Tax reform fails to ease burden as 70.8% of firms cite multiple...

Nigeria’s tax reforms have yet to deliver the promised relief to businesses, with 70.8 per cent of firms identifying high and multiple taxation as their biggest operating constraint, while manufacturers continue to receive visits from different tax authorities demanding various taxes and levies.

The Manufacturers Association of Nigeria (MAN) disclosed this in its Manufacturers’ CEOs Confidence Index (MCCI) for the second quarter of 2026, raising fresh concerns over the implementation of the Nigeria Tax Act 2025 and its ability to eliminate overlapping taxes and regulatory charges confronting businesses.

The development is significant because the Federal Government’s four-part tax reform was designed, among other objectives, to simplify tax administration, eliminate multiple taxation and create a more business-friendly environment.

Yet, manufacturers said the problem persists more than six months after the new tax regime took effect.

MAN ranked multiple taxation as the sixth-largest challenge facing manufacturers in the second quarter, an improvement from second position in the first quarter. Despite the improvement in ranking, however, the association said manufacturers were still being confronted by multiple tax collectors and regulators.

“While the government has enacted the Nigeria Tax Act 2025, which was in part aimed at forestalling multiple taxes and levies, manufacturers complained that they were still met with multiple tax collectors and regulators in Q2 2026,” MAN said.

The association added that manufacturers continued to receive visits from different tax authorities demanding various taxes and levies, indicating that the implementation of the reform had yet to achieve its intended objective.

“The implementation of the Nigeria Tax Act 2025 is yet to achieve its objective of relieving manufacturers of the burden of taxes and levies,” MAN stated.

The manufacturers’ experience is reinforced by the wider business environment captured in the Central Bank of Nigeria’s Business Expectations Survey for July 2026.

According to the CBN survey, 70.8 per cent of respondents identified high and multiple taxation as their most pressing business constraint, putting taxation ahead of other major challenges such as insecurity and high interest rates.

The figure suggests that the problem extends beyond manufacturing and remains a broad constraint on private-sector activity despite the government’s tax overhaul.

For manufacturers, multiple taxation is also coming on top of other major cost and financing pressures.

MAN identified limited access to finance as the sector’s biggest challenge in the second quarter, followed by frequent power outages and inadequate foreign exchange availability. High interest rates and low patronage ranked fourth and fifth respectively, while multiple taxation came sixth.

The combination means manufacturers are contending simultaneously with expensive financing, unreliable electricity, foreign exchange constraints, weak demand and a tax system that the latest reform was expected to simplify.

The persistence of multiple taxation also raises questions about whether the gains expected from the new tax regime can be achieved without stronger coordination among federal, state and local revenue authorities.

The Nigeria Tax Act 2025 was signed into law on June 26, 2025, alongside the Nigeria Tax Administration Act 2025, Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025.

The four laws were subsequently gazetted in September 2025 and became effective from January 1, 2026, marking the beginning of one of Nigeria’s most significant tax-system overhauls in decades.

The reforms were intended to modernise tax administration, improve compliance, broaden revenue collection and reduce the complexity confronting taxpayers.

However, concerns over the potential economic impact of some provisions had emerged before implementation.

The Alliance for Economic Research and Ethics had warned that stronger public expenditure tracking and independent audits would be necessary to ensure that increased tax collection was matched by accountability in public spending.

The organisation also raised concerns over provisions relating to Capital Gains Tax, the Development Levy, Free Trade Zones and the Single Window Trade Platform, arguing that aspects of the reform could affect business profitability, investment and Nigeria’s competitiveness.

The latest complaints from manufacturers therefore point to a critical implementation gap: legislation may have changed, but the experience of businesses on the ground has not changed sufficiently.

For manufacturers, the issue is particularly important because taxes and levies ultimately feed into production costs and can influence the prices of locally manufactured goods.

Where businesses face several revenue agencies, the cost is not limited to the amount of tax paid. Compliance costs, administrative disruptions, regulatory uncertainty and repeated engagements with different authorities can also increase the cost of doing business.

The persistence of the problem could therefore undermine the broader objective of using tax reform to improve Nigeria’s investment climate and strengthen domestic production.

The CBN’s 70.8 per cent figure further suggests that taxation has become a major economy-wide concern rather than an isolated manufacturing-sector complaint.

With businesses already facing high interest rates, infrastructure deficiencies, foreign exchange constraints and weak consumer demand, continued complaints about multiple taxation could place additional pressure on investment and expansion decisions.

The challenge for the Federal Government is consequently shifting from designing the tax reform to ensuring that its implementation produces a single, predictable and coordinated tax environment for businesses.

Unless the multiplicity of collectors and overlapping demands are effectively addressed, the tax reform risks increasing government revenue without delivering the corresponding reduction in the cost and complexity of doing business that manufacturers and other private-sector operators expected.

The latest MAN and CBN findings therefore suggest that the success of Nigeria’s tax reform will ultimately be measured not only by how much revenue government collects, but by whether businesses can operate under a simpler tax system with fewer agencies, fewer levies and lower compliance costs.