Nigerian businesses are at a crossroads over multiple taxation and overlapping levies despite assurance from the government to address the anomaly. CHIKA OKEKE writes on the urgent need for the regulatory authorities to fix the conflicting issues.
Before Kendo Global Enterprises (not real name) relocated to Abuja, his plan was to set-up his electronics business in one of the city suburbs and possibly display fabrics in another section of his shop.
He eventually rented a shop in one of the plaza’s in Federal Housing Estate Lugbe, Abuja Municipal area Council (AMAC) at the cost of ₦2,300,000 per annum. A breakdown of the rental fee revealed that the shop cost ₦1.5 million, agency and legal fees ₦300,000; caution deposit ₦250,000 and service charge ₦250,000, bringing the total to ₦2.3 million.
Still mapping out plans on how to recover the shop rent within three months, the tax collectors showed up and he was mandated to make payment through a designated account. After three weeks, another set of collectors walked into his shop and demanded for tax.
Within a space of one month, he paid taxes to three different groups, which affected the turnover of his business, wondering why the government cannot resolve conflicting issues bordering on taxation and levies.
Kendo’s plight is synonymous with over 1000 businesses battling for survival, in addition to tough times imposed by President Bola Tinubu”s economic reforms particularly the fuel subsidy removal.
But a further investigation revealed that similar businesses are challenged with multiple taxation, unfriendly business environment and rising hardship.
However, Nigeria’s tax reforms culminated in four major laws that came into full effect on January 1. They are Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Establishment Act and Joint Revenue Board Establishment Act.
Surprisingly, Nigeria marked her independence anniversary as an indivisible entity on October 1, 2026. Sixty-six years down the line, the issue of multiple taxation and overlapping levies keep eating up businesses like a cankerworm.
The Nigeria Development Update (NDU), a biannual World Bank report released in April indicated that double taxation costs Nigerian businesses through reduced profit margins, inflated compliance expenses, and a severe loss of competitive edge against international and regional rivals.
It suggested that the challenge is to consolidate macroeconomic stability and ignite inclusive growth through deeper and wider structural reforms.
Stakeholders have sought more transparent taxation on businesses, pleading with the government to urgently resolve the pitfalls to save Nigerians from intense trauma.
Transparency
The Abuja Chamber of Commerce and Industry (ACCI) is a non-partisan and member-funded organisation representing the interests of the business community in the FCT.
President of ACCI, Chief Emeka Obegolu, SAN noted that taxation must be fair, predictable, transparent and growth-oriented, adding that responsible taxation should expand the tax base by supporting more businesses to formalise and prosper, rather than imposing burdens that weaken already fragile enterprises.
“Our position is clear: Nigeria needs a business environment that enables enterprises to grow, invest and create jobs. A sound tax system must generate the revenue required for public services and national development,” he said.
At the Area Councils level, businesses also encounter various levies and charges, including those administered by the Abuja Municipal Area Council (AMAC) and other relevant authorities.
Obegolu lamented that businesses in the Federal Capital Territory (FCT) are challenged with multiple taxation and overlapping levies imposed by different authorities and agencies.
He stated that businesses, particularly Small and Medium-sized Enterprises (SMEs) often face multiple charges for similar or related activities, as the additional costs increase the burden of compliance, place pressure on already constrained operating margins, discouraging investment and business expansion.
“We recognise the legitimate responsibility of the government at all levels to generate revenue and provide services but there is a need to ensure that the various taxes, rates, fees and levies are properly coordinated, transparent and clearly defined.
While calling for greater harmonisation and coordination of taxes, rates, fees and levies across the FCT, he hinted that there should be a clear framework defining the responsibilities of the respective authorities, eliminating unnecessary duplication and ensuring that businesses are not subjected to multiple charges for the same or substantially similar activities.
He enjoined FCT Administration, the Area Councils and relevant revenue-generating agencies to sustain dialogue with the organised private sector in reviewing the charges and developing a more business-friendly system of collection.
“Where practicable, a single, transparent and predictable payment framework would significantly reduce compliance costs, improve the ease of doing business and encourage more enterprises to formalise, invest and expand.
“Taxation should not become a disincentive to enterprise. Rather, it should serve as a partnership between the government and business, providing the revenue required for development while creating the conditions for businesses to survive, grow and contribute more to the economy.
“When businesses are productive and profitable, the government revenue improves, employment rises, investment increases and the economy becomes more resilient,” he added.
Continuous consultation between the government and organised private sector, reduction and harmonisation of multiple taxes and levies, improved infrastructure, easier access to affordable finance, simplified trade procedures, and stronger support for local manufacturing and export-oriented businesses remain the way forward to resolve the looming disaster.
Unfriendly environment
Manufacturers Association of Nigeria (MAN) protects the interests of manufacturers through advocacy and partnerships with the government, private sector and other stakeholders in the business and manufacturing sector.
The Manufacturers CEO Confidence Index, MCCI, report for the second quarter of 2026, released by the association revealed that manufacturers are contending with poor infrastructure, high production costs, raw material shortages and unfavourable trade policies.
Despite the enactment of the Nigeria Tax Act 2025, manufacturers are challenged over multiple taxation, which experts attributed to unfriendly business environment and corruption.
Director-General of MAN, Segun Ajayi-Kadir harped on the need for more effective implementation of policies aimed at improving the operating environment for the real sector.
He said: “Manufacturers complained that they were still met with multiple tax collectors and regulators in Q2 2026. It follows that the implementation of the Nigeria Tax Act 2025 is yet to achieve its objective of relieving manufacturers of the burden of taxes and levies.”
Nigeria’s business environment remains largely unsupportive of manufacturing growth, with local sourcing of raw materials emerging as the only indicator that recorded noticeable improvement.
The association hinged the improvement on persistent foreign exchange constraints, which forced many manufacturers to source inputs locally but noted that excessive regulation and multiple taxation continue to weigh heavily on manufacturers.
Chairman of MAN, Ikeja Branch, Mr Thomas Osobu requested for consistent and predictable government policies to stimulate investment, productivity and sustainable industrial development, advocating for real changes in the sector.
Osobu informed that manufacturers continued to contend with foreign exchange volatility, rising energy costs, multiple taxation, logistics bottlenecks and an increasingly complex regulatory environment.
He disclosed that well-designed and consistently implemented reforms would attract investment, promote innovation, create jobs, boost exports and strengthen Nigeria’s industrial base.
Until the Small and Medium-sized Enterprises (SMEs) reap the benefits of the new Tax law, the high cost of living may not phase-out soon.
Exemption
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) is a government agency that promotes and supports the growth of Micro, Small, and Medium Enterprises (MSMEs) across the country.
Already, the agency partners with fiscal reform committees to streamline payment processes and reduce administrative hurdles, while pushing for the elimination of multiple levies and overlapping charges imposed across the Federal, State, and Local Governments.
Director General of SMEDAN, Dr Charles Odii sought tax reforms that protect low-income earners and ease the burden on MSMEs, noting that the reforms should exempt nano businesses from onerous tax obligations, eliminate multiple and nuisance levies affecting small traders, and simplify tax compliance.
The need for reforms that protect nano and small businesses from major corporate taxes, and bridge the gap between fiscal policy formulation and the realities faced by MSMEs across the country cannot be overemphasised.
Solidify tax reforms
The Federal Ministry of Finance coordinates and manages Federal revenues, expenditures, and national public finances. However, Nigeria’s tax-to-GDP ratio rose to approximately 13 percent in 2026, up from below 10 percent, a performance linked to fiscal reforms, increased digitalisation and revenue mobilisation.
But in September, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele inaugurated a Technical Subcommittee to solidify Nigeria’s ongoing fiscal policy and tax reforms.
The Ministries of Finance and Justice, Nigeria Revenue Service (NRS), Joint Revenue Board (JRB), Nigeria Customs Service (NCS), SMEDAN, private sector and professional bodies collaborated during the process.
Oyedele disclosed that inputs from the public on the Finance Bill 2027 received 134 submissions from across the six geopolitical zones, encouraging the subcommittee to assess all submissions objectively, based on evidence, national interest and their potential economic impact.
The submissions focused on simplifying tax laws, multiple taxation, digitalisation, data-sharing, taxpayer rights, refunds, small businesses and investment competitiveness.
Oyedele enjoined the members to consider the impact of proposed measures on low-income households, workers, small businesses, women and young people, stating that the subcommittee would review the Deduction of Tax at Source Regulations 2024 against the new tax laws.
The subcommittee would also prepare revised withholding tax regulations and review the Companies Income Tax (Significant Economic Presence) Order 2020.
Oyedele noted that withholding tax is an advance-payment and compliance mechanism, adding that the review would develop an updated framework aligned with new laws and international best practices.
He stated that Nigeria must protect its taxing rights while remaining competitive for technology and cross-border investments, just as he gave the subcommittee six weeks to complete and submit its report.
The Federal Government has pledged the implementation of the Nigeria Tax Act while initiating further fiscal reforms aimed at addressing challenges in the budgeting, reporting and accountability systems. Until it is done, low-income earners and small businesses will not be relieved from decades of corrupt tax practices.
Support businesses
The Nigeria Revenue Service (NRS) is responsible for tax administration, assessment, and revenue collection in Nigeria. Signed into law on June 26, 2025, the essence of the new tax law is to streamline tax processes, phase-out overlapping taxation between the Federal, State, and Local Government Areas while protecting small businesses from tax sharks.
The Executive Chairman of NRS, Dr Zacch Adedeji noted that tax reforms are aimed at supporting businesses and promoting economic growth.
He said: “The technology-driven tax reforms will make compliance easier and create a fairer environment for businesses. The NRS wants businesses to grow, invest, create jobs and generate value. Their success contributes to Nigeria’s economic development.”
Adedeji requested for simplified taxation and improved engagement with businesses to promote economic growth and resilience, adding that the technology was transforming tax administration through platforms such as Rev360 and electronic invoicing, making registration, filing and payment easier.
He encouraged businesses to engage the NRS, noting that the service is willing to listen to their challenges, provide clarity and improve processes affecting them.
Adedeji assured that the service would strengthen systems, reduce revenue leakages and promote a level playing field, while supporting Micro and Small Medium Enterprises (MSMEs) and sustainable economic growth.
Notwithstanding the economic breakthrough, Nigerians are yet to witness the benefits of the government reforms as source of livelihoods diminish daily, leading to alarming poverty and worsening mental health issues.
