Economy
2017 Tax & Fiscal Policy Prospects
By Taiwo Oyedele
Now that 2017 is here
We often have new hopes and high expectations at the turn of new events including the turn of a new year regardless of past experiences and notwithstanding our current reality.
As a country Nigeria has expectations for tax and so are individuals and organisations. To a large extent and under normal circumstances, tax should be relatively more predictable given that the rules, and administration are totally within the control of appropriate authorities. Unlike attempting to predict the weather for a whole year or other natural and supernatural events.
In any case, here are my key predictions for the tax environment in 2017 based on instinct, observable trends, behaviour of key actors in the tax system, and analysis of past patterns.
Tax Policy
There is a revised National Tax Policy awaiting government approval for implementation. It is expected that the Policy will be approved and implementation will commence but with very little traction due to vested interests and insufficient buy-in from those who need to make the required changes.
The 2017 Budget of the Federal Government of Nigeria and the 2017-2019 Medium Term Expenditure Framework have no specific proposals to increase tax rates or impose new taxes in 2017. The budget speech was silent on key tax policies but stated a commitment to align fiscal, monetary and trade policies. There are plans to revive the Export Expansion Grant scheme.
Government will focus on measures to discourage imports which suggest that import duties and waivers may be revised. Already we have seen a revision in some duty rates announced towards the end of 2016 partly designed towards the implementation of the new ECOWAS Common External Tariffs regime.
The ongoing review of tax incentives will be completed and should have a positive impact on government revenue if it addresses current abuse and plug existing leakages.
Tax Administration
Government is less bullish about non-oil revenue in 2017 compared to 2016 given the recent abysmal performance. It is expected that due to losses being reported by many companies in addition to other tax attributes such as unutilised capital allowances, the government tax take will be lower than anticipated especially from Companies Income Tax.
VAT collection is likely to improve partly due to the impact of the government social welfare scheme of conditional cash transfer and increased enforcement of compliance by FIRS but will still perform much below its potentials.
The aggressive stance by government at all levels will continue and intensify. In addition to imposition of stiff penalty and interest there is likely to be criminal prosecutions. Guidelines from the FIRS will continue to be hazy and request for rulings and direction by taxpayers may not receive prompt attention.
Internally generated revenue drive will continue to be on the front burner but still only an insignificant progress will be made due to the haphazard approach and the prevailing harsh economic condition.
It is counter-intuitive that many politicians play politics with revenue generation by placing political considerations ahead of professionalism. Unfortunately many lawmakers, administrators and policymakers lack proper understanding of the tax system. This coupled with undue political interference and vested interests mean that tax revenue will continue to be disappointingly low.
The FCT Internal Revenue Service will make some progress towards the full implementation of its mandate. Adoption and implementation of e-tax systems by various tax authorities will continue to be slow and ineffective.
More stakeholders will trigger the necessary provisions of the Freedom of Information Act to request for relevant information on tax administration, spending and expenditure control.
Some of the initiatives by the FIRS such as joint audit and use of consultants will continue to face implementation hurdles and unlikely to yield any major results. A number of tax authorities will introduce tax amnesty in order to expand the tax net and encourage voluntary compliance.
Tax Regulation
There will be some progress with the restructured Petroleum Industry Bill (PIB) with a high possibility for the governance framework being passed into law but other aspects of the Bill which are more controversial including the fiscal regime, derivation formula and host community issues will remain unresolved.
The proposed 9% Communication Service Tax will not see the light of day in its current form due to public resistance, bad timing which may be considered as insensitive and poor articulation of the justifications for the tax.
There will be some efforts to begin a comprehensive tax law review in 2017. The attempt to broaden the scope of stamp duty to cover savings account deposits, among others, will not yield any positive result as well as the plan to charge VAT on international passports.
Nigeria will sign more tax treaties for the avoidance of double taxation but ratification at the National Assembly necessary to domesticate the treaties will continue to be slow.
Tax Justice
The Tax Appeal Tribunal will be reconstituted. The aggressive level of tax audits by tax authorities especially the progress being made by the FIRS regarding transfer pricing reviews will lead to more disputes and hence a rise in tax appeal cases.
More tax disputes will be resolved in favour of taxpayers due to untenable positions taken by the tax authorities. The judiciary will generally continue to struggle with proper and timely dispensation of tax cases due to lack of in-depth tax knowledge especially in more complex situations and evolving areas.
The Global Tax Space
The OECD’s Base Erosion and Profit Shifting (BEPS) action plan will continue to be a major area of focus for tax authorities around the world. Many countries will enact new laws or amend existing ones to provide a legal framework for its implementation. However, there will be very little progress in Africa including Nigeria as many countries will be unable to make the necessary legal changes. Many more countries will subscribe to the Common Reporting Standards and join the multilateral treaties for collaboration, and exchange of information but implementation will be sketchy.
There will be some tax leaks but not at the same level and magnitude of the 2016 Panama Papers. The scrutiny of tax havens will increase and tax ‘sweetheart deals’ will be challenged both legally but more importantly from a morality standpoint.
The new ECOWAS Common External Tariff scheme will continue to experience poor implementation by member countries thereby undermining the regional integration efforts.
2017 Tax Resolutions
Just in case you do not have any New Year resolutions for tax, you need to commit to paying your taxes correctly and on time. Tax will not just be a compliance matter but a business continuity and sustainability issue. More importantly, as a taxpayer you must hold government accountable for the taxes paid. This will create more tax awareness and citizen engagement.
Overall, the tax journey in 2017 will be bumpy but I am cautiously optimistic that it will end in safe landing albeit with some bruises.
By Dipo Olowookere
The upward trajectory seen at the Nigerian Exchange (NGX) Limited in the past sessions was halted on Thursday as a result of profit-taking in Aradel Holdings, MTN Nigeria, GTCO, and others.
Nigerian stocks were down by 0.43 per cent because of the selling pressure. It was the first loss in 2026 and also the first in 23 trading session. The last time Customs Street ended in red was December 10, 2025.
The decision of investors to trim their exposure to equities contracted the All-Share Index (ASI) by 714.66 points during the session to 166,057.29 points from 166,771.95 points and brought down the market capitalisation by N458 billion to N106.323 trillion from N106.781 trillion.
A look at the sectorial performance indicated that the energy, commodity, and insurance indices were down by 2.21 per cent, 1.14 per cent, and 0.24 per cent, respectively, while the banking, consumer goods, and industrial goods sectors were up by 0.78 per cent, 0.33 per cent, and 0.01 per cent apiece.
Yesterday, investor sentiment was weak after the bourse ended with 26 price gainers and 41 price losers, showing a negative market breadth index.
McNichols declined by 9.99 per cent to trade at N6.58, Caverton crashed by 9.47 per cent to N7.65, Ikeja Hotel collapsed by 9.43 per cent to N35.05, FTN Cocoa dropped 9.38 per cent to sell for N7.05, and Neimeth went down by 8.91 per cent to N9.20.
On the flip side, Nestle Nigeria gained 10.00 per cent to quote at N2,153.80, NCR Nigeria appreciated by 9.97 per cent to N116.90, Jaiz Bank improved by 9.92 per cent to N8.20, Morison Industries rose by 9.90 per cent to N5.66, and Mecure Industries grew by 9.84 per cent to N97.70.
During the session, market participants traded 1.0 billion stocks worth N31.6 billion in 51,227 deals compared with the 761.9 million stocks valued at N29.9 billion transacted in 55,751 deals at midweek, representing a drop in the number of deals by 8.12 per cent, and a surge in the trading volume and value by 31.25 per cent, and 5.69 per cent, respectively.
Sovereign Trust Insurance returned on top of the activity chart with 245.2 million units sold for N798.5 million, Access Holdings traded 78.4 million units worth N1.8 billion, Zenith Bank transacted 72.4 million units for N5.0 billion, Jaiz Bank exchanged 53.7 million units valued at N433.9 million, and Lasaco Assurance traded 53.4 million units worth N135.1 million.
By Adedapo Adesanya
Crude oil was down by around 4 per cent on Thursday after the United States President, Mr Donald Trump, said the crackdown on protesters in Iran was easing, calming concerns over potential military action against the Middle-East country and oil supply disruptions.
Brent crude futures depreciated by $2.76 or 4.15 per cent to $63.76 a barrel and the US West Texas Intermediate (WTI) crude futures fell by $2.83 or 4.56 per cent, to $59.19 a barrel.
President Trump said he had been told that killings during Iran’s crackdown on protests were easing and he believed there was no current plan for large-scale executions, though he warned that the US was still weighing military action against the oil producer, which is a member of the Organisation of the Petroleum Countries (OPEC).
Thousands of people are reported to have been killed in the weeks-long protests, and the American president has vowed to support demonstrators, saying help was “on its way.”
Iran has threatened the US with reprisals were it to be attacked, alongside conciliatory signals, including the suspension of a protester’s execution.
The New York Times reported that many of the US Gulf allies, including several of Iran’s own rivals, have also pushed against a US military intervention, warning that the ripple effects would undermine regional security and damage their reputations as havens for foreign capital.
Regardless, the US withdrew some personnel from military bases in the Middle East, after a senior Iranian official said Iran had told neighbours it would hit American bases if America strikes.
Venezuela has begun reversing oil production cuts made under a US embargo, with crude exports also resuming. The OPEC member’s oil exports fell close to zero in the weeks after the US imposed a blockade on oil shipments in December, with only Chevron exporting crude from its joint ventures with PDVSA under US license.
The embargo left millions of barrels stuck in onshore tanks and vessels. As storage filled, PDVSA was forced to shut wells and order oil production cuts at joint ventures in the country.
With this development, the Venezuelan state oil company is now instructing the joint ventures to resume output from well clusters that were shut.
On the demand side, OPEC said on Wednesday that 2027 oil demand was likely to rise at a similar pace to this year and published data indicating a near balance between supply and demand in 2026, contrasting with other forecasts of a glut.
By Adedapo Adesanya
Nigeria’s crude oil production slipped slightly to 1.422 million barrels per day in December 2025 from 1.436 million barrels per day in November, according to data from the Organisation of Petroleum Exporting Countries (OPEC).
OPEC in its Monthly Oil Market Report (MOMR), quoting primary sources, noted that the oil output was below the 1.5 million barrels per day quota for the nation.
The OPEC data indicate that Nigeria last met its production quota in July 2025, with output remaining below target from August through December.
Quarterly figures reveal a consistent decline across 2025; Q1: 1.468 million barrels per day, Q2: 1.481 million barrels per day, Q3: 1.444 million barrels per day, and 1.42 million barrels per day in Q4.
However, the cartel acknowledged that despite the gradual decrease in oil production, Nigeria’s non-oil sector grew in the second half of last year.
The organisation noted that “Nigeria’s economy showed resilience in 2H25, posting sound growth despite global challenges, as strength in the non-oil economy partly offset slower growth in the oil sector.”
According to the report, cooling inflation, a stronger Naira, lower refined fuel imports, and stronger remittance inflows are improving domestic and external conditions.
“A stronger naira, easing food prices due to the harvest, and a cooling in core inflation also point to gradually fading underlying pressures”, the report noted.
It forecast inflation to decelerate further on the back of past monetary tightening, currency strength, and seasonal harvest effects, though it noted that monetary policy remains restrictive.
“Seasonally adjusted real GDP growth at market prices moderated to stand at 3.9%, y-o-y, in 3Q25, down from 4.2% in 2Q25. Nonetheless, this is still a healthy and robust growth level, supported by strengthening non-oil activity, with growth in that segment rising by 0.3 percentage points to 3.9%, y-o-y. Inflation continued to decelerate in November, with headline CPI falling for an eighth straight month to 14.5%, y-o-y, following 16.1%, y-o-y, in October”.
OPEC, however, stated that while preserving recent disinflation gains is important, the persistently high policy rate – implying real interest rates of around 12% – risks weighing on aggregate demand in the near term.
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