The federal government has reaffirmed that all lawyers and law firms are legally required to remit the 7.5 percent Value Added Tax (VAT) to the Federal Inland Revenue Service (FIRS) under the new tax reform law, which is set to take effect on January 1, 2026.
According to the government, legal practitioners provide professional services that clearly fall within the taxable category of the new fiscal framework.
The government clarified that traders, military personnel, workers earning below N800,000 annually, and small businesses with a turnover of N100 million or less are exempt from VAT. Where VAT is wrongly charged to anyone in the exempt category, refunds can be processed within 30 days.
Chairman of the FIRS, Zack Adedeji, made this known on Wednesday while addressing participants at the 56th Annual Conference of the Nigerian Association of Law Teachers (NALT) at the University of Abuja. He was represented by Bright Igbinosa, Head of the Tax Policy Reform Analysis Unit, Fiscal and Tax Reform Division of the Service.
Adedeji explained that the tax reform aims not to overburden professionals but to promote fairness, transparency, and accountability within Nigeria’s revenue system. He said the reform is part of a broader strategy to expand the tax net, curb evasion, and enhance revenue for national development.
Responding to concerns about the inclusion of young lawyers in the VAT regime, Adedeji emphasized that professionals cannot be treated like traders.
“A professional like a lawyer can generate much higher profits than a typical trader. Lawyers are not exempt because they render professional services that are clearly defined in the law. Professionals should not resist compliance. They are elites and should not be seeking exemption,” he stated.
He further noted that the law empowers FIRS to appoint third parties to recover taxes from defaulters living outside Nigeria and urged all legal practitioners to register with the FIRS, file VAT returns, and remit collections promptly, warning that non-compliance would attract statutory penalties.
Meanwhile, Prof. Abiola Sanni, SAN, Dean of the Faculty of Law, University of Lagos, described the four new tax reform laws as a landmark development in Nigeria’s fiscal history. He called on state governments to align their tax policies with federal reforms to ensure fiscal stability and sustainable growth.
Prof. Sanni emphasized that states must actively broaden the tax base and ensure that revenues are transparently utilized to deliver tangible benefits to citizens, particularly in infrastructure, education, and healthcare. He also urged continuous stakeholder engagement and public enlightenment to ensure smooth implementation of the reforms.