NIGERIA'S TAX REFORM HAS MADE INVESTMENT INCENTIVES TRANSPARENT FOR THE FIRST TIME — FIRS CONFIRMS

Tax Expenditure Statement published; SMEs can now see and apply for incentives previously available only to well-connected firms

 Nigeria's sweeping 2025 tax reform legislation has produced one of its most consequential but least-publicised changes: a Tax Expenditure Statement that publicly documents, for the first time, every tax exemption, waiver, and incentive the Federal Government extends to businesses and sectors across the economy.

The Federal Inland Revenue Service confirmed this week that the statement, a requirement under the new tax reform framework, represents Nigeria's first systematic public disclosure of tax incentives, transforming what had previously been a non-transparent system in which access to exemptions depended heavily on institutional connections into a documented, queryable public record.

The implications for small and medium businesses are direct. Under the previous system, large corporates with government relationships secured tax exemptions that SMEs did not know existed and could not navigate. The published Tax Expenditure Statement lists the full range of available incentives, including sector-specific, export-oriented, and investment-based reliefs, and the eligibility criteria for each.

The new framework also introduced presumptive tax for small businesses, simplified compliance processes, and consolidated multiple levies that had previously created unpredictable tax burdens for SMEs. The FIRS has confirmed that the reform's primary goal was to expand the tax base, not raise rates, and that the net outcome would reduce compliance costs for structured, documented businesses.

Crucially, the tax reforms also clarify the boundary between federal and sub-national taxation, which had been one of the most disruptive sources of multiple taxation for SMEs operating across state lines.