Finance
Nigerians to pay more tax as FG, states and councils collaborate on tax drive
By Omoh Gabriel, Business Editor
The federal government has raised alarm over un paid corporate and personal income tax in the country saying it would collaborate with state and local government councils to ensure that Nigerians pay their taxes.
Speaking at the Chartered Institute of Taxation in Lagos on Friday Minister of State for Finance, Mr. Remi Babalola said “There is also alarming volume of tax debts owned by companies, institutions and MDAs to government, raising question of whether the current penalty for defaulters is adequate.
“This is unacceptable and must be stopped. Government is currently studying the situation and will soon review the penalty for defaulters. The Federal Government has put in place appropriate measures to eliminate inefficiencies, corruption, leakages and all other imperfections in the system to enhance the revenue of the government. Additionally, steps are being taken to make revenue generating MDAs to accurately disclose earnings, payments and remittances to the Federation Account.
“Indeed, it has been revealed that debts on Withholding Tax (WHT), Pay As You Earn Tax (PAYE) and Value Added Tax (VAT) are put at over N260 billion and over US$260 million owned by companies, institutions and MDAs to government. He said that four bills remain outstanding and they are; the Personal Income Tax (Amendment) Bill – to reduce personal income tax; the Petroleum Profits Tax (Amendment) Bill – to improve overall tax administration; the National Sugar Development Council Act (Amendment) Bill – to remove sugar levy; and the Customs and Excise Tariffs Act (Amendment) Bill – to remove sugar levy. He urged the National Assembly to speedily consider these Bills with a view to ensuring their passage in the interest of the country.
Continuing the Minister said “Indeed, the process of commissioning a process audit of all revenue-generating agencies has commenced. Besides, as a measure of improving the nation’s investment climate, the Government has rolled back excise duties on selected products as part of efforts to encourage the manufacturing sector. More importantly, the Government is determined to ensure that taxes are certain, fair, easy to understand, straight forward to pay and economical to collect.
The Minister also said “Investigations have revealed that many individuals, especially the self-employed, and organisations are either not in the tax net or under taxed. The government is currently collecting far less in income tax, individuals and corporate, including withholding taxes, than it should. The self-employed persons outnumber those in paid employment by ten to one ratio at least.
“In terms of earnings, on average the self-employed earn about four times more than others in paid employment. Yet the tax yield from personal income tax by direct assessment is on the whole less than 10 per cent of the yield from PAYE system. Other taxes like Capital Gain Tax (CGT) and Stamp Duty are only paid by those who have an urgent need to perfect their property transactions. Government, therefore, intends to continuously revamp tax collection machinery through restructuring and strengthening for more effective collection.
According to Babalola “We expect improved collaboration rather than friction between and amongst Federal, State and Local Government authorities to enhance tax revenues. Hence it is imperative that the Joint Tax Board must operate effectively in its task of harmonizing the regulations and management of taxes among all tiers of government. Government is aware of the need to enhance revenue through broadening and deepening the tax base, effective surveillance efforts and aggressive monitoring by the relevant government agencies.
“In this regard, efforts are on to reform the current tax system in order to enhance revenue. The proposed tax reform is aimed at addressing multiple taxations and the need to strike a balance between governments’ lawful need for revenue and the desire to encourage investors. Over the years, there have been several policies aimed at tax compliance by individuals as well as corporate organizations. The bottom-line of such policies is the desire by all tiers of government to derive high revenue from tax. Our charge is to be proactive and look beyond the challenges of the moment to reposition the economy to effectively meet its present and future growth needs, which all Nigerians will be proud of. No doubt, we all appreciate the challenges before us and would therefore be willing to collaborate and cooperate with the Government to move the Nation to an enviable height.
“The FIRS has generated substantial revenue in the last four years but not sufficient for development. Experience has however shown that the most reliable source of revenue is taxation. It has a correlation with the level of Gross Domestic Production (GDP). Thus, with increase in the GDP, it is almost automatic that the revenue from taxes will increase. Apart from its revenue generating objective, taxes could be used to stimulate economic development as well as for income distribution and redistribution. It could also be used to stabilise the economy in periods of economic challenges, such as the current situation we are in. It is therefore imperative for our country to have in place a robust tax system with little or no opportunities for evasion, avoidance and non-compliance.
“As you are aware, revenues generated by Government to date are insufficient to meet our development needs. While our revenues have in the aggregate declined, reports have indicated that we need about 50,000 MW of electricity from our present 4,000 MW. Roughly estimating the need to immediately overhaul the power situation to achieve about 25,000 – 30,000 MW for our present level of development, and based on the estimates of about $1.75m per MW for new infrastructure – combined with transmission and generation, the Nation would require about $36.75bn Р$45.5bn (N4.4 – N5.46 trillion) to fund infrastructure development. This amount averages at about 50% of the amount of monies allocated to the States and Local Government over an 8 year period.
“Also, an estimated 12- 16 million units of housing deficit by the recent reports of the United Nations Centre for Human Settlement (Habitat) will cost the Nation over between N42 – N56 trillion Naira to fund, based on an estimated average cost of N3.5 million per housing unit. Besides, provision of educational infrastructure at primary, secondary and tertiary levels will require no less than N20 trillion per annum. In all of these, we have not considered the cost of health care, provision of incentives to encourage individual and communal development, provision of social amenities for the young and old, as well as the sheer running of the public service.
“Meanwhile, total monies allocated from Federation and VAT pool accounts, including excess crude allocations, for the period from June 1999 to May 2007 to the three tiers of Government, amounted to N16.5 trillion, with over 85 per cent derived from crude oil and crude oil related revenue. Therefore, we are dependent on a revenue source that is neither sustainable nor enlists the collective will and accountability of the people of Nigeria. Indeed, a close examination of the Nigerian tax system today will reveal that the three tiers of government will find it extremely difficult to survive without oil revenues which accrue to them by way of allocation from the Federation Account.
“In 2008, about 76% of the income budgeted by the Federal Government came from oil and gas. Much of the other 24% came from the revenue sources such as VAT and customs and excise duties. Despite the wide prevalence and massive turnover of incorporated companies in Nigeria, they only contributed a paltry 6.3%. With the dwindling fortunes in the international oil market coupled with the disruptions in the Niger Delta, this signifies that States with low Internally Generated Revenues (IGRs) will find it difficult to survive the current precarious situation. Any State that does not generate 15 per cent of its total revenue internally may need to adjust or realign its policies and strategies in view of current realities.
“The need to reposition non-oil tax revenues as the number one source of sustainable revenue for national development cannot be over emphasised. This underscores the need to continue with the ongoing tax reform initiatives at all tiers of government. For effective tax reform, collaboration within the Federal Government and State Governments, between States, between the Federal and the State Governments is critical. Central to effective tax reform is having effective access to the right information, having the right skills in sufficient numbers, and working within the right systems which should be automated with minimal human interference, especially in determining tax assessments and collecting tax dues” he said
Finance
Afreximbank successfully closed its second Samurai Bond transactions, raising JPY 81.8bn or $527m
African Export-Import Bank said it has successfully closed its second Samurai bond transaction, securing a total of JPY 81.8 billion (approx. USD 527 million) through Regular and Retail Samurai Bonds offerings.
The execution surpasses the Bank’s 2024 debut issuance size, attracting orders from more than 100 institutional and retail investors, marking a renewed demonstration of strong Japanese investor confidence in the Bank’s credit and its growing presence in the yen capital markets.
On 18 November, Afreximbank priced a JPY 45.8 billion 3-year tranche in the Regular Samurai market following a comprehensive sequence of investor engagement activities leveraging Tokyo International Conference on African Development (TICAD9), including Non-Deal Roadshows (NDRs) in Tokyo, Kanazawa, Kyoto, Shiga and Osaka, a Global Investor Call, and a two-day soft-sounding process which tested investor appetite across 2.5-, 3-, 5-, 7-, and 10-year maturities.
With market expectations of a Bank of Japan interest rate increase, investor demand concentrated in shorter tenors, resulting in a focused 3-year tranche during official marketing.
The tranche attracted strong participation from asset managers (22.3%), life insurers (15.3%), regional corporates, and high-net-worth investors (39.7%).
Concurrently, Afreximbank priced its second Retail Samurai bond on 18 November, a JPY 36.0 billion 3-year tranche, more than double the inaugural JPY 14.1 billion Retail Samurai issuance completed in November 2024.
The 2025 Retail Samurai bond also marks the first Retail Samurai bond issued in Japan in 2025.
Following the amendment to Afreximbank’s shelf registration on 7 November 2025, SMBC Nikko conducted an extensive seven-business-day demand survey through its nationwide branch network, followed by a six-business-day bond offering period.
The offering benefited from strong visibility supported by Afreximbank’s investor engagement across the country, including the Bank’s participation at TICAD9, where Afreximbank hosted the Africa Finance Seminar to introduce Multinational Development Bank’s mandate in Africa and its credit profile to key Japanese institutional investors.
MBC Nikko Securities Inc. acted as Sole Lead Manager and Bookrunner for both the Regular and Retail Samurai transactions. Chandi Mwenebungu, Afreximbank’s Managing Director, Treasury & Markets and Group Treasurer, commented:
“We are pleased with the successful completion of our second Samurai bond transactions, which marked a significant increase from our inaugural Retail Samurai bond in 2024, and which reflect the growing depth of our relationship with Japanese investors.
The strong demand, both in the Regular and Retail offerings, demonstrates sustained confidence in Afreximbank’s credit and mandate.
We remain committed to deepening our engagement in the Samurai market through regular investor activities and continued collaboration with our Japanese partners.”
Ecobank Nigeria, a member of Africa’s leading pan-African banking group, has announced the launch of the Ecobank SME Bazaar—a two-weekend festive marketplace designed to celebrate local creativity, empower entrepreneurs, and give Lagos residents a premium shopping experience this Detty December. The Bazaar will hold on 29–30 November and 6–7 December at the Ecobank Pan African Centre (EPAC), Ozumba Mbadiwe Road, Victoria Island, Lagos. Speaking ahead of the event, Omoboye Odu, Head of SMEs, Ecobank Nigeria, reaffirmed the bank’s commitment to supporting small and medium-sized businesses, describing them as the heartbeat of Nigeria’s economy. She explained that the Ecobank SME Bazaar was created to enhance visibility for entrepreneurs, expand market access, and support sustainable business growth.
According to her, “This isn’t just a market—it’s a vibrant hub of culture, commerce, and connection. From fresh farm produce to trendy fashion, handcrafted pieces, lifestyle products, and delicious food and drinks, the Ecobank SME Bazaar promises an unforgettable experience for both shoppers and participating SMEs. Whether you’re shopping for festive gifts, hunting for unique finds, or soaking in the Detty December energy, this is the place to be.” Ms. Odu added that participating businesses will enjoy increased brand exposure, deeper customer engagement, and meaningful networking opportunities—making the Bazaar a strong platform for both festive-season sales and long-term business growth. The event is powered by Ecobank in partnership with TKD Farms, Eko Marche, Leyyow, and other SME-focused organisations committed to building sustainable enterprises.
The Central Bank of Nigeria (CBN) has said that16 banks have so far met the new capital requirements for their various licences, some four months before the March 31, 2026 deadline. The apex bank also indicated that 27 other banks have raised capital through various methods in one of the most extensive financial sector reforms since 2004. Addressing journalists at the end of the Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Mr Olayemi Cardoso said the banking recapitalisation was going on orderly, consistent with the regulator’s expectations. He said, “We are monitoring developments, and indications show the process is moving in the right direction.” Nigeria has 44 deposit-taking banks, including seven commercial banks with international authorisation, 15 with national authorisation, four with regional authorisation, four non-interest banks, six merchant banks, seven financial holding companies and one representative office.
Cardoso explained that eight commercial banks had met the N500 billion capital requirement as of July 22, 2024, rising to 14 by September of the same year. The number has now increased to 16 as the industry continues to race toward full compliance. He said that the reforms would reinforce the resilience of Nigerian banks both within the country and across the continent. “We are building a financial system that will be fit for purpose for the years ahead. Many Nigerian banks now operate across Africa and have been innovative across different markets. These new buffers will better equip them to manage risks in the multiple jurisdictions where they operate,” Cardoso said. According to him, the reforms would strengthen the financial sector’s capability to support households and businesses. He said, “Ultimately, this benefits Nigerians—our traders, our businesses and our citizens—who operate across those regions. “It should give everyone comfort to know that Nigerian banks with deep local understanding are present to support them. Commercial banks are also creating their own buffers through the ongoing recapitalisation.”
He added that the apex bank considered several factors in determining the new capital thresholds, including prevailing macroeconomic conditions, stress test results and the need for stronger risk buffers. He reassured on the regulator’s commitment to strict oversight as the consolidation progresses. “We will rigorously enforce our ‘fit and proper’ criteria for prospective new shareholders, senior management, and board members of banks, and proactively monitor the integrity of financial statements, adequacy of financial resources, and fair valuation of banks’ post-merger balance sheets,” Cardoso said. He said the CBN remained confident that the banking system would emerge stronger at the conclusion of the recapitalization exercise, with institutions better prepared to support Nigeria’s economic transformation Banks have up till March 31, 2026 to beef up their minimum capital base to the new standard set by the apex bank. Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds.
While most banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition. The CBN had in March 2024 released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion. Others included merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026. Under the guidelines for the recapitalisation exercise, banks are expected to subject their new equity funds to capital verification before the clearance of the allotment proposal and release of the funds to the bank for onwards completion of the offer process and addition of the new capital to its capital base. The CBN is the final signatory in a tripartite capital verification committee that included the Securities and Exchange Commission (SEC) and the Nigeria Deposit Insurance Corporation (NDIC). The committee is saddled with scrutinising new funds being raised by banks under the ongoing banking sector recapitalisation exercise.
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