The chief executive of Arthur Steven Asset Management Limited, Olatunde Amolegbe, has said Nigeria’s ongoing tax reforms are expected to improve government revenue mobilisation.
Speaking at the Capital Market Correspondents Association of Nigeria 2025 Macroeconomic Review and 2026 Outlook, Amolegbe warned that rising liquidity ahead of elections could introduce new risks to inflation, exchange rate stability and financial markets.
He said fiscal policy in 2025 reflected a decisive shift toward structural reforms “focused on boosting revenue without worsening macroeconomic pressures,” as the government contended with elevated debt servicing costs, persistent fiscal deficits and subdued oil earnings.
According to Amolegbe, the federal government chose to prioritise expanding the tax base, enhancing compliance and strengthening tax administration rather than raising key tax rates.
He said this approach resulted in the passage of the Nigeria Tax Reform Acts and the establishment of the Nigeria Revenue Service, which has been granted stronger digital and enforcement capabilities.
“The success of the 2025 reforms depends on effective implementation, digitalisation, and compliance,” he said, cautioning that “weak enforcement or policy reversals could limit their impact. The 2025 tax reforms have varied impacts across individuals, investors, and corporates, reflecting a balance between revenue mobilisation and economic stability.
“For households, retaining the 7.5 per cent VAT rate, raising the tax-free income threshold, and capping the top personal income tax rate at 25 per cent helped limit the direct tax burden amid high inflation, though indirect costs may arise through higher business prices.
“The reforms mark a shift toward a more structured and predictable tax system, with higher compliance requirements but improved fairness and policy clarity, potentially supporting medium-term investment confidence if consistently implemented,” he stated.
On capital markets, Amolegbe said the reforms carried implications for investors, noting that “new measures reduced after tax returns on some assets,” which could encourage “longer term and more tax efficient investment strategies.”
Looking ahead, he cautioned that pre-election developments could challenge recent gains.
According to the outlook, “elevated liquidity ahead of elections and strategic portfolio adjustments” are expected in 2026 as the country moves closer to the 2027 general elections.
He warned that while increased liquidity could lift equities, it could also “drive sharp market volatility in stocks and forex,” with investors closely monitoring “potential inflation spikes and currency swings.”
On inflation, Amolegbe said price pressures eased in 2025, with headline inflation falling sharply following the rebasing of the consumer price index and continuing to moderate, but cautioned that excess liquidity could reverse the trend if not carefully managed.
