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Basic Ethical Issues in Taxation Under Nigeria’s New Tax Laws

Nigeria’s tax landscape has undergone its most fundamental transformation in decades. The 2025 tax reform package, signed into law in June 2025 and effective from January 2026, represents one of the most ambitious efforts to modernise the country’s tax system in recent history. It comprises four key laws: the Nigeria Tax Act (NTA) , the Nigeria Tax Administration Act (NTAA) , the Nigeria Revenue Service Act (NRSA) , and the Joint Revenue Board Act (JRBA) .

Together, these laws aim to simplify tax administration, reduce legal ambiguity, enhance transparency, strengthen revenue governance, and improve voluntary compliance. However, they have also generated intense controversy, raising profound ethical questions about procedural integrity, coercive enforcement powers, fairness, and the very nature of the social contract between government and citizens.

This guide explores the basic ethical issues in taxation under Nigeria’s new tax laws, examining the principles at stake, the challenges confronting implementation, and best practices for ethical compliance.

The 2025 Tax Reform Framework: A Brief Overview

The Four Pillars of Reform

The 2025 fiscal reform package comprises four key laws that collectively overhaul Nigeria’s tax system:

1. Nigeria Tax Act (NTA) 2025
The substantive charging statute that consolidates federal taxation into a unified legislative framework. Key provisions include:

Progressive personal income tax bands exempting individuals earning up to ₦800,000 annually

Zero-rating of value-added tax on essential goods and services, including food, education, and healthcare

A 15% minimum effective tax rate for multinational enterprises, aligning with global anti-base erosion standards

A 4% Development Levy on assessable profits, replacing several sectoral levies

Taxation of indirect transfers of shares affecting Nigerian companies or assets

A broader, substance-based approach to determining tax residence

2. Nigeria Tax Administration Act (NTAA) 2025
Governs procedural and compliance matters, introducing mandatory electronic invoicing, real-time digital reporting, and enhanced data integration systems. It also formally recognises Tax Agents—persons certified by a professional body to represent taxpayers.

3. Nigeria Revenue Service (Establishment) Act 2025
Dissolves the Federal Inland Revenue Service (see Guardian report on FIRS-NRS transition) and establishes the Nigeria Revenue Service as a more autonomous institution, seeking to professionalise tax administration and insulate revenue collection from political interference.

4. Joint Revenue Board Act (JRBA) 2025
Establishes a unified governance structure for tax administration across federal and state levels.

The Stated Objectives

The reforms rest upon stated objectives of equity and fairness, simplification of tax administration, competitiveness in attracting investment, combating tax avoidance and evasion, revenue generation, and economic growth.

Ethical Principles in Taxation

Before examining the specific ethical issues, it is useful to establish the foundational ethical principles that should govern any tax system.

1. The Social Contract

Taxation is fundamentally a social contract between government and citizens. Citizens pay taxes in exchange for public goods and services—roads, schools, hospitals, security, and infrastructure. As Senator Enyinnaya Abaribe stated (The Guardian): “Every additional naira collected must translate to better roads, better schools, better hospitals and a better life for the Nigerian people. That is the social contract, because revenue without impact is extortion”.

2. Fairness and Vertical Equity

A fair tax system distributes the tax burden according to ability to pay. Those with greater means should contribute proportionally more. The NTA’s exemption of individuals earning ₦800,000 or less reflects this principle of vertical equity—shielding low-income earners from the tax burden.

3. Transparency and Accountability

Taxpayers have a right to understand how tax laws are made, how taxes are collected, and how revenues are spent. Transparency builds trust; opacity breeds suspicion and resistance. As the Catholic Bishops of Ibadan Province emphasised (ACI Africa): “Fairness, transparency, and accountability must govern the conduct of government and the tax authorities in this entire process”.

4. Procedural Legitimacy

Tax laws must be enacted through proper constitutional processes. When the integrity of the legislative process is compromised, the ethical foundation of the entire tax system is undermined.

5. Protection of Taxpayer Rights

Taxpayers should be treated with dignity and respect. Enforcement powers must be proportionate and subject to judicial oversight. Taxpayers should have access to fair appeal mechanisms.

6. Professional Integrity

Tax professionals—accountants, lawyers, and tax consultants—bear an ethical obligation to act with integrity, competence, and honesty. As the Chartered Institute of Taxation of Nigeria (CITN) emphasises (ThisDay Live): “Ethical conduct has become the bedrock of trust. Professionalism is the new benchmark for relevance”.

Key Ethical Issues Under the 2025 Tax Laws

1. Procedural Integrity: The Alleged Alteration Controversy

Perhaps the most fundamental ethical issue surrounding the 2025 tax laws concerns the allegation that the laws were altered after passage by the National Assembly.

The Allegation

In late 2025, members of the House of Representatives raised concerns that discrepancies exist between the tax laws passed by the National Assembly and the versions gazetted and made available to the public. Honourable Abdussamad Dasuki (PDP, Sokoto) raised a matter of privilege (The Guardian), alleging that the gazetted versions were inconsistent with what was approved by both chambers.

The House-passed bill listed five categories of federal taxes, including taxation of petroleum income and Value Added Tax (VAT). Both items were removed from the gazetted Act. Under Section 29, the House version provided for annual returns with reporting thresholds of monthly cumulative ₦50 million for individuals and ₦250 million for companies; the gazetted version replaces this with quarterly returns and lowers the thresholds to ₦25 million and ₦100 million respectively.

New provisions were introduced (Independent.ng), including Section 41(8), requiring a taxpayer dissatisfied with the decision of the Tax Appeal Tribunal to deposit 20 per cent of the disputed amount before appealing to the High Court. Enforcement powers were also expanded.

The Legal Challenge

The controversy has escalated to the ECOWAS Community Court of Justice (The Guardian), where the Network for the Actualisation of Social Growth and Viable Development (NEFGAD) is seeking judicial review of the legislative process. The organisation wants the court to declare the disputed provisions as “unauthorised” and in breach of Nigeria’s obligations under the African Charter on Human and Peoples’ Rights.

The Ethical Dimension

This controversy strikes at the heart of democratic governance. As NEFGAD stated: “This action is not merely administrative or procedural. It is a constitutional issue that strikes at the heart of democratic order, separation of powers, and the rule of law”.

Dr Chris Nwokobia, a legal practitioner, went further, alleging that the law had been “forged” with at least eight major alterations made after passage. He warned that allowing such alterations “undermines the integrity of the legislature” and violates constitutional provisions.

The Counter-Argument

Some commentators argue that differences between early drafts, committee reports, harmonised conference versions, and the final gazetted Act are routine in legislative practice—renumbering, technical refinements, and drafting corrections commonly occur before final passage and assent.

However, this defence does not address the substantive nature of the changes alleged, which go far beyond mere technical refinements.

2. Coercive Enforcement Powers

The new tax laws have been criticised for granting excessive coercive powers to tax authorities.

Arrest Without Court Order

Nwokobia expressed strong concern about provisions that allegedly empower tax authorities to arrest citizens without a court order. He argued that such powers place tax officials above established security institutions: “That means that this taxman is going to have much more power than almost the IG of police”.

20% Deposit Requirement

Section 41(8) of the gazetted Act requires taxpayers to deposit 20 per cent of disputed tax assessments before filing appeals. This provision has been widely criticised as creating a barrier to justice—effectively requiring taxpayers to pay before they can challenge a decision.

Arrest Powers

Section 60 of the tax laws allegedly grants arrest powers to tax officials, raising concerns about the potential for abuse and the weaponisation of taxation for political purposes.

Data Privacy Concerns

The NTA empowers tax authorities to track the income of remote workers and foreign-income earners through international information-sharing arrangements, particularly the Common Reporting Standard (CRS) (BusinessDay). The Federal Government receives financial information on Nigerian residents from over 100 partner countries.

A Memorandum of Understanding signed between the Federal Inland Revenue Service (now Nigeria Revenue Service) and France’s Direction Générale des Finances Publiques has attracted wide public concerns (BusinessDay) about the possibility of abuse of data privacy rights, including loss of economic control, mass data surveillance, digital exploitation, espionage, and geopolitical manipulation.

These powers must be balanced against the constitutional guarantee of privacy and the provisions of the Nigeria Data Protection Act 2023 (BusinessDay).

3. Fairness and the Tax Burden

Taxing the Poor

Peter Obi, former Labour Party presidential candidate, warned that “prosperity cannot be achieved by imposing heavier burdens on poor citizens” (Ripples Nigeria). He argued: “You cannot tax your way out of poverty, you must produce your way out of it”.

Nwokobia similarly questioned the morality of increased taxation in a country where citizens largely provide basic services for themselves: “I provide my electricity. I still pay tax. We provide our security. We still pay tax”.

The Exemption for Low-Income Earners

The NTA does exempt individuals earning ₦800,000 or less annually and provides relief for small businesses with turnover below ₦100 million. However, critics argue that these protections may be insufficient given the broader economic context.

Taxing Religious Institutions

Economist Daramola Omoyele has argued that there are “strong moral and civic arguments” for taxing religious leaders and institutions. This raises questions about the appropriate boundaries of the tax net and the ethical treatment of religious organisations.

4. Professional Responsibility and Ethical Communication

The Role of Professional Bodies

The tax reforms have highlighted the ethical responsibilities of professional bodies in public communication. A recent statement by a professional body alleging that the Nigeria Tax Act 2025 had been altered after passage sparked widespread discussion (The Guardian).

Professional bodies do not merely comment on policy; they help shape it. Their authority and credibility carry societal and economic consequences. As one commentator noted (The Guardian): “Words from such quarters do not simply convey information; they frame debates and produce tangible outcomes. Authority brings responsibility, and responsibility includes an ethical obligation to avoid causing preventable harm”.

The Ethical Concern

The ethical concern extends beyond factual accuracy, because unsubstantiated claims can inflict institutional harm, unsettle markets, and erode public confidence. For a professional body to make allegations without evidence or official confirmation depicts “gross irresponsibility, undermining both public trust and professional credibility”.

The Need for Evidence

Any claim of post-passage alteration must meet an “exceptionally high evidentiary threshold.” Responsible professional communication requires that such claims identify the specific provisions allegedly altered, demonstrate how the text differs from what was passed, and explain when, how, and by whom any changes were introduced.

5. Board Accountability and Tax Governance

The Board’s Fiduciary Duty

Under Nigeria’s Companies and Allied Matters Act (CAMA) 2020, directors owe duties of care and loyalty to the company. While the statute does not specifically mention tax oversight, tax constitutes a material financial and regulatory risk, bringing it within the scope of board responsibility (Nairametrics).

The duty of care requires directors to act with reasonable care, skill, and diligence—which means understanding material tax exposures, ensuring thorough compliance, and seeking expert advice on complex issues.

The Governance Gap

The implementation of the NTA 2025 revealed a major governance gap: some boards had been preparing since mid-2025, while others were still scrambling to understand the changes weeks after they became operational. This raises the question: “Are boards actively monitoring regulatory developments, or are they responding to changes only when compliance deadlines force action?” (Nairametrics).

Tax as a Governance Issue

Tax is a major financial burden and carries reputational, regulatory, and shareholder consequences. The question is whether boards consider it as a finance department issue or acknowledge it as a matter requiring board-level oversight.

Challenges in Implementation

1. Public Trust and Communication

The success of these reforms depends not only on sound policy design but also on public trust, effective communication, and professional engagement. Nigeria’s tax compliance has historically remained below 35 per cent of potential revenue.

The National Association of Nigerian Students (NANS) demanded suspension of the new tax law, arguing that Nigerians are “grossly poorly informed and insufficiently enlightened about the content, scope, breadth, impacts, and long-term implications” of the reforms.

The Catholic Bishops of Ibadan Province have called for transparency and humane implementation (ACI Africa), urging the government to give “the most vulnerable among us the latitude to get used to the new tax regimes before applying the full force of the law”.

2. Institutional Readiness

The transition from the Federal Inland Revenue Service to the Nigeria Revenue Service entails risks of temporary disruption, retraining burdens, and bureaucratic overlap. The introduction of mandatory electronic invoicing, real-time digital reporting, and enhanced data integration systems requires significant infrastructural investment.

3. Legislative and Constitutional Integrity

The alleged alterations to the tax laws have raised serious constitutional and legislative integrity concerns. The controversy has been described as “a serious breach of legislative process and the Constitution”.

4. Economic Impact

The reforms have generated significant economic uncertainty. Restrictions on foreign exchange deductions and the limit on relief for individual taxpayers are among the hurdles that could hinder implementation (BusinessDay).

Best Practices for Ethical Compliance

For Taxpayers and Businesses

1. Understand Your Obligations

The NTA 2025 introduces significant changes, including new tax rates, filing requirements, and compliance obligations. Businesses and individuals must familiarise themselves with these changes.

2. Maintain Accurate Records

The NTAA 2025 introduces mandatory electronic invoicing and real-time digital reporting. Accurate record-keeping is essential for compliance and for defending against potential disputes.

3. Seek Professional Advice

Tax professionals have a critical role to play in interpreting the new laws and helping taxpayers comply. As CITN President Innocent Ohagwa stated (ThisDay Live): “Individuals and businesses are seeking clarity, and they are looking to professionals who can interpret the law with integrity”.

4. Exercise Your Rights

Taxpayers have the right to challenge tax assessments. However, the 20% deposit requirement for appeals means taxpayers should carefully consider their options and seek professional advice.

5. Engage in the Process

Public engagement and civic education are essential for building trust in the tax system. Taxpayers should participate in consultations and provide feedback on implementation challenges.

For Boards and Directors

1. Board-Level Oversight

Tax is a material financial and regulatory risk requiring board-level oversight. Boards must maintain awareness of applicable laws and exercise oversight of risk management systems (Nairametrics).

2. Understand Material Tax Exposures

Directors must understand material tax exposures and their financial implications, ensure thorough compliance, maintain reporting systems, and seek expert advice on complex issues.

3. Articulate Your Effective Tax Rate

Boards of companies meeting statutory thresholds should articulate their effective tax rate, understand what drives it, and evaluate its sustainability.

4. Examine Substance-Based Requirements

The expanded definition of “Nigerian company” requires boards to examine where strategic decisions are actually made across group structures. Assumptions based solely on place of incorporation may no longer be sufficient.

5. Consider Long-Term Sustainability

Tax strategies that generate short-term savings while creating regulatory, reputational, or shareholder risks require careful board scrutiny. The governance question is not simply whether a position is technically defensible, but whether it aligns with the company’s long-term interests and stated values.

For Tax Professionals

1. Uphold Integrity and Competence

As the CITN emphasises (ThisDay Live): “Technical competence is non-negotiable. Ethical conduct has become the bedrock of trust. Professionalism is the new benchmark for relevance”.

2. Act as Ethical Gatekeepers

Tax professionals must act as “ethical gatekeepers within the system”. This means reporting unprofessional behaviour and upholding the highest standards of integrity.

3. Invest in Continuous Learning

Members must familiarise themselves with current tax laws and invest in continuous learning in light of the reforms.

4. Exercise Responsible Communication

Professional bodies bear an ethical obligation to avoid causing preventable harm through unsubstantiated claims. Any allegation of procedural impropriety must meet an “exceptionally high evidentiary threshold” (The Guardian).

5. Embrace Digital Competence

Nigeria’s tax system is moving toward simplification, digitalisation, and better coordination. Professionals who are both ethical and tech-savvy will be best positioned to succeed.

For Government and Tax Authorities

1. Ensure Procedural Integrity

The integrity of the legislative process must be upheld. Allegations of post-passage alteration must be investigated transparently and resolved promptly. As SERAP has urged, there must be accountability for any unlawful alterations.

2. Protect Taxpayer Rights

Enforcement powers must be proportionate and subject to judicial oversight. The 20% deposit requirement for appeals should be reviewed to ensure it does not create an unreasonable barrier to justice.

3. Safeguard Data Privacy

The collection and use of taxpayer data must comply with the Nigeria Data Protection Act 2023 (BusinessDay) and respect constitutional guarantees of privacy.

4. Communicate Clearly

Civic education should continue to ease public anxieties. The government must address misinformation and build public trust through transparent communication.

5. Demonstrate Revenue Impact

Taxation must be tied to measurable improvements in citizens’ welfare. Citizens are more willing to comply when they see value in public spending.

How Qeeva Advisory Steps In

We understand that navigating Nigeria’s new tax laws can be complex. Many businesses struggle to understand their obligations, manage compliance risks, and uphold ethical standards in tax governance.

Our Advisory Services help you understand your tax obligations, develop compliance strategies, and implement systems that ensure ethical tax governance.

Need accurate financial data? Our Bookkeeping Services ensure your financial records are accurate and complete — the foundation for tax compliance.

For businesses looking to strengthen governance, our Business Strategy Consulting Services help you embed tax governance into your strategic decision-making.

Our Risk Management Services help you identify and mitigate tax-related risks, including compliance failures and regulatory penalties.

And because tax compliance is fundamentally about regulatory adherence, our Regulatory Compliance and Corporate Compliance & Annual Returns Filing services keep your business in good standing with tax authorities.

Our Service Methodology

We don’t do generic. We do thorough, transparent, and actionable.

Step 1: Tax Compliance Audit
We review your current tax practices, financial records, and compliance systems. We identify gaps and areas of exposure under the new tax laws.

This step draws on our Advisory Services to identify gaps and opportunities, and our Bookkeeping Services to ensure your financial records are accurate and complete.

Step 2: Ethical Risk Assessment
We assess your tax practices against the ethical principles of fairness, transparency, and procedural legitimacy. We identify areas where your tax practices may expose you to reputational or regulatory risk.

Our Advisory Services team comes into play here, helping you evaluate the ethical dimensions of your tax strategy and identify areas for improvement.

Step 3: Compliance Strategy Development
We develop a comprehensive compliance strategy that balances regulatory obligations with your business objectives.

For this, we lean on our Business Strategy Consulting Services to ensure your compliance strategy is grounded in business reality.

Step 4: Implementation & Training
We help you implement compliance systems and train your team on the new requirements.

Our Advisory Services team ensures successful implementation, while our Regulatory Compliance support ensures you stay on the right side of the law.

Step 5: Ongoing Monitoring & Support
Tax compliance isn’t a one-time exercise. We help you monitor compliance, stay current with regulatory changes, and refine your systems over time.

We keep your financial systems in shape with Bookkeeping Services and ensure you remain compliant with our Corporate Compliance & Annual Returns Filing support.

Key Takeaways

The 2025 tax reforms represent a watershed moment for Nigeria’s fiscal framework. They offer the promise of a more modern, efficient, and equitable tax system. However, they also raise profound ethical questions that must be addressed.

The ethical issues are significant:

Allegations of post-passage alteration threaten the procedural legitimacy of the reforms

Coercive enforcement powers raise concerns about taxpayer rights and potential abuse

Data privacy concerns require careful balancing of revenue needs and individual rights

The tax burden must be distributed fairly, protecting the most vulnerable

Professional bodies bear ethical responsibilities in public communication

Boards must exercise proper oversight of tax governance

The path forward requires:

Transparency and accountability in legislative and administrative processes

Protection of taxpayer rights and data privacy

Fair and proportionate enforcement

Professional integrity and ethical conduct

Public trust through effective communication and visible public impact

The bottom line: As Senator Abaribe stated (The Guardian): “We must change the narrative where taxes are seen as burdens without benefits”. The ethical legitimacy of Nigeria’s tax system depends not only on the letter of the law but on the integrity of its making, the fairness of its application, and the visible impact of its revenues on citizens’ lives.

Let’s Talk About Your Tax Compliance

Navigating Nigeria’s new tax laws can be complex. At Qeeva Advisory, we understand the ethical and compliance challenges businesses face under the 2025 tax reforms. Our team of experienced tax professionals can help you understand your obligations, maintain compliance, and uphold the highest standards of ethical conduct.

Whether you need help with:

Understanding your tax obligations under the NTA 2025

Compliance with the NTAA 2025 reporting requirements

Board-level tax governance and oversight

Tax planning that balances compliance and strategic objectives

Representation in tax disputes and appeals

We’re here to support you every step of the way.

📞 Call us: (+234) 802 320 0801, (+234) 807 576 5799

📧 Email: info@qeeva.com

📍 Visit us: 5, Ishola Bello Close, Off Iyalla Street, Alausa, Ikeja, Lagos, Nigeria

Contact us today to schedule a consultation. Let us help you navigate Nigeria’s new tax landscape with confidence and integrity.