By Charles Pemu 
In a sweeping reform move, the Nigerian Senate has passed two landmark tax bills — the Nigeria Revenue Service (Establishment) Bill 2025 and the Nigeria Tax Administration Bill 2025 — laying the foundation for a stronger, more transparent tax regime. The bills retain the current 7.5% VAT rate but introduce major structural changes, including the replacement of the Federal Inland Revenue Service with a newly empowered Nigeria Revenue Service (NRS).
The new agency will have expanded powers to enforce compliance, investigate tax fraud, and lead nationwide revenue collection. It will also oversee a revamped Tax Appeal Tribunal and a newly established Tax Ombud Office, aimed at protecting taxpayer rights and ensuring fair dispute resolution.
The revenue-sharing formula allocates VAT proceeds as follows: Federal Government (10%), States (55%), and Local Governments (35%), with consumption states entitled to VAT derivation.