There have been widespread concerns that the implementation of the tax reforms could lead to an increase in the prices of goods and services, resulting in rising inflation.
Also, questions have been raised about whether the tax reforms could impact prices.
While public debate around the reforms has intensified in recent weeks, analysts say the major transactional taxes faced by households and businesses have largely remained unchanged, limiting the likelihood of immediate price pressures.
“Going by the letter of the law, I don’t see the new tax reforms necessarily driving prices up in 2026, because the major transactional taxes Nigerians face daily, especially VAT, remain unchanged,” said Olamide Olaniran, a tax expert and an associate of the Institute of Chartered Accountants of Nigeria (ICAN).
Nigeria’s value-added tax (VAT), which directly affects consumer prices, remains at 7.5 percent under the reforms. According to Olaniran, this alone weakens arguments that the tax changes would automatically translate into higher prices for goods and services.
“VAT, which is the transactional tax Nigerians encounter every day, is still at 7.5 percent, so structurally there is no immediate reason for prices to rise on the back of the tax reforms alone,” he said.
The most significant rate adjustment in the reforms is the increase in capital gains tax (CGT) from 10 percent to 30 percent. However, experts note that CGT is not a tax most Nigerians encounter in daily consumption.
“The key rate increase is in capital gains tax, but this mainly affects capital market transactions and high-value property sales. It is not an everyday tax for most Nigerians,” Olaniran said.
Beyond headline rates, analysts point to changes in how businesses can recover taxes as a potential channel for cost relief. The reforms expand the scope of zero-rated goods and allow companies to reclaim input VAT that was previously unrecoverable and absorbed as a cost.
“The reforms expand zero-rated goods, allowing businesses to recover input VAT that was previously a cost. If producers can reclaim these credits, there is little justification for increasing prices,” Olaniran explained.
Input VAT recovery has also been widened beyond stock-in-trade to include fixed assets and certain overheads, a move analysts say could lower production costs over time.
However, another tax expert warned that misinformation and market psychology, rather than the law itself, could shape price outcomes.
“People are panicking unnecessarily. The tax reforms are fiscal measures designed to make life better by offering more incentives and reliefs, not to increase the cost of living,” said a tax expert who asked not to be named.
“In practice, prices are expected to moderate, not rise, if the reforms are properly implemented,” the expert added, noting that most high-income earners generate income through incorporated businesses rather than personal consumption.
Transport costs also emerged as a critical factor influencing prices. Olaniran said the proposed removal of informal levies and road charges imposed by non-state actors could ease cost pressures, particularly in logistics and food distribution.
“A major contributor to high transport costs is the multiple levies imposed by non-state actors. Goods that leave Kano at about N1,000 can arrive in Lagos at N2,500 once informal road charges are added,” he said. “Removing these costs would reduce price pressure.”
Providing policy context, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, stated that the reforms are designed to improve household welfare rather than exacerbate inflation.
“The reforms intend to increase the disposable income of the average Nigerian while making essential goods and services more affordable,” Oyedele said.
Read also: Would Nigeria’s reforms deliver more revenue or hardship?
According to him, households should see relief in core spending areas that account for a large share of consumer budgets. “This includes food, rent, transportation, education, and healthcare,” he added.
Still, analysts caution that while the reforms may ease structural cost pressures, price outcomes in 2026 will also depend on inflation dynamics, energy prices, and how businesses respond to public perception.
“The bigger risk to prices is misinformation,” Olaniran said. “Businesses may raise prices out of fear or misunderstanding rather than because the law actually requires it.”
