LCCI Urges FG to Get Tax Reform Implementation Right as Nigeria Enters 2026

The Lagos Chamber of Commerce and Industry (LCCI) has warned that the success of Nigeria’s newly signed Tax Reform Act will depend largely on how transparently and effectively it is implemented, stressing that poor execution could undermine economic recovery efforts.

In its 2025 economic review and 2026 outlook, the chamber said the Federal Government must ensure the new tax framework simplifies compliance, eases pressure on productive businesses and expands the tax base without choking growth.

The Tax Reform Act, signed into law in June 2025, harmonises several existing tax laws into a single framework and is expected to take effect on January 1, 2026.

According to the LCCI, the reform represents one of the most significant fiscal shifts in recent years, but its impact will only be felt if implementation is clear, consistent and fair.

“Effective and transparent implementation of the Tax Reform Act is essential to simplify compliance, reduce the burden on productive enterprises, and broaden the tax base without stifling growth,” the President of the chamber, Leye Kupoluyi, said in the statement.

The chamber’s position comes amid public anxiety over the new tax regime, following widespread speculation that the government would begin making automatic deductions from citizens’ bank accounts.

Those concerns were recently addressed by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, who clarified during a television interview that the system is based on self-declaration.

According to Oyedele, “People think that the government will debit their bank accounts from next year, and how they even came up with that, I have no idea. Nobody will debit your account for any amount you transfer. Whether it’s N1bn or N1,000, at the end of the year, you tell the government yourself.”

Assessing the broader economy, the LCCI described Nigeria’s transition into 2026 as one shaped by “tough reforms, economic resilience, and cautious stabilisation.” It noted that while 2025 recorded modest growth recovery, fiscal execution remained constrained, with rising concerns over debt sustainability.

The chamber acknowledged that policy moves such as fuel subsidy removal, foreign exchange liberalisation and aggressive monetary tightening imposed “significant short-term pain on households and businesses,” but said the measures helped restore macroeconomic credibility and rebuild investor confidence.

Economic data reviewed by the LCCI showed that Gross Domestic Product growth strengthened slightly in 2025, with output expanding by 3.98 per cent in the third quarter, driven mainly by the services sector, which now contributes more than half of national output.

It also highlighted Nigeria’s removal from the Financial Action Task Force grey list as a major reputational gain, improving access to international capital markets.

This, the chamber said, was reflected in an oversubscribed Eurobond issuance and a favourable rating by S&P Global.

Despite these gains, the LCCI warned that economic growth remained too weak to significantly improve living standards or reduce poverty.

“This performance remains below Nigeria’s population growth rate, underscoring that current growth is not inclusive,” the statement noted.

On fiscal performance, the chamber criticised the 2025 budget, saying implementation fell short of what was required to stimulate recovery.

By the third quarter of the year, government revenue stood at N18.6tn, representing about 61 per cent of the target, while expenditure reached N24.66tn, or 60 per cent.

Capital spending was described as particularly weak, with only N3.10tn, or 17.7 per cent of the capital budget, released by Q3, a development the LCCI said limited infrastructure delivery and dampened private sector confidence.

The chamber also raised fresh concerns about Nigeria’s rising debt profile, noting that total public debt climbed to about N152.39tn by June 2025, while debt servicing consumed more than 65 per cent of government revenue.

“This severely limits the government’s capacity to fund infrastructure, social services and growth-enhancing investments,” it said, adding that expanding revenue and exercising restraint in borrowing were “non-negotiable.”

According to the LCCI, businesses continued to grapple with multiple challenges in 2025, including high inflation, foreign exchange volatility, insecurity in food-producing areas, unreliable power supply and multiple taxation.

Looking ahead, the chamber urged closer coordination between fiscal and monetary authorities in 2026 to consolidate disinflation and gradually ease interest rates to support private sector credit. It also called for stronger confidence in the foreign exchange market, faster infrastructure delivery through public-private partnerships and policies that intentionally promote inclusive growth.

The LCCI concluded that while 2025 marked a shift from crisis management to cautious stability, Nigeria’s task in 2026 would be to turn reforms into tangible economic benefits for citizens, stressing that stability alone is not enough without broad-based prosperity.