LCCI says tax reform bills will boost Nigeria’s trade competitiveness

The Lagos Chamber of Commerce and Industry (LCCI) has commended the federal government for enacting into law four landmark tax reform bills, stating that it will improve Nigeria’s trade competitiveness.

The tax reform bills enacted by the federal government are the Nigeria Tax Bill (Ease of Doing Business), the Nigeria Tax Administration Bill, the Nigeria Revenue Service (establishment) Bill, and the Joint Revenue Board (establishment) Bill.

The chamber, in a statement, signed by Chinyere Almona, director general of LCCI, said that with the introduction of a unified filing system and streamlining state and federal tax processes, businesses could see compliance time fall by up to 40 percent, effectively reducing transaction costs and supporting Nigeria’s export competitiveness under the African Continental Free Trade Area (AfCFTA), noting that a better streamlined tax system is a factor in attracting foreign direct investment (FDI).

The LCCI stated that these reforms, passed after extensive stakeholder consultations, mark a significant milestone in Nigeria’s journey toward a more transparent, efficient, and growth-aligned fiscal framework.

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“From a macroeconomic perspective, the reforms are expected to impact four major areas: inflation, trade competitiveness, tax compliance, and investor confidence. Unifying Nigeria’s complex and fragmented tax laws and the digital and institutional upgrades in the bills give the private sector a better platform to grow and compete,” the LCCI said.

The chamber added that the potential impact of inflation is twofold, and in the short term, as businesses re-price, the broader tax net and initial compliance adjustments may trigger a slight increase in core inflation, estimated between 40–60 basis points.

However, the chamber stated that in the medium term, the reduction of tax inefficiencies and a shift from monetary financing to sustainable revenue should help ease price pressures.

“The government’s fiscal projections anticipate headline inflation falling to 15 percent by end-2026, compared to 27.6 percent in May 2025.

“With essential goods and services now exempt from VAT, we expect this move to ease the cost of living for millions of Nigerians,” the LCCI said.

They also highlighted that tax compliance is another area where the reforms are poised to deliver tangible gains, noting that Nigeria’s tax-to-GDP ratio, currently at 7.9 percent, is among the lowest in sub-Saharan Africa.

The chamber stated that establishing a single taxpayer ID, risk-based audit protocols, time-bound refund mechanisms, and taxpayer protection instruments such as the Office of the Tax Ombudsman should broaden the tax base while reducing the informal sector’s dominance.

With full implementation, the LCCI projected an increase in non-oil tax revenues by N3.2 trillion over the next two years, pushing the tax-to-GDP ratio towards 12 percent by 2027.

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From an investment standpoint, the LCCI said the reforms offer the predictability and transparency that domestic and foreign investors seek.

“Nigeria’s Foreign Direct Investment (FDI) stood at a modest $29.83 million in Q4 2024, highlighting the urgency for reform. These new laws, with their institutional safeguards and digital monitoring platforms, send a strong signal of fiscal discipline and reliability,” the LCCI said, adding that the independence of the emerging Nigerian Revenue Service (NRS), supported by robust performance reporting, will further bolster credibility and reduce the risk premium attached to long-term investments.

The LCCI further urged the immediate rollout of a public-facing implementation roadmap, beginning with pilot e-tax systems in high-volume states such as Lagos, Rivers, and Kano.

“We recognise that passing legislation is only the first step. Successful execution will require close coordination across federal, state, and local governments and robust monitoring and feedback from the private sector.

“The next six months before the full implementation in January 2026 should provide sufficient space for pilot phases and ensure all gears are engaged for optimal performance,” the chamber stated.