Tinubu: New Tax Laws Take Off January 1, CBN Projects $51.04bn External Reserves

• President says ready to work with N’Assembly to resolve pending issues

•Apex bank sees inflation at 12.94%, growth to accelerate to 4.49%

• Forecasts 34.68% increase in public debt, deficit of N12.14 trillion

•Nigeria recorded $4.60bn surplus in Q3, diaspora remittances peaked at $5.24bn

• PDP alleges president prioritising money, not citizens in push for new tax start date

Deji Elumoye, Chuks Okocha, Emmanuel Addeh, James Emejo in Abuja and Nume Ekeghe, Funmi Ogundare  in Lagos

President Bola Tinubu, for the umpteenth time, disclosed yesterday that the new tax regulations would take effect as planned from January 1, 2026.

His declaration came despite criticism from opposition political parties and other concerned groups.

Also, the Central Bank of Nigeria (CBN) has projected a stronger macroeconomic outlook for the country, forecasting a significant growth in external reserves to $51.04 billion in the 2026 fiscal year.

Besides, the apex bank set the real Gross Domestic Product (GDP) growth at 4.49 per cent, and predicted a further moderation in inflation to an annual average of 12.94 per cent next year.

But reacting to the President’s remarks, the Peoples Democratic Party (PDP) reiterated its earlier call for the suspension of the commencement date of the Tax Act based on alleged discrepancies between the harmonised and gazetted versions of the new Tax Act.

The opposition party accused Tinubu of pushing ahead with the new laws’ implementation date primarily to boost government revenue, rather than protect the interests of ordinary Nigerians.

Also yesterday, the Chairman of the Presidential Fiscal Policy and Tax Reform Committee, Mr. Taiwo Oyedele, called on Nigerian universities to take a leading role in the successful implementation of the Tax Reform Act 2025.

However, Tinubu in a statement also gave an assurance that his administration will be willing to work with the National Assembly to quickly resolve all issues identified in the cause of implementing the new tax laws.

There were allegations that the reform documents signed by the President into law in June had been doctored and differed from what the National Assembly had passed.

But the President, in an eight-paragraph statement titled, “New Tax Laws Will Commence On January 1, 2026 As Planned”, stated, inter alia: “The new tax laws, including those that took effect on June 26, 2025, and the remaining acts scheduled to commence on January 1, 2026, will continue as planned.

“These reforms are a once-in-a-generation opportunity to build a fair, competitive, and robust fiscal foundation for our country.

“The tax laws are not designed to raise taxes, but rather to support a structural reset, drive harmonisation, and protect dignity while strengthening the social contract.

“I urge all stakeholders to support the implementation phase, which is now firmly in the delivery stage.

“Our administration is aware of the public discourse surrounding alleged changes to some provisions of the recently enacted tax laws.

“No substantial issue has been established that warrants a disruption of the reform process. Absolute trust is built over time through making the right decisions, not through premature, reactive measures.

“I emphasise our administration’s unwavering commitment to due process and the integrity of enacted laws. The Presidency pledges to work with the National Assembly to ensure the swift resolution of any issue identified.

“I assure all Nigerians that the Federal Government will continue to act in the overriding public interest to ensure a tax system that supports prosperity and shared responsibility.”

However, the PDP reiterated its earlier call for the suspension of the commencement date of the Tax Act, based on the alleged discrepancies between the harmonised and gazetted versions of the new Tax Act.

In a statement by the National Publicity Secretary, PDP, Ini Ememobong, the opposition party stated: ‘’Nigerians have demanded a thorough investigation of this anomaly and sought to know who carried out the illegal insertion and how it was done.”

According to Ememobong, ‘’Rather than address these issues comprehensively, the Presidency has consciously minimised them and instead vehemently insisted that the commencement date must stand, despite the discrepancies.

‘’This disposition clearly shows where the priority of the government lies-between Nigerians and money. This Tinubu Presidency has always prioritised finance over the welfare and well-being of Nigerians from its inception in 2023, as evidenced by the reckless way it announced and implemented the removal of subsidy, which immediately impacted the economy of the country and caused ordinary Nigerians to suffer irreparable economic damage.

‘’In this instance, the President should remember that he is an employee of the people and, therefore, should listen to his employers.

‘’He should also remember that he won with less than 40 percent of the votes in the elections that gave him the job, and should therefore recognise that listening to Nigerians must be a primary duty of his administration, rather than serving the narrow interests of people around him. Mr President is reminded that a responsible PDP administration in 2012 listened to the cries of Nigerians and civil society organisations (where he played a prominent role during the protests) against the removal of fuel subsidy, in deference to the voices of Nigerians.

‘’The interest of Nigerians must be uppermost in the mind of the President and the Federal Government,’’ the PDP stated.

Furthermore, the PDP stated: “We reiterate our earlier call for the suspension of the commencement date of the Tax Act, pending the conclusion of a thorough investigation. Obedience to laws in a democracy is directly linked to the belief that elected legislators have deliberated upon and approved them.

‘’A mere suspicion, let alone a confirmed fact, that unapproved sections have been smuggled into a law with the capacity to affect all Nigerians is sufficient reason to suspend its commencement. The President must act in favour of the people of this country; to do otherwise is a clear confirmation that money, not the people, is the priority.’’

In the meantime, Taiwo Oyedele has called on Nigerian universities to take a leading role in the successful implementation of the Tax Reform Act 2025.

He stated that academia was central to public understanding, compliance, and long-term sustainability of the reforms.

Oyedele made the call at a virtual one-day discussion on the ‘Nigerian Tax Law and You,’  organised by  Babcock Business School, Ilisan-Remo, Ogun State, in collaboration with the Federal Government  Fiscal Policy and Tax Reform Committee.

In his presentation titled, ‘Nigeria Tax Reforms 2025: Implications for the Academia and Small Businesses,’ he outlined the implications of the new tax regime for universities, academic staff, and the broader education sector.

He noted that the Tax Reform Act represents a structural reset of Nigeria’s tax system, which for decades had been weighed down by complexity, excessive discretion, weak alignment with global standards, and an unfair burden on low-income earners and small enterprises.

“These weaknesses eroded trust, discouraged compliance and limited the effectiveness of taxation as a tool for growth.

“The reforms are not about raising taxes but about fixing the architecture of the system to make it fairer, simpler, and more productive,” Oyedele said.

Focusing on academia, he said universities occupy a unique position as employers, centres of learning and drivers of thought leadership, adding that that the reforms would bring greater clarity to personal income tax obligations for academic and non-academic staff, potentially increasing disposable income, while exemptions and zero-rating of basic consumption items such as food, health and education would further improve quality of life.

Oyedele disclosed that the new tax framework provides additional tax reliefs for education and education providers, clearer rules distinguishing not-for-profit academic activities from commercial operations, and new incentives aimed at promoting research and development within universities and tertiary institutions.

Beyond compliance, the chairman stressed that universities have a broader responsibility to engage with the reforms intellectually and practically. In addition, he urged academic institutions to teach the new tax laws accurately, interrogate them critically, generate evidence-based feedback, and help train the next generation of tax professionals, administrators and policymakers.

“Tax reform that is not understood is not likely to succeed, and at the centre of this understanding is academia,” he stated.

He also advised university administrators to begin early preparation by reviewing internal governance structures, payroll systems, and the separation of exempt and commercial activities, noting that failure to do so could complicate compliance under the new framework.

Oyedele further encouraged academics and professionals to help translate policy into practice, support public understanding and hold the government accountable, describing tax reform as a collective responsibility rather than an adversarial process.

He concluded that the Tax Reform Act 2025 presents a rare opportunity to build a fair, competitive and resilient fiscal system for Nigeria, adding that its success would ultimately be judged by how well it is understood, implemented and the positive impact it has on the lives and wellbeing of Nigerians.

Earlier in his remarks, Vice-Chancellor of Babcock University, Prof. Afolarin Olatunde Ojewole, described Nigeria’s ongoing tax reforms as timely and necessary.

He argued that the restructuring of the tax system was critical to reducing the burden on vulnerable citizens while ensuring that the wealthy pay their fair share for national development.

Ojewole stated that the forum was the second in a series championed by the university, following an earlier physical session held in Lagos that attracted over 300 participants from across the country.

He noted that the tax reform debate had become a dominant national conversation, extending beyond policy circles into homes and boardrooms, underscoring its significance to Nigeria’s economic future.

According to the VC, the reforms are apt in a country that, despite its vast natural and human endowments, continues to struggle with revenue generation and relies heavily on domestic and external borrowing to finance annual budgets.

“Nigeria has remained poor while borrowing year after year, sometimes borrowing wisely and, at other times, borrowing unwisely. This reform seeks to progressively restructure our resources,” Ojewole said.

He explained that the proposed tax reforms are designed to reduce the tax burden on the vast majority of vulnerable Nigerians, while requiring greater contributions from the very rich and high-net-worth individuals who, according to him, have benefited disproportionately from the economy.

He described this approach as consistent with global best practices in progressive economies, where the wealthy are taxed more effectively to support national development and social equity.

He said Babcock University, through its business school, decided to partner with the federal government as part of its community service mandate by providing a platform for informed dialogue on the reforms. According to him, the university aims to bring together scholars, policymakers, and stakeholders to interrogate the laws, deepen public understanding, and address citizens’ concerns with evidence-based advice to the government.

Also speaking, the Head of School, Babcock Business School, Prof. Rufus Ishola Akintoye, reaffirmed the institution’s commitment to national development, describing its engagement with Nigeria’s tax reform process as part of a broader mandate to give back to society through informed policy dialogue.

He noted that the engagement reflects the institution’s vision of contributing meaningfully to Nigeria’s socio-economic transformation.

According to him, Babcock University was positioning itself for another era of greatness by deliberately aligning academic excellence with community development and national policy conversations.

“As part of our university commitment to community development, we are not just collaborating with the presidential fiscal policy and tax reform committee; we are fulfilling our institutional mandate to give back to our community and the nation,” he stated.

Akintoye commended Oyedele for his dedication to driving public understanding of the reforms, describing his nationwide engagements as a demonstration of selfless service to the country.

“We truly appreciate the good work you are doing for this nation. You have made yourself available at all times to address the many issues and concerns running through the minds of Nigerians,” he said.

The head of school noted that the tax reform conversation has generated widespread interest and concern across the country, making it imperative for academic institutions to provide platforms for clarity, enlightenment and constructive engagement.

Meanwhile, the Central Bank of Nigeria (CBN) has projected a stronger macroeconomic outlook for the country, forecasting a significant growth in external reserves to $51.04 billion in the 2026 fiscal year.

Besides, the apex bank set the real Gross Domestic Product (GDP) growth at 4.49 per cent, and predicted a further moderation in inflation to an annual average of 12.94 per cent next year.

The projections were contained in the CBN’s latest Macroeconomic Outlook for Nigeria, published on its official website yesterday, where it reiterated that recent policy reforms will begin to yield more durable macroeconomic stability.

In another development, Nigeria recorded an overall Balance of Payments (BOP) surplus of $4.60 billion in the third quarter of the year (Q3 2025), the CBN further disclosed.

The performance marked a turnaround from the deficit position in the preceding quarter, the bank added.

The improvement was supported by a sustained current account surplus of $3.42 billion, further aided by stronger trade performance, resilient remittance inflows, increased financial flows, and continued accretion to external reserves, according to a statement by CBN acting  Director, Corporate Communications, Mrs. Hakama Sidi Ali.

However, according to the central bank outlook, headline inflation is expected to remain on a downward path after peaking in the previous year, supported by improving supply-side conditions and enhanced coordination between monetary and fiscal authorities.

THISDAY recalls that inflation, which climbed to 34.8 per cent in December last year, has since eased following a rebasing exercise, standing at 14.45 per cent in November, based on latest data from the National Bureau of Statistics (NBS).

In the report, the CBN said the inflation outlook was anchored on sustained stability in the foreign exchange and energy markets, alongside the lagged effects of earlier interest rate hikes, which are expected to continue dampening demand-side pressures.

On the external position, the outlook pointed to a gradual strengthening of Nigeria’s buffers, as inflows improve and pressure on the foreign exchange market eases.

“The external reserves is projected at $51.04 billion in 2026, compared with $45.01 billion in 2025. The external reserves is expected to be boosted by reduced pressure in the FX market based on the anticipated rise in oil earnings, sovereign bond issuance, and diaspora remittance inflow.

“Additionally, Dangote refinery’s expansion of its nameplate capacity to 700,000 bpd from 650,000 bpd in 2025 and eventually to 1.4 million bpd in the medium term would further support the growth in external reserves,” the outlook stated.

Commenting on the report the CBN Governor, Olayemi Cardoso, said the moderation in inflation would provide the foundation for a more rules-based monetary policy regime over the medium term.

“Inflation, though still elevated, is projected to moderate further to 12.94 per cent in 2026, reflecting the combined impact of easing food and energy prices, as well as the lagged effects of the bank’s monetary policy tightening cycle.

“The expected continuation of the disinflationary trend will provide a firm basis for the bank’s gradual transition to a full-fledged inflation-targeting framework. Likewise, the exchange rate is projected to remain broadly stable, supported by rising diaspora remittances, higher oil receipts, and strong investor confidence. The bank remains committed to discharging its mandate in a manner that balances the objectives of price stability and sustainable economic growth,” he said.

With improvements in external buffers and a more stable foreign exchange environment, factors the CBN considers critical for investor confidence, the bank said it expects economic growth to accelerate to 4.49 per cent in 2026, from an estimated 3.89 per cent in 2025.

Cardoso added that the growth outlook reflected expectations of broader-based expansion across the economy, particularly outside the oil sector.

“The domestic economy is projected to expand by 4.49 per cent in 2026, from an estimated 3.89 per cent in 2025. The outlook reflects expectations of continued expansion in key non-oil sectors, improved crude oil production, and sustained stability in the macroeconomic environment.

“These factors, supported by ongoing structural reforms and prudent policy management, are anticipated to strengthen productive capacity, enhance investor confidence, and consolidate the foundation for inclusive and resilient growth,” he added.

Beyond growth and inflation, the CBN also addressed fiscal sustainability concerns, projecting that Nigeria’s public debt burden would remain within manageable limits despite continued borrowing.

“The public debt is anticipated to remain on a sustainable path in 2026. It is projected at 34.68 per cent of GDP by end-2026 compared with 33.98 per cent at end-June 2025. The development is predicated on expected new borrowings, as discretionary fiscal policy actions remain a major driver of debt dynamics. The revaluation effect on public debt, which dominated debt dynamics in 2023–2025, is expected to narrow in 2026 owing to exchange rate stability,” the apex bank said.

Besides, the report projected average oil production of 1.71 million barrels per day, reflecting expectations of improved security around oil assets and better operational efficiency, an assumption that underpins both the growth and external balance outlook for 2026.

Themed: “Consolidating Macroeconomic Stability amid Global Uncertainty”, the CBN  projected improved activity in the non-oil sector, although it noted that structural constraints persist.

The document stressed the need for harmonised fiscal and monetary policies, institutional reforms and tailored guidelines to sustain investor confidence and economic momentum, highlighting the importance of maintaining orthodox monetary policy and continued reforms in the foreign exchange market to ensure price and exchange rate stability.

According to the CBN, the fiscal space in Nigeria improved in 2025 due to ongoing reforms, stable crude oil prices and domestic production, as total public debt stood at 33.98 per cent of GDP at the end of June 2025, with domestic debt accounting for 52.86 per cent and external debt 47.14 per cent.

Besides, the external sector recorded a balance of payments surplus of an estimated $5.80 billion in 2025, it said, supported by higher reserves, which rose to about $45.01 billion from $40.19 billion in 2024.

The CBN said retained revenue and expenditure for 2026 are projected at N35.51 trillion and N47.64 trillion respectively, resulting in a provisional deficit of N12.14 trillion, equivalent to 3.01 per cent of GDP.

However, the report listed some likely risks, including possible resurgence in inflation if fiscal spending rises sharply or if global financial conditions deteriorate, triggering capital reversals and exchange rate volatility.

In the same vein, it cautioned that adverse weather conditions, disruptions to crude oil production, geopolitical tensions and renewed protectionist trade policies could weaken growth and external balances.

Furthermore, it noted that a significant rise in non-performing loans could weaken banks’ balance sheets, while concentration risks from recapitalisation could lead to investor fatigue and crowd out other issuers.

“Various downside risks could impact the economic outlook for 2026. For instance, if the projected deceleration in inflation is not attained, the monetary easing could be discontinued, thereby lowering growth prospects.

“While the ongoing reforms are expected to boost productivity, stimulate private sector activity, and support a more competitive and diversified economy, the realisation of these gains could be lower than expected, as high cost of doing business, poor infrastructure, and insecurity could undermine business operations. Cost-saving measures by businesses may heighten the risk of unemployment, further narrow the formal sector, and constrain growth.

“In the event of unfavourable climatic conditions, the ensuing shocks may lead to the destruction of crops, disruption of businesses and transportation services, thereby dampening growth prospects in 2026.

“In addition, negative shocks to crude oil production owing to force majeure and unanticipated security breaches around oil installations could reduce expected crude oil output, thereby constraining growth,” it added.

Meanwhile, the CBN acting director said the apex bank said the goods account remained in surplus at $4.94 billion, reflecting higher export earnings during the period.

Crude oil exports rose to $8.45 billion, while exports of refined petroleum products increased by 44 per cent to $2.29 billion, indicating further progress in domestic refining capacity and Nigeria’s gradual transition from a net importer to a net exporter of refined petroleum products.

Total goods exports stood at $15.24 billion, while imports of refined petroleum products declined by 12.7 per cent, resulting in an improved trade balance.

Workers’ remittances also remained strong, with the secondary income account recording a surplus of $5.50 billion, including $5.24 billion in remittance inflows from Nigerians in the diaspora.

According to CBN data, developments in the financial account further supported the overall BOP outcome, with the country posting a net lending position of $0.32 billion.

Foreign direct investment inflows rose to $0.72 billion, while portfolio investment inflows remained robust at $2.51 billion, reflecting improved investor sentiment and continued non-resident participation in domestic financial instruments.

The country’s external reserves increased to $42.77 billion at end-September 2025, up from $37.81 billion at end-June, thereby strengthening Nigeria’s external buffers, the statement added.

According to the CBN, the Q3 2025 BOP outcome underscored strengthening external sector fundamentals, firmer investor confidence, and the continued impact of reforms in the foreign exchange market, monetary policy implementation, and the domestic energy sector.