The federal government has defended the recently enacted tax laws, describing them not as additional burdens but as reforms designed to simplify Nigeria’s tax system, remove overlapping levies, and strengthen investor confidence.

The Nigeria Tax Act and Nigeria Tax Administration Act have sparked nationwide debate, with some citizens expressing concerns over their potential impact on businesses.

Tax authorities, however, maintain that the reforms have been widely misinterpreted, emphasizing that the laws aim to modernize tax administration, improve transparency, and boost revenue generation without hindering economic growth.

The Technical Assistant on Broadcast Media to the Executive Chairman of the Federal Inland Revenue Service ,
Arabinrin Atoyebi, clarified that the four per cent Development Levy does not represent an additional charge.

She explained that the levy merges several existing levies—including the Tertiary Education Tax, NITDA Levy, NASENI Levy, and Police Trust Fund Levy—into a single, transparent payment.

Atoyebi added that this consolidation will simplify compliance, minimize duplication, and offer greater predictability for businesses that previously contended with multiple agency collections.

She further noted that small and non-resident companies are exempt, emphasizing that the law seeks to protect vulnerable businesses while ensuring fairness.

Atoyebi also dismissed claims that Free Trade Zone (FTZ) incentives had been removed, clarifying that all existing benefits remain in place. New guidelines, she explained, are intended to encourage FTZ companies to focus on export-oriented production rather than domestic sales.

Under the reforms, FTZ firms may sell up to 25 per cent of their output locally without losing exemptions, and a three-year transition period has been provided to help investors adapt. She added that the changes align Nigeria’s FTZ operations with global best practices seen in countries like the UAE and Malaysia.

“The reforms are not about raising taxes; they are about making the system more efficient and growth-oriented,” Atoyebi said.

She added that the laws are designed to boost investor confidence, strengthen public finances, and create a stable environment for sustained economic growth.