Executive Chairman of the Nigeria Revenue Service (NRS) formerly Federal Inland Revenue Service (FIRS), Mr Zacch Adedeji has explained reasons why food, education, shared transportation, and agriculture were exempted from the value-added tax and the reasons for the name change.
He also described the government’s reforms as the most significant fiscal transformation since independence which , he noted, are designed to ease the burden on citizens and businesses, while improving government revenue collection.
Team@orientabtactualmags.com learned that Mr Zacch Adedeji said this during an interview held to mark his two years in office in Abuja on Monday.
He commended President Bola Tinubu for fulfilling his campaign promise to simplify tax compliance and remove hurdles faced by the taxpayers.
‘With these new laws, food, education, transport, and agriculture will be VAT-free.
The president has fulfilled his promise to make businesses flourish by removing all burdens and hurdles. This is the best thing that has happened to Nigeria’s fiscal ecosystem since 1960’ he said.
Multiple tax laws have been consolidated into a single code and it will become operative in January. The new code reduces the number of tax types to single digits, introduces a simpler framework for individuals and businesses, and provides relief for smaller enterprises. Under the provisions, businesses with annual turnover below N50 million will no longer pay tax, while thresholds for personal income tax have been adjusted to protect low-income earners.
Recall that President Tinubu signed four major bills into law on June 26, 2025—the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Establishment Act, and the Joint Revenue Board Establishment Act.
Collectively known as the Tax Acts quartet, they aim to broaden the tax base, improve compliance, and enhance transparency across all tiers of government.
Mr Adedeji said the reforms are already yielding results as Nigeria’s tax-to-GDP ratio has risen from 10 per cent to 13.5 per cent in just two years, with a target of 18 per cent by 2027. In August, the federation account disbursed a record ₦2tn, with nearly 70 per cent of monthly government allocations now coming from taxes collected by the FIRS.
He also disclosed that improved revenue has helped 30 states to repay ₦1.85 trillion in debts within the past 18 months, while debt servicing costs—previously consuming 90 per cent of government revenue—have dropped to about 50 per cent. External reserves have also grown on the back of stronger fiscal stability.
As part of the changes, the FIRS will be renamed the Nigeria Revenue Service to reflect its role as the central tax authority for all tiers of government, not just the federal level.
‘The word ‘federal’ gave the wrong impression that we only collect for the federal government while in reality, we collect VAT, of which 90 per cent belongs to the states’ he said.
‘The health of the federation account has blossomed greatly, as there are no bogus subsidy claims to deplete the pool’ Adedeji added while noting that the reforms have caused short-term hardship that are just like ‘the pain of a woman in labour’.
Government interventions—such as compressed natural gas buses and crude-for-naira support for local refiners—are already cushioning the effects, with fuel prices showing signs of decline.
He further explained that the consolidated tax law strengthens compliance and curbs evasion by restructuring FIRS operations. Taxpayers are now grouped into small, medium, and large categories, with one-stop shops created for filing and payments.
‘We are service providers to taxpayers rather than just an enforcement agency’ he said.
Reacting to concerns over the issue of petrol tax, Mr Adedeji said only a ministerial order can ‘actuate’ it.
‘It will only take effect if activated by a ministerial order and published in the official gazette’ he submitted while emphasizing the need for taxpayers to support the reforms.
‘When companies are doing well, expanding, and making profits, we will benefit from their growth. Our task is to remove hurdles in their way, and that is what the president has done with these new laws’ he said-Team@orientactualmags.com Do you have any information you wish to share with us? Do you want us to cover your event or programme? Kindly send SMS to 08035023079, 08059100286, 09094171980 or get in touch via orientactualmag@gmail.com. Thank you
