Sustaining Nigeria's Economy through Fiscal Policy: An Evaluation of the 2025 Nigeria Tax Act

Abstract

The Nigeria Tax Act 2025 marks the most comprehensive overhaul of Nigeria's tax law in over three decades. Enacted against a backdrop of declining oil revenues, persistent fiscal deficits, and the urgent need to deepen non-oil revenue generation, the Act consolidates into one instrument a statutory landscape that had grown dangerously fragmented over several decades of piecemeal amendment. This article examines the extent to which the Act's reformed regimes — covering Pay-As-You-Earn (PAYE) taxation, Withholding Tax, Company Income Tax, Value Added Tax, International Taxation, and Transfer Pricing — address the structural fiscal weaknesses that have historically hampered Nigeria's economic development. The analysis draws on the text of the Act, relevant constitutional provisions, judicial authority from the Tax Appeal Tribunal and superior courts, and contemporary economic data. The article contends that while the Act represents a serious legislative commitment to fiscal reform, its utility as an instrument of economic sustenance depends ultimately on the quality of its administration, the independence and competence of the revenue authority, and a genuine political will to enforce the law uniformly. The article concludes with specific reform recommendations directed at government, the Federal Inland Revenue Service, and the legislature.