The Federal Government has rolled out a fresh set of tax reforms, gazetted after President Bola Tinubu gave his assent in June. On paper, the laws look like a lifeline for small businesses. Companies with turnover below ₦100m and assets under ₦250m will no longer pay corporate tax. That sounds like a good relief, but the real question is whether these new tax laws are a genuine break for small players or a quiet trap for everyone else.
The Sweetener for SMEs
No corporate tax for small firms is a headline move. For the countless small traders, boutiques, agro start-ups and tech hustlers battling with rent, salaries, and unstable power, this exemption is real oxygen. It acknowledges that you can’t tax a business to death and still expect it to grow. Add to this the new 5% annual tax credit for companies in priority sectors, and the package feels like a government finally trying to listen.
The Fine Print That Bites
But step back and the picture shifts. Large companies are told their tax rate may fall from 30% to 25%, but only at the president’s discretion. That’s not policy, that’s politics. Then there’s the “top-up tax” for firms earning ₦50bn locally or €750m globally. For multinationals already grappling with forex scarcity, inflation, and shaky infrastructure, this is another layer of uncertainty. It could scare off the very investors Nigeria claims it wants to attract.
Foreign Currency Trap
The option for companies transacting in foreign currency to pay tax in naira at official rates looks friendly at first glance. But with the wide gap between official and parallel rates, the government is effectively forcing firms into a system where it gains and they bleed. In simple terms, the state wants to eat from both sides of the exchange table.
Politics of “Relief”
The timing of these laws also matters. With elections never far away and public anger over subsidy removal still hot, the government needs a win. Exempting SMEs is a perfect headline. Yet, the deeper structure still bends towards tightening state control over who gets favours and who doesn’t. This is less about building a transparent tax culture and more about consolidating power under the presidency.
Bottom Line
The new tax laws gazetted may read like reform, but reform for who? Small businesses appear shielded, but the middle and upper layers of industry are being squeezed with hidden claws. If the goal was simplicity, this package delivers more discretion than clarity. Relief for SMEs, maybe. For the rest, it could very well be a trap dressed as reform.
