Some businesses and traders appear to be exploiting the newly introduced tax laws to arbitrarily raise prices of goods and services across the country, Saturday PUNCH findings have shown.
Since the new tax laws took effect in January, the Federal Government has maintained that the reforms would reduce certain taxes and stimulate growth without causing short-term revenue hikes.
However, recent developments indicate that some business owners are already increasing prices and attributing the hikes to the tax laws.
Saturday PUNCH found that the increases have come partly in the form of Value Added Tax charges and partly as general price adjustments.
Background of the Tax Reforms
The controversial tax regime became law on June 26 when President Bola Tinubu signed four major tax reform bills into law. The government has described the measures as the most significant overhaul of the tax system in decades.
The laws are:
- Nigeria Tax Act
- Nigeria Tax Administration Act
- Nigeria Revenue Service (Establishment) Act
- Joint Revenue Board (Establishment) Act
They operate under a single authority, the Nigeria Revenue Service (NRS).
Last December, the NRS said the new tax laws were designed to strengthen economic competitiveness, attract investment and improve long-term fiscal stability.
The agency also argued that the much-debated four per cent development levy on imported goods is not a new or additional tax burden but a streamlined consolidation of several existing levies.
VAT-Exempted Items Under the New Law
Under the new tax laws, a list of items largely used by Nigerians are exempted from VAT. These include:
- Basic food items such as rice, beans, vegetables and other unprocessed essentials
- Medical and pharmaceutical products
- Educational books, materials and services
- Electricity generation and transmission services
- Non-oil exports
- Agricultural inputs
- Diesel, petrol and solar power equipment
Rents and goods meant for humanitarian projects are also VAT-exempt.
In addition, companies with annual turnover below ₦100 million are exempt from charging VAT entirely.
Businesses Still Raise Prices
Despite these exemptions, findings show that some business owners, traders and SMEs across the country are exploiting the new tax laws to extract extra gains from customers.
In separate interviews with our correspondents, several business owners, retailers and traders confirmed sharp price increases, blaming the need to accommodate fresh tax obligations.
Traders Share Their Experiences
A business owner who identified herself only as Yemisi said the tax laws had forced her to raise prices to cope with additional tax payments.
She warned that failure to increase prices could adversely affect her business by year-end.
Yemisi described the tax and VAT regime as challenging for small-scale registered businesses, saying both had dented revenue and income.
“We have started increasing prices to accommodate the tax reforms. If we don’t do that, business owners may end up without any gains.
Clothes we used to buy for ₦8,000 now cost ₦10,000, while items that sold for ₦15,000 are now sold for between ₦17,000 and ₦20,000.”
Similarly, trader Ramat Owolabi said wholesalers had raised supply prices, which filtered through to retailers and consumers.
“We don’t even understand what is happening in the market this year. What we bought at cheaper prices last December have skyrocketed this year by between 10 and 20 per cent.
Is it the tax that has affected the prices of products? This isn’t understandable. We hope we get clarity on this.”
Car Dealers Add Extra Charges
Saturday PUNCH also gathered that some car dealers are adding extra charges to vehicle prices.
A top Lagos car dealer, who asked not to be identified, said the mark-ups reflected extreme caution about the new tax regime.
“Everybody is trying to be careful with this new tax rule so that, at the end of the year, you will not pay for what you did not eat.
Most times, it is people who give us cars to sell. It is after selling that we collect our commission.
Imagine after I have collected a commission of ₦2,000 on a car sold, then they bring a tax of ₦20,000 for me to pay at the end of the year on just that single car.”
He added:
“Before, we didn’t do this, but now it is a must. If somebody wants to buy a car now, we first calculate the VAT on the car price and add it to what the buyer will pay.”
Growing Outcry on X
Since the beginning of the year, Nigerians have taken to X to complain about suspected extortion by small-scale firms and street traders.
One user, @Kings75431077, wrote:
“Literally, everything in Nigeria has skyrocketed in price because of the new tax reform. A kilo of chicken from 6,000 to 6,600; POS charges from ₦100 to ₦150; buy ₦10,000 fuel, they charge ₦500.”
A video shared by Gist with Denok showed a woman alleging that a restaurant, Ileyan, charged her an extra ₦23,000 as VAT and consumption tax on a ₦181,000 meal.
A receipt displayed showed about ₦9,000 as consumption tax and ₦13,000 as VAT.
Savings and Transaction Deductions
A trader who declined to be named said the new tax laws had increased deductions on routine financial transactions.
He said that despite the law not stipulating VAT on savings interest, over ₦4,000 was deducted from his PiggyVest savings.
“I invested ₦250,000 for one year, and when I withdrew it, I was charged ₦4,125.14 as VAT.
This is money I already struggled to save.”
SMEs, Economists React
The President of the Association of Small Business Owners of Nigeria, Femi Egbesola, condemned the practice.
“If this is happening, it is wrong. Taxes should be paid from profit, not by extorting the masses.”
He also called for temporary exemptions to help SMEs properly understand the new law.
Economist Dr Aliyu Ilias urged stronger monitoring and enforcement by the NRS.
“Government must go beyond introducing reforms. The NRS should investigate and bring offenders to book.”
NRS: No Justification for Price Hikes
Speaking to Saturday PUNCH, Dare Adekanmbi, Special Adviser on Media to NRS Chairman Zacch Adedeji, said the laws introduced no new taxes or rate increases.
“There can be no justification for any increase in the prices of taxable goods and services because of the new tax laws.”
He described unjustified price hikes as unpatriotic and stressed that the reforms were designed to ease the burden on Nigerians, especially low-income earners and small businesses.
Editorial Note
This report was compiled using field interviews, verified receipts, social-media monitoring on X, and price-tracking comparisons, with official responses sought from relevant authorities.
