Nigerian government says legal practitioners fall under taxable services as FIRS pushes tax reforms aimed at fairness, compliance, and wider revenue growth.
The Nigerian government has confirmed that all lawyers and law firms will be required to pay a 7.5% Value Added Tax (VAT) on professional services starting January 1, 2026, under a new tax reform law aimed at expanding the country’s revenue base.
Federal Inland Revenue Service (FIRS) Chairman, Zack Adedeji said the measure is part of a broader fiscal strategy designed to ensure fairness, transparency, and accountability in Nigeria’s tax system. Speaking on Wednesday October 26, 2025, at the 56th Annual Conference of the Nigerian Association of Law Teachers (NALT) in Abuja, Adedeji, represented by Bright Igbinosa of the FIRS Tax Policy Reform Division, explained that the legal sector’s inclusion reflects its classification as a professional service under the nation’s tax code.
The government clarified that certain groups remain exempt from VAT, including traders, military personnel, workers earning less than ₦800,000 per year, and small businesses with annual turnover of ₦100 million or below. Where VAT is wrongly charged to any exempt category, refunds will be processed within 30 days.
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Adedeji emphasized that the reform is not intended to overburden professionals but to promote equity and strengthen compliance. “A professional like a lawyer can generate much higher profits than a typical trader,” he said. “Lawyers render professional services that are clearly defined in law. Professionals should not resist compliance—they are elites and should set the standard.”
He also noted that the FIRS has the legal authority to appoint third parties to recover taxes from defaulters residing outside Nigeria. Adedeji urged lawyers and firms to register with the FIRS, file their VAT returns promptly, and remit collections as required, warning that non-compliance would attract statutory penalties.
In a related remark, Professor Abiola Sanni, SAN, Dean of the Faculty of Law at the University of Lagos, described the ongoing tax reform as a landmark in Nigeria’s fiscal evolution. He called on state governments to harmonize their tax policies with federal initiatives to promote stability and sustainable growth.
Sanni further urged authorities to ensure that the additional revenues are used transparently to improve infrastructure, education, and healthcare, while engaging stakeholders to build trust and ensure effective implementation.