Dr. Zacch Adedeji, the chairman of the Nigeria Revenue Service (NRS), stated Wednesday that the nation does not yet have a system in place for taxing business owners in the unorganized sector of the economy.
According to Adedeji, current tax laws were created to tax the formal economy.
The chairman of the NRS discussed the new tax laws’ implementation with the Editorial Board in Abuja.
He claimed that encouraging informal enterprises to formalize their activities was the only way to tax them.
“You cannot tax what is informal on the informal sector,” Adedeji stated. They are known as casual because of this. They must be formalized before you can tax them. Motivate them to sign up and develop. They can be taxed appropriately once they are formal and fall within the appropriate categories.
“Education and participation will go on.” In order to customize solutions, we have divisions dedicated to media, engagement, and stakeholder relations. Our mission is to support small businesses so they can expand or, at the very least, survive.
Adedeji went on to explain that impoverished Nigerians were not subject to the Value Added Tax (VAT), despite rumors to the contrary. He claimed that it was actually a consumption tax with exemptions.
He stated that the Nigeria Tax Administration Act (NTAA) 2025 was designed to alleviate the tax burden on the impoverished. He added that the new tax system has made sure that only profits or income are taxed, not capital or investments.
He said that although the new tax changes had improved accountability, capability, and clarity in tax administration, technology and procedures had also made sure that revenue collection was more closely monitored.
Less than 10 percent of people worldwide pay taxes, he claims. “The poor are not subject to VAT,” he continued.
No company will be shut down for violation under his government, he declared.
“I have to help you grow if I want revenue to grow,” Adedeji declared. I am not here to stifle companies. I’m not a police officer or a bandit hunter. I resemble a farmer who prunes a tree to increase fruit production.
Because of this, audits are now a component of operations. Tax officers collaborate with auditors. I’ve advised them to never close a business because today’s lost revenues cannot be made up. There is nothing to tax if a business is not profitable.
“To help, explain, and support businesses, we now have tax service partners in every operation.”
He went on to explain that the tax credit program was discontinued by his government because it was abused and “because it turned tax authorities into project supervisors, which we are not equipped to be.”
He stated that tax credits were outside the purview of NRS and that the agency lacked the necessary expertise to evaluate the projects.
Additionally, he stated that while the federal government had provided states with more funding, tax reforms pertaining to VAT continued to be among the most important of the initiatives.
The head of NRS further clarified that the federal government decided not to impose VAT on food and agricultural products in order to control food inflation and lower food prices.
The largest obstacle to the implementation of tax reforms, according to Adedeji, is still information, but the administration will keep listening and addressing new issues.
“Trust is essential,” he stated. First, people need to think that the government is not aiming to make life more difficult. That knowledge is the cornerstone.
“We don’t say we’re flawless. The largest problem at the moment is information, particularly in a setting like ours.
“We pay attention. We will make adjustments where something isn’t working. We are here because of this.
The head of NRS stated, “Tax compliance is the law,” on tax accountability and compliance. It’s not a choice. People in the other nations you named may have to pay up to 40% of their income in taxes. Benefits don’t precede compliance.
“We need to consider whether we are prepared for the Nigeria we discuss.” We made significant investments in education and skill development over the past three years to help graduates find employment. Accountability is a must.
“The use of tax funds is the responsibility of government officials. It’s understandable that people are now raising questions. It is no longer acceptable to take citizens for granted.
“Trust takes time everywhere, not just in Nigeria,” said Adedeji. For this reason, we put more emphasis on practical application than just explanations. People can clearly see that we are fulfilling our promises.
“We welcome suggestions. Although this method won’t be flawless, we’ll keep making adjustments. The rule of law and transparency are unavoidable. Everything needs to be open, I’ve informed my employees.
Adedeji also discussed tax deductions and non-remittance.
He revealed that revenue agencies will now claim operating costs rather than collection costs under the consolidated law, emphasizing that the government should be able to finance its agencies.
He claimed that individual bank account balances could not be taxed, among other reasons.
“Let me explain why it is hard to do that now,” he stated. One deductible expense is salary. Evidence of tax remittance is the only way to demonstrate that salaries were paid. Thus, the system is self-controlling.
Agencies were collecting taxes on their own, which was one of the reasons we harmonized the law regarding the expense of collection. These expenses became operating costs when we consolidated. The government has a responsibility to finance its agencies.
“I merely collect money; I don’t create it. It’s my responsibility to make sure people and companies succeed. Revenue flows naturally when they do effectively.
“Creating a favorable workplace increases revenue, not harassment. We therefore prioritize economic prosperity.
“Your asset is your bank account.” Your bank balance is not subject to taxation. Having money in your account does not guarantee a profit.
