Some businesses and traders across the country may be exploiting the newly introduced tax laws to arbitrarily increase the prices of goods and services, according to a report by The PUNCH.

Since the implementation of the new tax laws in January, the Federal Government has consistently stated that the reforms were intended to reduce certain taxes and stimulate economic growth without generating short-term revenue increases.

Despite these assurances, recent developments indicate that some business owners have begun increasing the prices of their goods and services, attributing the hikes to the new tax laws.

The PUNCH gathered that the increases are being imposed through additional Value Added Tax charges and other general price adjustments.

The controversial tax regime became law on June 26 when President Bola Tinubu signed four major tax reform bills, a move the government described as the most significant overhaul of Nigeria’s tax system in decades.

The four laws are the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act and the Joint Revenue Board (Establishment) Act.

All the laws now operate under a single authority known as the Nigeria Revenue Service.

Last December, the NRS stated that the new tax laws were designed to strengthen economic competitiveness, attract investments and improve long-term fiscal stability.

The agency also clarified that the widely debated four per cent development levy on imported goods was not a new or additional tax burden but a streamlined consolidation of several existing levies.

Under the new tax laws, a range of items commonly used by Nigerians have been exempted from VAT payments.

These include basic food items such as rice, beans, vegetables and other unprocessed essentials.

Medical and pharmaceutical products are also exempted, alongside educational books, materials and services.

Electricity generation and transmission services, non-oil exports and agricultural inputs are equally exempt under the new regime.

Other VAT-exempt items include diesel, petrol and solar power equipment.

Rents and goods intended for humanitarian projects are also excluded from VAT payments.

Additionally, companies with an annual turnover below N100m are exempt from charging VAT entirely.

However, findings reveal that despite these exemptions, business owners, traders and small and medium-sized enterprises in different parts of the country are exploiting the new tax laws to make extra gains on products and services.

In separate interviews with correspondents, some business owners, retailers and traders confirmed sharp increases in prices, citing the need to accommodate fresh tax payments.

A business owner who identified herself simply as Yemisi said the implementation of the tax laws had forced her to increase prices to cover tax obligations.

She noted that failure to adjust prices could negatively affect her business by the end of the year.

Yemisi described the tax and VAT regime as challenging for small-scale registered businesses, stressing that it had impacted revenue and income.

She said, “We have started increasing prices to accommodate the tax reforms. If we don’t do that, business owners may end up without any gains.

“Clothes we used to buy for N8,000 now cost N10,000, while items that sold for N15,000 are now sold for between N17,000 and N20,000.”

Similarly, a trader, Ramat Owolabi, said goods supplied by wholesalers had become more expensive in the market.

She explained that the prices of products had been increased, noting that the hikes were linked to the new tax regime.

Owolabi said, “We don’t even understand what is happening in the market this year. What we bought at cheaper prices last December have skyrocketed this year by between 10 and 20 per cent.

“Is it the tax that has affected the prices of products? This isn’t understandable. We hope we get clarity on this.”

The PUNCH also gathered that some car dealers were adding extra charges to the prices of vehicles.

Speaking with The PUNCH, a top car dealer in Lagos, who requested anonymity, said the practice was driven by extreme carefulness regarding the new tax laws.

He said, “Everybody is trying to be careful with this new tax rule so that, at the end of the year, you will not pay for what you did not eat.”

He explained that many dealers sell vehicles on commission basis.

“Most times, it is people who give us cars to sell. It is after selling that we collect our commission,” he said.

He further stated, “Imagine after I have collected a commission of N2,000 on a car sold, then they bring a tax of N20,000 for me to pay at the end of the year on just that single car. Where do you expect me to get the money to balance the tax payment?” he queried.

Explaining how the tax reform has altered business practices, he said dealers now calculate VAT upfront.

“Before, we didn’t do this, but now it is a must. If somebody wants to buy a car now, we will first calculate the VAT on the car price and add it to the amount the buyer will pay. That’s the new rule now. We just want to be very careful with the new law,” he said.

Since the beginning of the year, Nigerians have also taken to X to complain about suspected extortions by small-scale firms and street traders, which they attributed to the new tax laws.

In a post on Tuesday, Ohikizi, with the handle @Kings75431077, wrote, “Literally, everything in Nigeria has skyrocketed in price because of the new tax reform. A kilo of chicken from 6,000 to 6,600; N100 charges on POS for N5,000 is now N150. Buy N10,000 fuel, they charge you N500.”

On the same day, a social media blog on X identified as Gist with Denok shared a video of a lady who narrated her experience at Ileyan, a popular restaurant with outlets in Lagos, Abuja and Ibadan.

According to her, the restaurant charged an additional N23,000 as 7.5 per cent VAT and five per cent consumption tax on a N181,000 meal.

The receipt displayed in the video showed that about N9,000 was charged as consumption tax, while roughly N13,000 was deducted as VAT.

“I don’t understand Tinubu’s policies at all. We went to Ileyan to eat and our bill was N181,000, but to our surprise we were asked to pay an extra N23,000. That is 7.5 per cent VAT and five per cent consumption tax. In the end, we paid N203,625. Nigerians, is this how we are going to be paying when we buy and sell?” the lady said.

Last Friday, another viral post emerged on X in which Nigerian social media influencer Rita Ushie, popularly known as Raye, shared a payment receipt.

The receipt showed that N487,500 was added to her N6.5m partial payment for a tech startup project as a 7.5 per cent VAT charge, sparking widespread discussions online.

On the same day, a user identified as Stringer, with the handle @dcryptosailor, wrote on X, “Saw a woman today on my street who said she was charged extra N500 at the market where she went to buy things worth around N10,000 because of the new tax law, and she was telling other shop owners to start adding money. I shook my head and then started explaining to them.”

Speaking with The PUNCH, a trader who asked not to be named said the newly implemented tax laws had increased deductions on routine financial transactions.

He said that despite the new laws not stipulating VAT charges on savings interest, over N4,000 was deducted from his PiggyVest savings.

“I invested N250,000 for one year on PiggyVest, and when I withdrew my money, I was charged N4,125.14 as Value Added Tax,” he said.

“This is money I already struggled to save, and the deduction came simply because of the new tax law.”

Efforts to obtain reactions from the Manufacturers Association of Nigeria and the Nigerian Labour Congress were unsuccessful.

Their spokespersons did not pick calls or respond to text and WhatsApp messages sent to their telephone lines as of press time.

Commenting on the issue, the President of the Association of Small Business Owners of Nigeria, Femi Egbesola, said increasing prices under the guise of tax compliance was wrong and unfair.

Egbesola said, “I am not aware if such is happening, but if it is, it is very wrong because they are expected to pay taxes from their profit and not to extort the masses. That is more or less extortion and it also shows in a large way that they are not really aware of the intent of the government and the tax laws.

“If they are aware, they will know that the more money they make, the more taxes they will pay. Even though they increase the costs of their products, it will result in the fact that they will pay more taxes.”

He added that small businesses should be exempted from compliance initially to allow for proper understanding of the new tax laws.

An economist, Dr Aliyu Ilias, said the government must go beyond introducing reforms and ensure effective monitoring and enforcement.

He urged the Nigeria Revenue Service to investigate the matter and sanction offenders.

According to him, failure to enforce the reforms would have negative consequences for Nigerians.

Ilias said, “Government should go beyond bringing a reform. They should also ensure the reforms they are bringing are checked. The NRS should look into the matter and bring such business owners to book. If they don’t do this it will bring negative effects to the generality of Nigerians.”

In an interview with The PUNCH, the Special Adviser on Media to the Executive Chairman of the Nigeria Revenue Service, Mr Dare Adekanmbi, said the tax laws did not introduce new taxes or increase existing rates.

“It thus goes without saying that there can be no justification for any increase in the prices of taxable goods and services because of the new tax laws,” Adekanmbi said.

He described business owners increasing prices as unpatriotic.

“The tax reform brings relief to Nigerians in key areas where they spend a greater percentage of their income.

“It also provides a lot of benefits for low-income earners as well as small businesses,” he added.