ICAN members urged to note 18 sensitive clauses in new tax law

…As Chartered accountants in Obio/Akpor District & Society mount training on new tax regime

Professionals including accountants expected to work with the new tax laws have been told to pay closer attention to about 18 sensitive clauses in the new tax regime to begin in January 2026.

An expert, Kennedy Iwundu, who took chartered accountants and other professionals through the new tax regime at a quarterly lecture of the Chartered Institute of Nigeria (ICAN), Obio/Akpor District & Society in Port Harcourt said the new income tax system would pose concerns and challenges. He also said he expected concerns in that section.

This, he said, was because whereas small businesses with less than N50m turnover would no longer pay tax, income earners of a mere N2m would pay higher taxes of up to 15%.

Iwundu, whose paper was presented by Akintunde Ogunsola Emmanuel, warned companies hoping not to pay tax to be know that their company’s assets must not be above N250m, saying the exemption was not calculated only on N50m turnover.

Iwundu also said expatriate levy has gone because such expatriates would now pay income tax, so long as they are not paying tax in any other tax jurisdiction. “Tax payable by such companies cannot be less than the withholding tax (WHT) rate applicable to the income, or 5% of the income.”

The lecture touched heavily on personal income tax, capital allowance, value added tax (VAT) which he said is now 55% to states instead of 50% whereas the FG has dropped to 10% instead of 15%, leaving LGAs to 35%. This appears to have cleared the various litigations against the FG by the sub-nationals.

He gave detailed explanations on tax incentives, economic development levy, and taxation of approved entities in Free Trade Zones.

Iwundu said the tax laws had become obsolete, some as old as 1959, some 2004.

He said revenue was going down so badly that at some point, only N500bn was shared at Federal Account Allocation Committee (FAAC) at a point. He said this was because some persons were not paying taxes despite all efforts for which reason Nigeria was borrowing while people were withholding taxes.

He said the ratio of tax to revenue so far is very low, but reminded the people that evading tax is a criminal offence.

He said the tax law that has enthroned a new tax regime has four components: tax policy, tax law, tax administration (FIRS law of 2007 to be changed), tax jurisprudence (levels of government; tax ombudsman, courts, tribunal, etc). He said the overall objective is to move the ration of tax to gross domestic product (GDP) from 9% to 18%.

He reminded the professionals that Capital Gains Act has been repealed (now from 10% now 30%). He said it is now imbedded into the companies’ income tax and personal income tax. He also said the Petroleum Industry Act (PIA) been amended.

The resource person said the reason for the amendments was to harmonize all tax laws. In this case, a new body, Nigeria Revenue Service (NRS) will collect taxes which others were collecting. For instance, the Federal Road Safety Corps (FRSC) will no longer collect revenue for road maintenance.

In her welcome remarks, Chioma Mbakwe Ojukwu, the chairman of Obio/Akpor District & Society, said the lecture was to address what she called concerns, questions, and worries of accountants and members of the public over the new tax laws.

The university lecturer said the new tax law in town is a bone of contention. “Many of us have not read them and many of us have questions in mind. Students too need answers. People need to know how to navigate the economic times by understanding the new tax laws.”

She also said ICAN members must uphold integrity as they practrise with the new law, hoping that it would help to reform the economy.

The lolo went on: “We discover that some of our members as well as members of the public need a lot of explanations on the new tax regime. They are asking a lot of questions. So, this is an enlightenment exercise. It will help members to be aligned properly. The type of tax regime we ask for is one that will be of benefit to the citizens and the tax paying public; we want tax that will be fair and will be collected in civilized ways and the fruits of the taxes seen by the citizens.”

She said the quarterly lecture series is for enlightenment of their members.

Also speaking, Gabriel N. Ogbonna, a professor of accounting and information technology in the University of Port Harcourt, who was chairman of session said the lecture was an opportunity for knowledge sharing and impacting the practice. He hailed the district chairman for piloting the scheme to its second successful session, saying it is a testament to professional excellence.

The chairman is said to be an ICAN ambassador and lover of accounting, who is known for revamping ailing companies. He is also known for training of accountants and for publishing over 123 articles in both national and international journals.

Speaking after at the session, he called on all professionals to endeavor to understand the objectives of tax reforms and why government always seek to reform tax laws. “It is to strengthen the tax regime. The citizen is the ultimate beneficiary of taxes. Government has the mandate to utilize taxes in the best possible way for the society.

“But, in reality, government hardly achieves this objective, thus, reforms are needed from time to time. It is to generate revenue and create redistribution of wealth. Government will ensure proper regulation of economic activities.

“The new tax regime is to stabilize the economy. Main objective is to improve efficiency and strengthen tax procedures. Government wants to maximize economic objectives.”

He admitted that citizens anywhere do not like to pay taxes, but government tries to give incentives to encourage payers and avoid excuses. “Reforms try to simplify tax procedures and expand the tax net to get more people into the paying net. Without reforms, tax law will be outdated, and revenue would decline.”

Speaking after the presentation, Abel Aig.Asein, executive secretary, Association of Accountancy Bodies in West Africa (ABWA), made specific calls, urging the FG to review income tax law which has been pushed to 15%.

He said it was strange that the FG considered SMEs by asking them to pay tax only when they make over N50m turnover, only to impose 15% on income earners after allowing for a mere N800,000 in salaries and N500,000 for house rent.

He however asked citizens to hold their state governments tight because they now get huge monthly allocations.

In his ‘call to action’, Aig-Asein advised all professionals to study the new tax Act very well and retrain their workers so as to be in a position to handle their clients matters effectively.

He called on ICAN to develop a guide in form of a handbook to support their clients and practitioners because, as he stated, new calculations have come up. “Let accounting teachers review their syllabus and books.”

Prominent professional and academics such as Godfrey Omojefe, professor and dean of Faculty of Management Sciences, Uniport, George Peter (Associate professor), Anita Amieye (assistant chairman/technical training committee), participated in the session.