Despite recent tax reform efforts by the Federal Government, manufacturers, small businesses, and industry stakeholders are voicing growing concerns over what they describe as increasing levies and operational burdens threatening economic stability and competitiveness.
Earlier this year, President Bola Tinubu signed four Tax Reform Acts into law—the Nigeria Tax Act, Tax Administration Act, Nigeria Revenue Service Act, and Joint Revenue Board Act. The administration said these laws were designed to simplify tax collection, ease the tax burden on businesses, and spur economic growth. A key feature of the Nigeria Tax Act is its aim to harmonise fragmented tax laws, reduce duplication, and foster a more business-friendly environment.
However, the Manufacturers Association of Nigeria has raised objections to the proposed introduction of a tax stamp system for excisable goods. Segun Ajayi-Kadir, Director General of MAN, said the association is “disturbed” by the possible implementation of such a system.
Ajayi-Kadir acknowledged the government’s intention to combat smuggling and counterfeiting, promote transparency, and boost revenue through the tax stamp initiative. Still, he questioned its effectiveness, warning that, “while the efficacy of this measure is yet to be validated, findings indicate that tax stamps portend significant adverse implications to manufacturers without tangible benefits.”
He added that the policy could undermine the objectives of the 2025 Nigeria Tax Act, which was intended to reduce multiple levies and simplify compliance, particularly for small and medium-sized industries (SMIs). According to him, “the introduction of a tax stamp system risks clawing back these gains, effectively imposing a new ‘hidden tax’ on industries under the guise of compliance.”
Ajayi-Kadir argued that such a measure could increase production costs and discourage local manufacturing. “There is a tendency that the Nigerian market risks an upsurge in illicit trade, which will erode government revenue, harm legitimate businesses, and jeopardize consumer safety,” he warned.
He further stated that the compliance burden would likely be passed onto consumers, intensifying inflationary pressure and pushing buyers toward cheaper, unregulated products. “At a time when households are already grappling with high inflationary pressures, the introduction of tax stamps would push consumers toward cheaper imported alternatives, fuel illicit trade, and risk driving local manufacturers out of the market,” he said.
Highlighting the wider implications, Ajayi-Kadir pointed out that the system could reduce industry competitiveness, especially under the African Continental Free Trade Area (AfCFTA), and lead to job losses, limited reinvestment, and diminished innovation. He called for the government to suspend any plans for implementation until a thorough stakeholder engagement and impact assessment are conducted.
The association also stressed that the policy comes at a time when manufacturers are already struggling with high energy prices, erratic supply, rising excise duties, and inflation, warning that tax stamps could further destabilise the industrial sector.
Meanwhile, the Lagos Chamber of Commerce and Industry (LCCI) expressed concern over the Nigeria Customs Service’s continued enforcement of a four percent Free-on-Board (FOB) levy, despite a formal suspension order from the Minister of Finance. Customs has cited Section 18(1)(a) of the Nigeria Customs Service Act 2023 as legal grounds for continuing the charge.
However, Dr. Chinyere Almona, Director General of LCCI, argued that fiscal authority lies with the Minister of Finance and insisted that “a duly issued ministerial suspension should take immediate effect unless overturned by the National Assembly or a competent court.” She warned that the ongoing levy enforcement was “raising import costs, eroding competitiveness, and undermining investor confidence.”
Almona called on Customs to urgently align its systems with the ministerial directive and issue a public notice confirming compliance. She urged coordination between the Ministry of Finance and the National Assembly to resolve legal ambiguities. “Nigeria’s business community needs policy clarity and institutional coordination to sustain trade, jobs, and economic growth,” she stated.
Also speaking on emerging tax issues, Adetunji Oyebanji, President of the Council of the Chartered Institute of Directors (CoID), voiced concerns about the fairness and implementation of the new tax regime. Addressing stakeholders at a forum themed “A New Tax Regime: Fostering Collaboration for Economic Growth,” he noted that while the reform consolidated some levies into a new development tax, there are doubts about whether it will eliminate multiple taxation at the state and local levels.
“Directors of companies operating across different states are often confronted with a myriad of levies that stifle growth and complicate compliance,” he said, adding that the Joint Revenue Board must be empowered to enforce a truly unified tax collection system.
Oyebanji described a harmonised tax structure as a critical tool to build investor confidence and lower business costs. “We believe that the successful implementation of this new tax regime hinges on an established understanding of its potential impacts on businesses, particularly on small and medium-sized enterprises (SMEs), and on our collective ability to maintain a favourable investment climate,” he noted.
He cautioned that digital compliance systems, like e-invoicing, while promoting transparency, could overburden SMEs due to the cost of digital infrastructure. “Without adequate support, this could drive more firms into informality, undermining the very objective of broadening the tax net,” he warned, urging the government to provide training, financial support, and a grace period for businesses to adjust.
Oyebanji also criticised the recent increase in the corporate Capital Gains Tax (CGT) from 10 to 30 percent, arguing that the timing and scale of the hike could deter capital-intensive investments and discourage corporate restructuring.
Other industry stakeholders echoed similar sentiments, urging the government to strike a balance between revenue generation and business sustainability. They called for greater transparency in how tax revenues are allocated and spent, to build trust and ensure that tax policies support rather than hinder economic growth.
