According to TVC News, the Nigeria Revenue Service (NRS) has begun an intensive sensitization campaign to explain the benefits of the new Tax Act to skeptical business owners. A key highlight of the new regime is the transition to a 7.5% “full input recovery” system, which now includes services and capital expenditure (capex), unlike the old regime which was far more restrictive. Executive Chairman Zacch Adedeji emphasized that these reforms are intended to reduce the overall tax burden on productive sectors while widening the tax net.
The new Act also streamlines Personal Income Tax (PIT) and Company Income Tax (CIT) to remove “nuisance taxes” that have historically complicated compliance for Small and Medium Enterprises (SMEs). Despite these explanations, many Nigerians remain wary of the NRS’s expanded enforcement powers. The government, however, insists that the automation of tax collection will reduce human interface and corruption, ultimately leading to a more transparent fiscal environment.
Validating these updates, Channels TV reported on the public’s mixed reactions to the “full input recovery” clause, with an economic analyst stating, “While the math looks good for big corporations, small businesses still fear the aggressive enforcement stance of the NRS.” The Nation also covered the development, quoting Taiwo Oyedele of the Presidential Tax Reform Committee: “Our goal is to make Nigeria a tax-friendly destination where the system is fair and predictable.”
Echotitbits take:
The “full input recovery” is a significant olive branch to the manufacturing and service industries. It essentially means businesses can recoup more of the VAT they pay on operations. However, the success of this policy depends on whether the NRS can actually process these refunds faster than the old, sluggish system.
Source: Arise – https://www.arise.tv/lirs-activates-power-of-substitution-under-new-tax-law-to-boost-tax-recovery/, February 11, 2026
Photo credit: Arise
