The International Monetary Fund (IMF) has urged Nigeria and other major African economies to strengthen fiscal, monetary and governance reforms as part of efforts to improve economic stability and promote broader-based growth.

In its assessment of reform priorities across eight of the African Union’s largest economies, the IMF identified fiscal reform as a key priority in all but one of the countries reviewed. For Nigeria, the areas highlighted include tax policy, revenue collection, public financial management and more efficient government spending.

The Fund also identified improvements to monetary policy frameworks and policy transmission as priorities for Nigeria, Egypt and Ethiopia. In Nigeria’s case, it said governance reforms should include stronger fiscal transparency, better public financial management and improved anti-corruption measures.

The IMF said stronger domestic revenue mobilisation and more transparent and efficient public spending would help African economies build more resilient institutions. It argued that stronger fiscal and monetary frameworks can support sustainable and inclusive economic growth.

Nigeria’s tax reform agenda

The recommendations come as the Federal Government continues to implement a wide-ranging reform of Nigeria’s tax system. The new framework, which took effect in January 2026, is built around the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act and Joint Revenue Board (Establishment) Act.

The reforms are intended to simplify tax administration, remove overlapping taxes, improve compliance and broaden government revenue. They are also designed to reduce the regulatory and tax burden on smaller businesses.

However, businesses continue to cite taxation as a major operating challenge. The Central Bank of Nigeria’s July 2026 Business Expectations Survey found that 70.8 per cent of respondents identified high and multiple taxation as their biggest constraint, ahead of insecurity and high interest rates.

For the housing and construction sectors, the quality of fiscal policy has direct implications. Developers, contractors and property businesses operate within a wider environment shaped by taxation, public infrastructure spending, interest rates and access to finance. Changes that improve tax administration while reducing unnecessary duplication could affect project costs and investment decisions.

Monetary policy remains a concern

The IMF’s call for stronger monetary policy frameworks follows an aggressive tightening cycle by the Central Bank of Nigeria (CBN) in recent years.

After Olayemi Cardoso became CBN governor in 2023, the bank pursued tighter monetary and liquidity conditions alongside foreign exchange reforms. The measures were aimed at addressing inflationary pressures, strengthening market confidence and improving macroeconomic stability.

The Monetary Policy Rate stood at 18.75 per cent in 2023 before the CBN began raising it in 2024. The benchmark rate increased to 22.75 per cent in February 2024 and eventually reached 27.5 per cent by the end of that year.

The CBN also increased banks’ Cash Reserve Ratio from 32.5 per cent to 45 per cent in early 2024 and later to 50 per cent as part of efforts to reduce excess liquidity.

The policy environment has since moved towards gradual easing as inflationary pressures moderated and economic conditions improved. Presidential aide Tope Fasua has nevertheless argued that the country should reconsider its tight monetary stance, warning that persistently high interest rates could restrict economic expansion without delivering the desired reduction in inflation.

Financing risks and infrastructure

The IMF’s concerns also extend to Nigeria’s approach to sovereign financing. In June, the Fund cautioned the country over plans to raise as much as $5 billion through a derivatives-based financing arrangement with First Abu Dhabi Bank.

The IMF warned that such structures can expose governments to significant risks because their terms may be difficult to evaluate fully.

The Federal Government has also secured about $1.2 billion in financing from the United Arab Emirates for construction of a major section of the Lagos–Calabar Coastal Highway.

Infrastructure financing remains important to Nigeria’s wider development prospects because transport networks and public investment influence access to housing, construction activity, land values and the expansion of urban centres.

For Nigeria, the IMF’s recommendations therefore extend beyond macroeconomic indicators. Stronger public finances, effective monetary policy, transparent governance and disciplined infrastructure financing can shape the operating environment for businesses and determine how effectively public resources support economic and urban development.

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Professionals in Nigeria’s built environment sector have urged town planning consultants to take advantage of incentives contained in the new Nigerian Tax Act while strengthening record-keeping and compliance practices.

The call was made during the 2026 Annual General Meeting of the Lagos branch of the Association of Town Planning Consultants of Nigeria (ATOPCON), where stakeholders examined the implications of recent tax reforms on professional practice.

Experts Highlight Tax Implications for Planning Consultants

Speaking at the event, professional accountant and tax administrator, Mrs. Olufunlola Adediran, advised practitioners to fully understand both the responsibilities and opportunities introduced by the new legal framework.

Delivering a presentation titled “The Nigeria Tax Act, 2025: The Impact on Town Planning Consultancy Services,” she explained that town planners operate within sectors directly influenced by tax regulations, including property development, infrastructure delivery, government contracts, and consultancy services.

According to her, areas affected include Value Added Tax (VAT), withholding tax, Companies Income Tax (CIT), Personal Income Tax, development levies, capital allowances, and stamp duties.

“We are advising town planners to familiarise themselves with the provisions of the new tax law, the obligations and the incentives,” she said.

Small Firms May Benefit from Tax Relief

Adediran noted that taxable services for town planning professionals include layout preparation, environmental impact assessments, urban renewal projects, zoning activities, regularisation processes, training programmes, and seminars.

She added that many small-scale planning firms could benefit significantly from provisions under the new law.

According to her, firms with annual turnover below N100 million may qualify for exemption from Companies Income Tax under Section 56 of the Nigeria Tax Act 2025.

She further noted that consultants involved in land documentation, property transactions, and government contracts could also benefit from certain stamp duty exemptions.

Experts Warn Against Poor Tax Practices

Adediran warned practitioners against mixing personal finances with business income, stating that proper financial separation improves compliance and may reduce tax burdens.

She also cautioned that failure to meet tax obligations under the new framework could trigger automatic penalties.

“The government is the sleeping partner of every business because taxes ultimately support public infrastructure and development,” she said.

ATOPCON Calls for Innovation and Continuous Learning

Chairman of ATOPCON Lagos branch, Bello Akinwale, said the session was designed to help members understand the impact of tax reforms on consultancy operations and avoid costly compliance mistakes.

He encouraged practitioners to embrace continuous learning to remain competitive.

Past President of ATOPCON and Chairman of the occasion, Waheed Kadiri, also stressed the need for stronger business sustainability models in the profession.

According to him, consultancy firms must adapt to changing economic realities through strategic planning, innovation, and stronger collaboration.

“We must embrace innovation, strengthen technical capacity, adopt emerging technologies, and build stronger collaboration among professionals,” Kadiri said.

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Filing season in 2026 will come with tighter scrutiny as new provisions under the Nigeria Tax Act (NTA) and the Nigeria Tax Administration Act (NTAA) reshape how companies calculate liabilities, submit returns, and maintain documentation.

For businesses, compliance can no longer rely on legacy bookkeeping practices. Here are five key provisions shaping corporate tax filings in 2026.

1. 15% Minimum Effective Tax Rate and Top-Up Tax

Section 57(1)(a) of the NTA introduces a minimum effective tax rate of 15 percent for certain large domestic companies and multinational enterprises.

If a company’s effective tax rate falls below 15 percent due to incentives or capital allowances, it must pay a top-up tax.

Section 57(2) applies to:

• Companies with ₦50 billion or more in turnover

• Multinational groups with aggregate turnover of £750 million or equivalent

Covered taxes include:

• Company Income Tax

• Petroleum Profits Tax

• Hydrocarbon Taxes

• 4% Development Levy

• Priority Sector Tax Credits

The rate is measured against net income in audited financial statements, excluding franked investment income and unrealised gains or losses.

Importantly, Section 6(3) extends the rule to foreign subsidiaries. If a non-resident subsidiary pays less than 15 percent tax abroad, the Nigerian parent company must settle the difference locally.

What this means:
Businesses must maintain clear records of profits, deductions, tax payments, and subsidiary contributions to demonstrate compliance and reduce audit risks.

2. Monthly Reporting and Digital Compliance

Under Sections 18, 20, and 21 of the NTAA, companies must now file monthly returns for specific revenue types, including:

• Royalties

• Activities of non-resident companies

• Certain sector-specific revenues

The reforms also expand digital reporting obligations.

Impact on businesses:
Companies in petroleum, mining, shipping, fintech, and foreign-linked operations must maintain detailed monthly records of cash flows and revenue streams. Electronic documentation that is easily retrievable will be critical.

3. Capital Gains Now Aligned with Company Income Tax

Capital gains from asset disposals are now aligned more closely with corporate income tax provisions.

This affects companies disposing of:

• Land and property

• Shares and securities

• Other capital assets

Businesses must retain documentation on acquisition cost, improvement expenses, incidental costs, and sale proceeds to properly compute gains.

Proper valuation worksheets and audit trails will be essential to support exemptions or relief claims.

4. Digital and Virtual Assets Brought into Tax Net

The NTA now recognises digital and virtual assets as taxable sources of income and gains.

This includes:

• Digital service transactions

• Virtual asset service providers

• Cryptocurrency-related activities

• Online revenue streams

Companies operating in fintech, e-commerce, cloud services, and digital payments must maintain detailed transaction logs showing:

• Dates

• Counterparties

• Transaction values

An integrated electronic filing system will simplify reporting and reduce compliance gaps.

5. Stricter VAT Documentation Rules

While VAT remains at 7.5 percent, the updated framework allows businesses to recover input VAT on services and capital assets.

However, stricter documentation requirements now apply.

To claim input VAT, companies must retain:

• Valid VAT invoices

• Contracts

• Payment vouchers

• Proof of payment

Zero-rating for exports and essential goods requires additional documentation such as:

• Bills of lading

• Export contracts

• Statutory declarations

• Evidence goods left Nigeria

Properly organised records — digital or physical — will reduce disputes with tax authorities.

Compliance in 2026: No Room for Old Assumptions

Preparing tax returns in 2026 demands more than traditional bookkeeping. Companies must proactively review:

• Effective tax rate calculations

• Monthly reporting systems

• Subsidiary tax structures

• VAT input documentation

• Digital asset transaction logs

Businesses that adjust early to the evolving framework under the Nigeria Tax Act and Nigeria Tax Administration Act will be better positioned to file accurate returns and withstand regulatory scrutiny.

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The Federal Inland Revenue Service has clarified that the controversial 4% Development Levy introduced under Nigeria’s new tax reforms is not a new tax, but a consolidation of multiple existing charges aimed at simplifying compliance and improving economic competitiveness.

The Federal Inland Revenue Service has moved to calm public concerns over the newly enacted Nigeria Tax Act and Nigeria Tax Administration Act, insisting that the 4% Development Levy being widely debated is not an additional burden on businesses.

In a statement issued on Tuesday, the agency said the levy merely merges several pre-existing payments—including the Tertiary Education Tax, NITDA Levy, NASENI Levy and Police Trust Fund Levy—into a single, predictable charge. According to the FIRS, this consolidation eliminates multiple agency-level collections, reduces compliance costs, and offers clearer fiscal planning for businesses.

The tax agency said the reform is part of a broader strategy to make Nigeria’s business environment more competitive, while providing long-term fiscal stability and restoring investor confidence.

It added that small businesses and non-resident companies remain exempt, ensuring that vulnerable enterprises are not exposed to additional financial pressure.

Tax analysts say the 4% levy reflects a global push for clearer and more coordinated tax structures. “The consolidation sends a signal to investors that Nigeria is moving away from fragmented, unpredictable levies and toward a modern tax regime,” a Lagos-based analyst told our correspondent.

Amid speculation that the government was rolling back Free Trade Zone incentives, the FIRS clarified that FTZs retain their tax-exempt status. Under the new law, FTZ companies may sell up to 25% of their goods locally without losing incentives, and have been granted a three-year transition period to adjust to the new rules.

On the newly introduced 15% minimum Effective Tax Rate for large domestic and multinational firms, the agency said the move aligns Nigeria with a global tax agreement endorsed by more than 140 countries under the OECD/G20 tax framework. Without adopting the rule, the FIRS warned, Nigeria risked losing substantial revenue to “Top-Up Tax” collections abroad.

The reforms also overhaul capital gains taxation—now termed “chargeable gains”—introducing incentives such as reinvestment relief for investors who redirect proceeds into Nigerian companies within the same year. Experts say this single provision could unlock new capital for startups, private equity, and emerging industries.

The FIRS maintained that the tax reforms were designed to strengthen fiscal stability, deepen investor confidence and ensure a more predictable environment for businesses.

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