet on Nigeria to work for you, your family, and your community.”
Nigeria’s Long Journey of Tax Reforms
LagosExplorer reports that the launch of the calculator comes against the backdrop of Nigeria’s long and often challenging history of tax reforms.
Colonial Foundations
Taxation in Nigeria dates back to the colonial period, with instruments such as the Stamp Duties Proclamation (1903) and Native Revenue Proclamation (1906) introduced by Lord Lugard. These early taxes, often enforced harshly, sparked notable resistance, including the Aba Women’s Riot of 1929 and the Abeokuta Women’s Revolt, both of which protested unfair levies.
Post-Independence Tax Laws
Following independence in 1960, Nigeria established its first modern tax laws: the Personal Income Tax Act (1961), Companies Income Tax Act (1961), and the Petroleum Profits Tax Act (1959). These laws laid the foundation for the tax system still in use today.
Expanding the Base
The 1978 Tax Reform sought to harmonize income tax systems and introduced withholding tax. A major milestone came in 1993 with the creation of Value Added Tax (VAT), replacing the limited sales tax, alongside the introduction of the Education Tax to fund tertiary institutions.
Modernization and Digitalization
In the 2000s, reforms focused on strengthening institutions. The Federal Inland Revenue Service (FIRS) was restructured into an autonomous agency in 2007, and the National Tax Policy of 2012—later reviewed in 2017—emphasized voluntary compliance.
Schemes like VAIDS (Voluntary Assets and Income Declaration Scheme) encouraged disclosure of hidden assets, while successive Finance Acts (2019–2023) updated Nigeria’s tax laws to reflect digital-age realities.
Landmark 2025 Overhaul
The biggest shake-up came in June 2025, when Tinubu signed four new legislations: the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Act, and Joint Revenue Board Act. These laws consolidated tax statutes, expanded taxable categories (including digital assets), and created a Tax Ombudsman to protect taxpayer rights. The FIRS was also reconstituted as the Nigeria Revenue Service (NRS), giving it greater autonomy and efficiency.
These reforms aim to lift Nigeria’s tax-to-GDP ratio from around 10% to 18% by 2026, bringing the country closer to global averages.