New tax laws promise relief for Nigeria’s overburdened logistics industry

The Nigeria logistics industry, where more than 90 percent of goods are move by road, has long been plagued by excessive taxation – with haulage and logistics companies facing over 200 legal and hidden taxes along highways.

The country’s new tax laws now promise relief, aiming to ease the burden on operators and revitalise the sector.

Taiwo Oyedele, the czar of the Presidential Tax Committee on Thursday in Lagos, assured players in the industry of relief when the new tax laws take effect in January 2026.

Under the reforms, companies in the haulage and logistics industry earning N100 million or less annually will be exempt from income tax, while those with higher earnings will pay up to 25 percent. “Just do your business,” he said.

Drivers and employees earning N100,000 or less in monthly wages will also be exempt from Personal Income Tax. But as salaries rise, so do the rates. “To be honest, life is hard for everybody, including people who earn N10 million per month. But if we must fix a society and protect the vulnerable, someone has to pay tax, otherwise we’ll go back to printing money and all of us will suffer,” Oyedele said.

Read also: Nigerians to feel impact of new tax laws beginning January 2026 – Oyedele

The new laws will also exempt food, water, educational materials, and transport from Value-Added Tax (VAT). “Why should people be paying taxes on these essential consumptions for survival?” Oyedele asked.

He explained that while producers currently cannot recover the VAT they pay on inputs like bottles, educational materials and fuel, from January next year these items will become zero-rated, allowing them to claim full refunds on VAT paid during production from the federal government.

But he urged companies to be transparent with their records. “You can’t go to the taxman and say, Trust me, I paid VAT. You must keep records. When you collect an invoice, find somewhere to keep it; if you’re not very good with keeping stock, take your phone and snap it.”

The reforms also introduce incentives to drive investment in key sectors, the tax chief said. Under what’s called the Economic Development Incentive for Priority Sectors, transport industries, including traditional, electric, and CNG-powered vehicles, will enjoy tax holidays of up to ten years depending on their level of investment.

But Oyedele announced the reintroduction of a 5 percent fuel surcharge, first introduced under the Obasanjo administration to fund road maintenance, with 40 percent of the proceeds going to federal roads and 60 percent to states and local governments. The charge was previously unenforced because fuel subsidies made it impractical, but it has now been revived to ensure steady funding for transport infrastructure.

The surcharge, however, will only take effect when the finance minister issues an official order published in the government gazette, and when economic conditions make it feasible, such as when the naira strengthens or global oil prices fall. The funds will be dedicated solely to fixing roads, potentially through private-sector-led schemes like the one that enabled Dangote to rebuild the Apapa-Oshodi Expressway to global standards.

When asked why savings from fuel subsidy removal could not be used instead, Oyedele argued that the revenue cannot suffice, even if none of it was stolen.

The biggest cost for the industry remains the multiple layers of taxes paid before and after trucks hit the road. One operator described 2025 as the toughest year yet for logistics. Putting a single truck on the road can cost up to N100 million, with drivers struggling through bad, untarred roads under little to no regulation. Even expensive tyres get deflated if truckers refuse to pay as little as N1,500 to roadside touts.

Read also: How Nigeria’s new tax laws will affect the informal sector

Oyedele himself admitted that moving goods like yam from the North to the South can cost up to N700,000 due to more than 50 official and nearly 200 unofficial taxes, including odd charges like radio, television, and bicycle levies. His committee has proposed capping the total number of taxes at a single digit, integrating taxpayer IDs, and streamlining tax administration, audits, and reporting.

He assured the end of physical tax barriers and cash collections, enabled by streamlined digital systems. “Nobody should collect taxes in cash,” he said. But admitted it would not be easy. “The people that are benefiting from the system we are trying to fix are powerful and they have money. I’m not telling you that from January all these things will stop, but the process has started,” he said. He added that his committee has submitted a bill to amend certain tax allocations still in the constitution, which has now passed second reading.

The Nigerian government has tried many times in the past to streamline charges in the logistics industry, yet problems have persisted.

Oyedele said that from next year, people can appeal if taxes are illegally charged, through the OMBUDSMAN. He advised associations to assign and train members to escalate such issues, promising a maximum of 14 days for resolution at no cost.

But if businesses refuse to pay taxes, he said, the government will come for them. Companies must declare their income and file their taxes. If they do not, Oyedele said, the government will issue a presumptive tax based on what is domiciled in their account.

“Government can say, since you have not declared your income, we see N50 million in your account. We think it might be income on which you should pay tax. Government will issue presumptive tax. It might be 2, it might be 5 or 20 percent,” Oyedele said.

If that tax is due without payment or appeal, the government will invoke what it calls the ‘Power of Substitution’, allowing money to be deducted from the business’s account to pay the tax.

“Government can substitute anything that belongs to you or that will belong to you.” Even the airtime loaded on mobile devices, he warned, could go to the federal government.

The biggest question among those present, however, remains how the government will spend all the money it wants to collect. The tax chief said it is developing a spending framework for all levels of government but “cannot force governors to follow it.” For those present, a real difference will mean good roads, fewer levies, better security, and the freedom to roam.