Tax Reforms Promised Relief, But Multiple Levies Still Kill Businesses

Despite the Federal Government's sweeping tax reforms that began in January 2026, businesses across Nigeria still face multiple taxes, levies and other government collections. The Central Bank of Nigeria's July 2026 Business Expectations Survey found that 70.8% of respondents identified high and multiple taxation as the biggest constraint to business operations, ahead of insecurity and high interest rates.

An investigation based on interviews with business owners, tax experts and revenue officials, as well as a review of tax laws, revenue schedules and payment receipts, found that implementation remains uneven, especially at the sub-national level. Overlapping demands from federal, state and local government agencies, plus contracted revenue collectors, continue to raise operating costs.

Businesses Speak Out

Kuteyi Duro, President of the Association of Food and Agro-allied Processors of Nigeria, said several members have had to endure up to 20 different taxes and levies. One manufacturing firm CEO in Ogun State said, “We don’t argue anymore. Once they come with receipts and threats of sealing our premises, we pay.” Another manufacturing company in Ogun State paid more than 20 different statutory and administrative charges within a year, excluding utility bills. Several businesses requested anonymity, citing fears of reprisals from revenue authorities.

Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said, “Some components of it [tax reforms] need to be domesticated by the states. Not all states have domesticated those aspects of tax reforms that relates to the sub-nationals.” He said multiple taxes, illegal checkpoints and market dues are still being experienced, adding that “unless they are fully on board, those nuisance taxes that you see will take time to disappear.”

Government Response

Dare Adekanmbi, Special Adviser on Media to the Chairman of the Nigeria Revenue Service, said SMEs with annual turnover below N100 million are exempt from taxes collected by the NRS, including VAT. He said, “Any business whose turnover are less than N100,000,000 has no business paying taxes to us as Nigeria Revenue Service, including VAT. So, ask them, what is their turnover let them be truthful. If you can tell me the states where those issues are, I can escalate it to the Joint Revenue Board which is in charge of state governments.”

What The Reforms Were Supposed To Do

The tax reform programme introduced the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act and Joint Revenue Board (Establishment) Act. The objectives included eliminating duplicate taxes, harmonising tax administration, improving compliance, expanding the tax base and reducing the burden on small businesses. The Joint Revenue Board also prohibited the collection of road taxes and levies through checkpoints and banned the use of road stickers by state and non-state actors.

Local Governments And The Grey Area

Tax practitioners say local government levies remain a major weakness. Although states publish approved revenue schedules, enforcement often involves contractors whose methods differ from official policy. Some businesses reported receiving payment demands from multiple local government task forces within weeks. Others said unofficial “development” and “security” levies had become routine costs of doing business with no clear statutory basis.

The Centre for the Promotion of Private Enterprise had warned that Nigeria's tax reforms must be carefully implemented to avoid excessive compliance burdens on the informal sector. Tax experts note that businesses often describe every government payment as a tax, even though some are technically fees or service charges. But when multiple agencies impose similar charges or collect outside their legal mandate, the economic burden remains the same.

The gap between promised reform and on-the-ground collection raises costs for SMEs, feeding into higher prices and job losses. Until state and local governments fully align with the federal reforms, many businesses will keep paying for a tax system that has not yet delivered the relief they were promised.