Executive Chairman of the Nigerian Revenue Service (NRS), Zacch Adedeji, has defended the country’s tax reform framework, addressing concerns about reporting obligations and penalties during an interview on ARISE TV.
President Bola Tinubu signed the new tax laws in June 2025, with some parts taking effect last year and the rest in January 2026. The rollout has sparked controversy amid allegations of changes being made to the original laws.
Adedeji clarified that annual tax filing requirements for individuals and periodic disclosures for corporate entities are statutory obligations under legislation passed by the National Assembly and assented to in June 2025.
The revenue chief explained that individuals who fail to file annual income returns face a ₦100,000 penalty, with an additional ₦50,000 charged for each subsequent month of non-compliance. He described the penalties as measures to encourage voluntary compliance rather than punitive tools, noting similar systems operate in other economies.
Addressing allegations of government intrusion into personal finances, Adedeji said financial reporting thresholds requiring banks to disclose large transactions are existing provisions consistent with financial transparency and anti-money laundering standards. He emphasised that the tax authority can only tax income, profits, and consumption—not savings or capital.
Adedeji rejected claims that the executive arm modified the harmonised tax bills passed by the National Assembly. He stated that only the gazetted version of the law carries legal authority and that the Nigerian Revenue Service’s (mandate is limited to implementing enacted legislation.
On concerns about low-income earners, Adedeji reiterated that individuals earning up to ₦800,000 annually remain exempt from personal income tax. He added that VAT exemptions on basic food items and essential services provide additional relief, shielding more than 95 percent of low-income Nigerians from direct tax exposure.
The chairman described the transition from the Federal Inland Revenue Service to the Nigerian Revenue Service as an institutional upgrade aimed at digitised, intelligence-driven revenue administration. He argued that enhanced reporting obligations are essential for reducing tax evasion and broadening the tax base.
Adedeji maintained that compliance is a civic obligation necessary for economic stability, though he acknowledged ongoing public scepticism about enforcement reach and government spending.
He also eased concerns about payments in dollars, highlighting the technical aspects of tax laws and stressing the importance of understanding the impact of paying in different currencies based on the current exchange rate.
“Now, when they say, computation should be in the currency of transaction, what that means is that if your transaction is in dollar, the tax that you are going to pay will be computed based on that currency. If the transaction is cedi, it should be in that cedi, but in payment, if you have dollar to pay, good. If you don’t have dollar to pay, the law allows you to pay with your currency at current exchange rate. And that is what you see in one of the reforms of Mr. President, the unification of rates. If it has not been unified, that would have been a problem, because if you don’t have that in the provision, which I know is in the same thing that is being passed, in what I had, from National Assembly, is that the transaction will be done in the currency. The computation will be done in the currency of transaction. But when you want to pay, in case you don’t have the dollar, Nigerian currency is naira. You just use the current exchange rate. So, these are technical thing that has nothing to do with alteration.
He explained the implication of paying in dollar, saying it pressures the foreign exchange.
“Let me tell you implication of paying in dollar, it put pressure on foreign exchange, because Nigeria spend in naira. So, if you have computation, and you have to look for dollar to go and pay, and also, when Nigeria wants to spend again, we have to go back to that place. We are distorting the market, which is one of the reasons, one of the things this result reform has done for us”, he concluded.
