The Senate and other major stakeholders in Nigeria’s local government administration have outlined strategies to implement the new Nigerian Tax Reform Act 2025 in local councils, aiming to strengthen their autonomy, enhance fiscal responsibility, and improve their Internally Generated Revenue (IGR).
The Act has three key areas, including fiscal federalism, the critical issue of IGR and local government autonomy. The Act takes effect from January 2026 and requires local councils to adopt data-driven strategies, revise dormant revenue schemes and uphold the sacred trust of public service financial stewardship.
This was the thrust of the discussion at the just-concluded Nigerian Local Government Development Summit and Award, organised by the Senate Committee on States and Local Governments Administration in collaboration with Global Gold Consult Ltd in Abuja, with the theme “building Nigeria from the grassroots and unlocking the promise of the Nigerian Tax Act 2025.”
President of the Senate, Godswill Akpabio, described the Nigerian Tax Act 2025 as a bold proclamation that shall no longer be held captive by obsolete systems, narrow revenue channels, and crippling dependencies on federal allocation.
“It is a call to modernise and simplify our local governance, and a pathway to fiscal responsibility, equity and efficiency aimed to advance autonomy for our local councils and generate revenue,” Akpabio said.
Represented by the Chairman of the Senate Committee on State and Local Government Administration, Senator Binos Dauda Yeroe, Akpabio stressed that the tax law is more firmly aligned with national development.
“We supported measures that equip our local government with stronger tools to deliver services with honour and competence, and these are actions and not aspirations, and we shall press forward with unwavering resolve.
“Fiscal federalism demands integrity from every tier of government, and the Senate pledges to fortify this contract; we will strengthen inter-governmental operation, empower communities and guide the implementation of the Tax with,” he said.
Akpabio said the newly enacted tax act represents a significant shift in Nigeria’s fiscal architecture, even as it challenges the country to think about how resources are mobilised, managed, and fostered across all tiers of government, promoting transparency and accountability.
The Managing Director /CEO of Global Group Consult, Engr. Kayode Adegbayo, the consultant to the Senate Committee on State and Local Government, told journalists that the annual summit has yielded numerous benefits for the development of the Nigerian grassroots.
He said, “The local government is the most critical tier of government because of its closeness to the people, so all efforts must be made to ensure that local government is effectively developed.
“Through the efforts of President Bola Tinubu, the Supreme Court pronounced fiscal autonomy of the local government tier, and that pronouncement is already improving the releases of funds into the local system in Nigeria, though not yet in full.”
Co–consultant to the organisers, Professor John Olatunji Alabi, stated that the administration of President Tinubu is fully committed to utilising this tax reform act to reengineer IGR and explore alternative sources of revenue for local governments.
Also, a professor of capital market, Uche Uwaleke who is a member of the Presidential Committee on Fiscal Policy and Tax Reforms, told reporters that, “The whole essence of the tax reforms is to streamline the multiple taxes that we have today particularly at the local government levels and we think that these tax reforms, when they are implemented, will go a long way to do that.
“It is obvious that people in the local communities are complaining about multiple levies, and that is constraining businesses. So, what will be implemented next year will be a situation in which, at the local and state levels, you are not going to have more than nine taxes. That will go a long way to ease business, make business simple so that people in that area can breathe.”