ICAN Anticipating and Managing the Realities of the Tax Reform Act 2025 - Prof Oyedokun.pptx

Being a Virtual Monthly Technical Session Paper Presented at ICAN Epe & District Society Held on Sunday, October, 26 2025.

1. Anticipating and Managing the Realities of the Tax Reform Act 2025 Prof. Godwin Emmanuel Oyedokun Professor of Accounting and Financial Development Department of Management & Accounting Faculty of Management and Social Sciences Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors) Being a Virtual Monthly Technical Session Paper Presented at ICAN Epe & District Society Held on Sunday, October, 26 2025.

2. ND (Fin), HND (Acct.), BSc. (Acct. Ed), BSc (Acct & Fin.), LLB., LLM, MBA (Acct. & Fin.), MSc. (Acct.), MSc. (Bus & Econs ), Ph.D. (Acct), Ph.D. (Fin), Ph.D. (Forensic Acct.), CFA, CFE, ACS, ACIS, ACIArb (UK), FBR, MNIM, FCA, FCTI, FCIB, FCNA, FCFIP, FCE, FERP, FFAR, FPD-CR, FNIOAIM, FCCrFA , FCCFI, FICA, FCECFI, FTPL, JP Prof. Godwin Emmanuel Oyedokun Professor of Accounting and Financial Development Department of Management & Accounting Faculty of Management and Social Sciences Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors)

3. Anticipating and Managing the Realities of the Tax Reform Act 2025

4. Contents

5. Introduction: Navigating Nigeria's Fiscal Transformation Tax Reform Act 2025 Nigeria’s fiscal system is undergoing a significant transformation with the introduction of the comprehensive Tax Reform Act 2025. Core Focus The legislation is primarily focused on driving efficiency, enhancing equity, and modernizing the nation's entire tax collection and compliance framework. Pivotal Role of Accountants Professional accountants play a pivotal, indispensable role in ensuring compliance across all sectors and promoting necessary fiscal transparency.

6. Policy Context and Strategic Goals of the Reform Broadening the Tax Base Expanding tax coverage to reduce the concentration on a few sectors and significantly minimise tax multiplicity. Digital Economy Integration Aligning domestic tax policies with global standards, including the OECD/BEPS framework, to effectively capture digital transactions. Institutional Efficiency Improving institutional structures and transparency in revenue collection across all government levels. Fiscal Federalism & Equity Reinforcing the principles of fiscal federalism to ensure fair revenue redistribution and equity amongst states. The goals reflect a commitment to building a sustainable, resilient, and equitable fiscal framework for Nigeria's future.

7. Some Key Provisions of the Tax Reform Act 2025 The Act introduces widespread changes across major pieces of legislation, mandating comprehensive review and adaptation. 1 CITA Amendments New income thresholds for businesses and specific legislation targeting taxation within the growing digital economy. 2 PITA Adjustments Revised personal reliefs and mandatory inclusion of income generated from the burgeoning gig economy sector. 3 VAT Harmonisation Standardisation of rates and new rules governing the taxation of cross-border supply of goods and services. 4 CGT Changes Refinement of asset classification rules, specifically incorporating digital assets like cryptocurrencies and NFTs into the Capital Gains Tax net. 5 Unified Administration Establishment of a Unified Tax Administration Framework focused on data-driven compliance and efficient collection. 6 Dispute Resolution Modernization of the Tax Appeal Tribunal processes, aimed at streamlining dispute resolution and enhancing taxpayer confidence.

8. Anticipated Economic Realities and Market Shifts These changes will initially create turbulence, but are designed to lead to long-term fiscal stability and transparency. Inflationary Pressure Potential short-term impact on consumer prices and increased initial compliance costs for businesses adapting to the new systems. Expanded Tax Coverage Successful inclusion of previously untaxed segments, particularly the large informal sector and emerging digital enterprises. Revenue Redistribution Shift in revenue collection and allocation, reinforcing fiscal federalism across federal, state, and local governments. Demand for Expertise A significant and immediate increase in the market demand for specialised professional tax advisory and compliance services.

9. Professional Realities for ICAN Members The Tax Reform Act 2025 represents both a challenge and a monumental opportunity for the accounting profession. Re-skilling Urgency Rapid and compulsory need for tax re-skilling, digital literacy, and mastery of the new legislative provisions. Elevated Expectations Increased demand for proactive compliance management, strategic advisory services, and policy interpretation. New Responsibilities Acceptance of new ethical, accountability, and fiduciary responsibilities in a reformed fiscal environment. Shaping Transformation The unique opportunity to lead and shape Nigeria’s fiscal transformation, solidifying the profession's national influence. 1 2 3 4

10. Managing the Realities: Strategic Roles for Accountants 1 Technical Preparedness Mandatory Continuous Professional Development (CPD) focusing specifically on the Act's detailed provisions. Integration of data analytics and AI tools for advanced tax planning and audit efficiency. Proactive portfolio review of all clients to ensure immediate compliance readiness. 2 Advisory and Advocacy Advising businesses on restructuring to achieve optimal, legitimate tax efficiency. Engaging policymakers through ICAN position papers on implementation gaps and clarity. Promoting strong ethical practices and voluntary compliance amongst the entire taxpayer base. 3 Institutional Collaboration Strengthening partnerships with key regulatory bodies: FIRS, JTB, and State Boards of Internal Revenue. Establishing technical taskforces to engage government directly on policy interpretation and clarity. Promoting digital tax literacy through joint, impactful capacity-building programmes.

11. Some Challenges and Critical Risk Areas A proactive approach is essential to mitigate transition risks and ensure successful implementation. Administrative Inconsistencies Differences in interpretation and enforcement practices between federal and state-level tax authorities creating friction. Legal Ambiguities Interpretation challenges and potential conflicts arising from overlapping or newly amended tax laws. Compliance Gaps Low digital readiness and capacity amongst small and medium-sized enterprises (SMEs) to adopt new e-filing systems. Transition Risks Potential taxpayer confusion and errors as old legislative provisions are gradually phased out in favour of the new Act. Technological Barriers Limited ICT infrastructure and digital connectivity in remote or rural areas hindering nationwide tax digitisation efforts. 1 2 4 3 5

12. New Avenues of Opportunity for ICAN Members Tax Technology Consultancy Development of niche practices specialising in implementing tax compliance software and automated reporting systems. Fiscal Governance Advisory Expansion of high-level advisory services focusing on policy analysis, impact assessment, and fiscal strategy. Tax Auditing New markets opening up in tax auditing and sophisticated, AI-driven tax fraud detection and prevention. Enhanced Professional Influence Increased role in national dialogue, policy formulation, and the overall reform process, boosting professional standing. 4 2 3 1

13. Case Study One: VAT Expansion on Digital Services Scenario Implications Increased compliance burden due to complex digital reporting requirements. Short-term cash flow pressures as companies adapt to new VAT remittance cycles. Mandatory realignment of client contracts and pricing structures. Under the Tax Reform Act 2025, VAT scope broadens to include emerging segments of the digital and professional services industry, such as consulting, online advertising, and subscription platforms. Professional Perspective for ICAN Members Guidance: Advise clients on mandatory VAT registration and compliant e-filing under the new digital economy provisions. Systems: Implement robust invoicing, record-keeping, and accounting systems for seamless VAT reconciliation and transparency. Education: Educate management on complex input-output VAT offset mechanisms and compliance obligations for cross-border transactions.

14. Case Study Two: Transition to Automated Tax Systems The Tax Reform Act 2025 mandates full electronic filing (e-filing) and real-time tax monitoring to boost efficiency and curb corruption in tax administration. The Challenge: System Migration A manufacturing company accustomed to manual filing faces disruption as its tax platform migrates to an automated FIRS system. Unfamiliar internal accountants lead to multiple filing rejections and penalty notices. ICAN's Key Role: Bridging the Gap ICAN members must drive technical literacy and develop internal compliance frameworks that sync commercial accounting software (QuickBooks, SAP) directly with tax authority platforms. Opportunity: Tax Technology This transition creates significant opportunities for accountants to specialise in tax technology consulting and system integration, serving as vital intermediaries for seamless data flow. Implications include operational disruption, risks of penalties despite good faith efforts, and the urgent need for technical literacy among finance staff.

15. Case Study: Collaborative Engagement with Tax Authorities The government seeks active engagement from professional bodies (ICAN, CITN, ANAN) to bridge policy-practice gaps and ensure smooth implementation of the 2025 Act. ICAN establishes a Joint Technical Taskforce with the FIRS and State Boards of Internal Revenue (SBIRs). The taskforce's primary objective is to develop simplified tax compliance templates for SMEs and facilitate transparent dialogue sessions. Enhanced Trust & Dialogue Fostering transparency reduces compliance errors, disputes, and builds stronger relationships between taxpayers and regulators. Policy Liaison Role ICAN members can serve as policy liaisons and technical advisers, contributing to impact assessments and feedback reports on the reform outcomes. National Partnership This model strengthens ICAN's influence in fiscal policymaking, positioning members as partners in national economic reform and development.

16. Summary of Strategic Focus Areas The three key scenarios outline the immediate priorities and long-term opportunities arising from the new legislation. 1 VAT Expansion New compliance scope for digital services Advisory, pricing restructuring, client education Digital tax consultancy 2 Automation Transition to e-filing and data systems Systems integration, compliance assurance TaxTech specialization 3 Collaboration Bridging policy and practice gaps Policy advisory, taskforce participation Influence in fiscal governance This synthesis highlights the need for ICAN members to evolve from traditional compliance roles to strategic technological and advisory functions. Case Focus Area Core Challenges Key Roles for ICAN Members Opportunities

17. Conclusion: Driving Fiscal Modernisation Landmark Modernisation The Tax Reform Act 2025 represents a landmark step toward fiscal modernisation and administrative efficiency. Anticipate & Adapt Accountants must anticipate operational challenges, embrace digital systems, and actively drive compliance excellence. Key Partners in Prosperity ICAN members are key partners in ensuring these crucial reforms translate into sustainable national economic prosperity. 1 2 3

18. Recommendations for Action To Government Adopt phased implementation to minimise business disruption and allow time for adjustment. Provide detailed operational guidelines and necessary digital infrastructure support to all regions. Commit to engaging professional bodies in continuous policy review and feedback loops. To ICAN Establish a dedicated Tax Reform Implementation Desk for immediate member guidance and inquiries. MCPE programmes should focused on the 2025 Act and digital compliance tools. Actively advocate for stronger public-private collaboration in fiscal policy monitoring. To Practitioners Embrace innovation and digital transformation immediately within firm operations. Maintain exemplary professional ethics and transparency in all advisory roles. Proactively educate clients about the new compliance landscape and potential financial impacts.

19. Closing Note “Accountants are not just compliance agents – they are architects of trust, governance, and national growth.”

20. Prof. Godwin Emmanuel Oyedokun Professor of Accounting & Financial Development Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors) [email protected]; [email protected] [phone] & 2348055863944