The Manufacturers Association of Nigeria and the Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, Taiwo Oyedele, have noted that the newly enacted tax laws were designed to help Nigerian businesses recover, regain competitiveness, and expand from the domestic market into regional markets, following years of distortion caused by multiple taxation and policy inconsistencies.
Speaking at MAN’s hybrid stakeholders’ engagement in Lagos titled ‘Legislative Assembly to Factory Floor: What the New Tax Laws Mean for Nigerian Manufacturers’, on Thursday, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, Oyedele, said the old tax regime had made Nigerian manufacturers uncompetitive even within their own country.
Oyedele noted that the new laws are targeted at restoring competitiveness, starting from the local market. “Today, you can manufacture in Nigeria and imported alternatives will still land cheaper, even after freight, insurance, and duties. What it means is that even in our own market, we are struggling to compete.
“We want our businesses to compete first locally, then within the region, especially under the African Continental Free Trade Area,” he said, warning that Nigeria risked losing jobs and investments to neighbouring countries if reforms were not undertaken.
He asserted that the system was “broken”, noting that manufacturers faced disproportionately higher effective tax rates due to a mix of legal and illegal levies imposed by state and non-state actors.
Oyedele said, “We were taxing capital. We were taxing investments. We have one of the highest tax burdens on corporate profits in the world here in Nigeria. Manufacturers, more than any other sector, had to deal with a multiplicity of taxes everywhere they turned, and even legal taxes were being collected illegally. This was not working for us, and it wasn’t going to work.”
He explained that the reforms were anchored on economic growth rather than punitive taxation, stressing that expanding business output would ultimately yield more revenue for the government. “If the government provides the enabling environment and businesses grow, even at a lower tax rate, the government will make much more money. This is how every country that is doing well has developed,” Oyedele said.
The tax czar added that the reforms also addressed fiscal equity, tax evasion, and policy distortions, including abuses within free trade zones. He said, “Free zones are intended to produce for export, not to sell into the domestic market and compete with companies paying full taxes. That is not a level playing field.” He disclosed that the laws aimed to reduce total taxes and levies across all tiers of government to single digits, building on long-standing complaints by MAN over excessive taxation.
He noted that while some nuisance taxes were embedded in the Constitution, the committee has sent proposals to the National Assembly to remove them as part of ongoing constitutional amendments. Oyedele also said the reforms respected constitutional limits by encouraging states to domesticate harmonised tax laws rather than imposing federal directives, adding that several states had already begun passing aligned legislation.
The President of MAN, Francis Meshioye, urged state governments to fully domesticate and enforce the new tax laws, describing it as being in their own economic interest. “It will provide a new business environment in terms of tax reform and give more confidence in government policy. When businesses do more, governments will earn more from a larger volume of activity rather than higher rates,” he said.
Meshioye added that a supportive tax environment would unlock multiple benefits, including employment generation, higher output and stronger value chains across manufacturing and services. “It is a win-win. The more viable the business environment, the more revenue the government will generate from expanded economic activities,” he said.
Additionally, the Director-General of MAN, Segun Ajayi-Kadir, stated that the success of the reform depended on full alignment by sub-national governments. He said, “We are happy that at least 10 states have passed laws fully aligned with the federal framework. This will help eliminate nuisance taxes and illegal collection practices that have long been the bane of manufacturers.”
Ajayi-Kadir said the voluntary domestication of the laws by states signalled progress, adding that the reforms would be meaningless without sub-national buy-in. “Now that states are passing these laws on their own, it bodes well for manufacturers and for the sustainability of the tax reform agenda,” he said.
