January 25, (THEWILL) — Digital infrastructure is essential for the successful execution of Nigeria’s tax reform laws, as the entire process is fundamentally driven by technology. Consequently, the significance of the Nigeria Inter-Bank Settlement System (NIBSS), the entity tasked with developing the country’s digital infrastructure, becomes crucial.
This underscores why stakeholders regard NIBSS as the unassuming foundation for the new tax regulations that are set to transform the nation’s macroeconomic environment, significantly affecting the population.
Recently, NIBSS has reached remarkable achievements in its efforts to fortify and elevate the digital infrastructure to a world-class level, a development that has garnered international attention. Both the authorities and taxpayers are perceived as the primary beneficiaries of the new tax regulations, which will operate smoothly on the enhanced digital infrastructure established by NIBSS.
How digital infrastructure supports new tax legislation:
Industry specialists assert that Nigeria’s digital infrastructure aids the implementation of new tax laws by simplifying compliance, improving enforcement, and expanding the tax base through integrated data systems. Key elements in this domain encompass unified identity systems (TIN, NIN, BVN), automated e-filing platforms for real-time reporting, and digital monitoring of virtual assets to prevent evasion.
Moreover, the integration of NIN, TIN, and BVN across various agencies creates a singular, cohesive profile for taxpayers, minimizing double taxation and enhancing identification. Furthermore, automated portals facilitate immediate filing, assessment, and payment of taxes. This renders the processes less burdensome for taxpayers while boosting efficiency.
Also, the new regulations focus on virtual assets such as cryptocurrencies and digital transactions, which are monitored using digital infrastructure to ensure compliance from previously untaxed sectors.
Additionally, the National Revenue Service (NRS) can cross-reference financial data, bank records, and Corporate Affairs Commission (CAC) filings to identify under-reporting or tax evasion. At the same time, shared digital platforms between federal, state, and local governments allow for transparent, automatic, and secure revenue sharing.
Industry experts highlight that the integration of these tools with system-generated audit algorithms facilitates a more efficient, transparent, and comprehensive tax system, minimizing human interference and enhancing revenue generation. This objective can only be realised through a cohesive digital infrastructure framework that aligns with global standards as the financial landscape evolves swiftly.
The new Act’s infrastructure framework:
While the Nigeria Tax Act 2025 has sparked significant discussion regarding tax rates, incentive structures, and revenue consequences, equal emphasis should be placed on the Act’s infrastructure requirements outlined in Section 157’s fiscalisation mandate.
By mandating Electronic Fiscal Systems for VAT administration, the government has effectively required every Nigerian business to establish digital transaction infrastructure by January 2026. This creates an unexpected synergy between tax compliance and operational modernisation that progressive businesses are already acknowledging.
The challenge for business leaders is whether to adopt this infrastructure as a mere compliance measure or as a basis for broader capability enhancement. Electronic fiscal systems, as specified in Section 157, require that those businesses electronically capture transactions, organise customer data in searchable formats, monitor inventory movements in real-time, and systematically document pricing decisions. These functionalities extend well beyond mere tax administration.
Section 172’s economic development incentive provisions demonstrate how the Act incentivizes digital capabilities. Companies aiming for tax credits must document qualifying capital expenditures and secure certification from the Industrial Inspectorate Department within 14 days.
This performance-based framework improves upon previous incentives and mandates that businesses maintain capital expenditure records that are organised and verifiable. Companies utilising digital documentation manage this process efficiently, whereas those relying on manual systems face greater administrative hurdles.
This pattern is clearly observable throughout the Act. The provisions regarding Controlled Foreign Corporations necessitate verified documentation of genuine international activities. The Effective Tax Rate requirements outlined in Section 57 associate compliance responsibilities with audited financial statements.
Moreover, stamp duty regulations assume effective verification of the dates on which instruments are executed. These provisions establish digital infrastructure as the most efficient method for accessing benefits and minimizing administrative obstacles.
Furthermore, Section 59 introduces a development levy that consolidates previously separate obligations (including the Tertiary Education Tax, NITDA Levy, and NASENI contributions) into a unified 4 percent assessment on profits. This consolidation provides significant administrative efficiency, particularly for businesses employing modern accounting systems that facilitate automated calculation and remittance of charges based on assessable profits.
This measure signifies the advancement of Nigeria’s tax policy towards frameworks that embrace digital infrastructure and streamlined compliance processes. As this evolution progresses, and the policy trajectory indicates it will, businesses equipped with robust digital systems will find compliance increasingly streamlined.
Conversely, those relying on manual processes may face growing administrative complexity as policy design presumes capabilities they have yet to develop.
NIBSS and increased collaboration with banks;
The new tax regime will place greater responsibilities on banks and will also demand significant efforts from bank employees who will be tasked with the challenging implementation of tax-related activities within banking. In the digital era, effective tax systems are no longer primarily founded on coercion, discretion, or manual processes, but rather on technology-driven transparency, data-informed administration, and a clear connection between taxation and the creation of public value.
Countries that have achieved sustainable improvements in tax performance have accomplished this by investing in digital identity, interoperable data systems, automated compliance, and real-time accountability mechanisms – instruments that alleviate burdens for taxpayers while enhancing state capacity.
NIBSS serves the purpose of providing the electronic payment infrastructure that enables same-day clearing and settlement of inter-bank transfers, transactions, and various financial activities within Nigeria. It functions as a central switch, facilitating interoperability among banks and other financial institutions to process payments securely and efficiently.
NIBSS offers the infrastructure necessary for instant and same-day settlement of funds between different banks, allowing customers to transfer money to each other effortlessly. The effects are evident in the increase in BVN enrolments in Nigeria, which rose by six percent to 67.8 million in 2025, according to data from NIBSS. This latest figure signifies a notable increase from the previous year, highlighting sustained growth in the country’s banking population and ongoing initiatives to enhance financial inclusion.
The BVN scheme, initiated by the CBN and overseen by NIBSS, aims to bolster the integrity of the financial system by providing a unique identity for bank customers.
Industry analysts attribute the rise in enrolments to improved access to banking services, greater adoption of digital financial products, and regulatory measures that encourage Nigerians, including those in rural and underserved regions, to open bank accounts. The increase in BVN registrations is also anticipated to promote transparency within the financial sector, mitigate fraud, and enhance the effectiveness of customer identification across banks and other financial institutions.
NIBSS has emphasised that ongoing collaboration among banks, fintech companies, and regulators is essential to maintain this momentum and ensure that a greater number of Nigerians are integrated into the formal financial system.
As stated by the Managing Director/CEO, Premier Oiwoh, NIBBS consistently enhances its systems. This ongoing improvement is attributed to NIBSS’s foundation as a service-oriented organisation dedicated to delivering solutions for innovative problem-solving. He elaborated that with 67 million BVN holders benefiting from the offerings of financial services institutions, NIBSS significantly contributes to enabling technology-driven innovations that facilitate smooth financial transactions as the new tax regime comes into effect.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
