According to a news report on November 27, 2025, FIRS Chairman Zacch Adedeji said under the new tax regime, 95% of Nigerians will pay no tax meaning roughly only 5% will be taxed.
Adedeji said the reform “aims at those at the top of the pyramid,” indicating that the tax burden in the new system will focus on high earners and wealthier individuals.
He also said that as of January 2026, FIRS will undergo a name change (reflecting a broader reform: the agency will be rebranded to Nigeria Revenue Service, NRS).
The “new tax regime” isn’t just a shift in who pays it comes with structural reforms. The reform consolidates several existing tax laws into four new laws: the Nigeria Tax (Fair Taxation) Law, Nigeria Tax Administration Law, Joint Revenue Board (Establishment) Law, and the Nigeria Revenue Service (Establishment) Law — replacing FIRS with NRS.
Under the new framework, many low-income earners and small businesses are to benefit from exemptions or reduced rates. For example, small businesses with turnover below certain thresholds will enjoy 0% corporate income tax.
The reforms also aim to simplify tax administration, eliminate duplicate/ overlapping taxes, and make the system more transparent — which officials hope will encourage better tax compliance and ease of doing business.
Prior to this announcement, FIRS had earlier estimated that only 10–19% of Nigerians actually pay taxes a low compliance rate.
The low rate was cited as one of the motivations behind tax reform: to broaden the tax base, formalize the informal sector, and improve revenue collection.
If implemented as stated, the majority of low-income earners, informal workers, small businesses possibly up to 95% of the population may become tax-exempt or pay minimal taxes, reducing burden on those at the lower end of the income scale.
Meanwhile the policy shifts the tax burden to high‑income earners, profitable companies, and wealthier individuals a push toward progressive taxation.
The reform could encourage compliance, reduce bureaucracy, and make tax administration more transparent which might improve revenue collection without overburdening the average citizen or small business.
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