Independent Media and Policy Initiative (IMPI) has said that the tax reforms which have since come into operation are bound to improve Nigeria’s economic buoyancy in 2026 and beyond.
In a statement signed by its Chairman Dr Omoniyi Akinsiju, the think tank insisted that the country’s revenue mobilization drive would receive a major boost across the different sectors of the economy.
It said: “The tax reforms, which took effect on January 1, 2026, are projected to improve Nigeria’s tax mobilization. The federation’s revenue is expected to strengthen further, driven by the phased implementation of tax reforms, tighter compliance enforcement, expanded use of digital revenue systems, and improved remittance discipline across revenue-generating agencies.
“In addition, Nigeria’s tax reforms will redefine how manufacturers operate, invest, and plan for growth. The law signals a clear policy shift towards a more coordinated and incentive-driven fiscal environment, particularly for the manufacturing sector.
“At the centre of the reforms are the newly-introduced Economic Development Tax Incentives targeting priority sectors such as manufacturing. Under the scheme, eligible companies can obtain an Economic Development Incentive Certificate, granting a five percent annual tax credit on qualifying capital expenditure for up to five years.
“Firms that reinvest profits may access longer incentive periods, while some manufacturing-related transactions are exempt from stamp duties. The incentives are intended to tilt investment decisions in favour of local production and industrial expansion, particularly at a time when manufacturers are under pressure from import costs and foreign exchange volatility. These hold strong momentum potentials for increased production and productivity growth in 2026.
“Beyond incentives, the Tax Acts revise capital allowance rules, providing clearer guidance on how manufacturers can claim deductions on plant, machinery, and industrial buildings. This could ease pressure on cash flow by allowing businesses to recover capital costs more quickly during the early stages of operation or expansion and further encourage increased PPE acquisition across sector.
“The Acts also introduce research and development deductions. It permits manufacturers to deduct up to 5 percent of turnover from taxable profits where spending is linked to innovation. This provision could encourage product development and technology upgrades, areas where many local manufacturers have historically lagged behind, due to funding constraints.
“Another production bolstering factor is the clearer rules on input VAT credits, which are expected to reduce disputes and prevent the accumulation of unrecoverable taxes on raw materials and capital equipment with manufacturers operating within the agriculture and agro-processing value chain standing to gain further advantages.
“These include income tax exemptions for the first five years of operation, zero-rated VAT on selected inputs such as animal feeds and fertilizers, and duty-free importation of machinery for agricultural production. Taken together, the measures could strengthen margins and free up resources for expansion, workforce development, and technology investment, improving the competitiveness of locally-made goods.”
IMPI reiterated that the new tax laws would eliminate nuisance taxes as well as several pro-poor provisions that would put more funds in the pockets of Nigerians.
“Key pro-poor provisions in the tax laws include full exemption from Personal Income Tax (PIT) for individuals earning ₦800,000 or less annually (covering minimum wage earners); progressive taxation shifting more burden to higher earners; elimination of numerous “nuisance taxes” that disproportionately affected small businesses and low-income households as well as expanded reliefs, such as increased tax-free compensation for job loss or injury (from ₦10 million to ₦50 million) and incentives for agriculture and small enterprises.
“These changes will harmonize levies, reduce multiple taxation, boost revenue without borrowing dependency, and stimulate economic growth,” it added.
