Running a small business in Nigeria has long felt like climbing a steep hill with weights tied to your feet. Multiple levies, confusing tax demands, and inconsistent enforcement have pushed many entrepreneurs into informality, where growth is stifled, and survival is the only goal.
This June, however, the federal government unveiled sweeping tax reforms it claims will lighten the load. Instead of focusing on extracting more from already strained enterprises, the new system attempts to remove hurdles and create breathing space for small firms.
A System Reset
At the heart of the reform is a package of laws that replaces Nigeria’s fragmented tax framework with a more unified structure. The Nigeria Revenue Service is taking over from the old Federal Inland Revenue Service, with a renewed mandate to simplify processes and restore trust in tax administration.
For the first time, the government has written into law broad exemptions for the smallest players in the economy. Micro and small businesses beneath certain income and asset thresholds are no longer obliged to pay corporate taxes or capital gains tax.
Why It Matters
More than 97 percent of businesses in Nigeria fall into the informal or small-scale category. By lifting their tax burden, policymakers hope these enterprises can channel resources into scaling up — hiring more staff, formalising operations, and even attracting investment. For many entrepreneurs, this could mean the difference between staying stuck in survival mode and finally building lasting companies.
The Unanswered Questions
Still, legislation alone cannot guarantee transformation. Infrastructure gaps, credit inaccessibility, and policy inconsistency continue to choke small businesses. Without addressing these underlying problems, tax relief might be little more than a bandage on a deep wound.
A Glimpse of Possibility
Yet, the reforms hint at a shift in mindset: government is beginning to see small businesses not merely as revenue sources, but as vital engines of economic development. If followed through with accountability and complementary support, this new tax era could mark the beginning of a healthier relationship between Nigerian entrepreneurs and the state.
