Game-Changer for Small Businesses: How Nigeria’s New Tax Reform Could Spark Real Growth

 Nigeria has taken a bold step toward modernizing its economic framework with the signing of four significant tax reform bills by President Bola Tinubu. Beyond just fiscal restructuring, this move signals a renewed commitment to building a more inclusive and growth-oriented economy particularly for Micro, Small, and Medium Enterprises (MSMEs), which remain the backbone of job creation in Nigeria.

For too long, MSMEs have operated under the weight of multiple taxes, inconsistent levies, and burdensome regulatory processes that often discourage growth and formalization. With the new reforms—set to take effect from January 2026 the government is centralizing tax administration, simplifying the tax structure, and introducing clearer exemptions for small businesses. Companies earning ₦50 million or less annually are now exempt from several key taxes, while individuals earning below ₦800,000 monthly are also free from personal income tax obligations. This creates a friendlier operating environment for small business owners and entry-level professionals, giving them room to thrive.

This reform is not just about reducing taxes; it is about unlocking the full potential of MSMEs to drive sustainable economic growth. When small businesses are relieved from the pressure of multiple levies and complex compliance requirements, they are more likely to reinvest, expand their operations, and hire more workers. This, in turn, feeds directly into the heart of SDG 8, which calls for decent work and economic growth for all.

SDG 8 emphasises the need to promote inclusive and sustainable economic growth, productive employment, and decent work. By targeting MSMEs which account for the majority of employment in Nigeria,this tax reform directly supports that vision. A more equitable tax system not only enhances formalisation but also enables MSMEs to access credit, scale innovations, and contribute meaningfully to national productivity.

However, the real test lies in implementation. Reforming laws is one step; ensuring transparent, digitised, and user-friendly systems is another. As we applaud the intent of this policy, we must also keep watch over its rollout to ensure that MSMEs can truly experience its benefits. Stakeholders must be engaged, tax authorities retrained, and entrepreneurs properly educated about what these changes mean.

If well-executed, this reform could become a cornerstone in Nigeria’s journey toward building a resilient economy where small businesses flourish and decent jobs are not a privilege but a standard. For those of you working with MSMEs, development, or policy, this is an opportunity to align your strategies with this new wave of economic thinking and play an active role in shaping a better future.