An oil and gas expert, Ken Ife, has said Nigeria’s newly effective Nigeria Tax Act (NTA) 2025—part of a broader tax overhaul that took effect on January 1, 2026—is expected to help plug significant revenue leakages in the oil and gas sector.

Ife explained that the reform consolidates fragmented petroleum tax laws (including the old Petroleum Profits Tax Act) into a streamlined framework designed to improve transparency, efficiency, and compliance.

One major change is the introduction of a minimum effective tax rate of 15 % for large oil companies, which helps prevent profit-shifting and ensures multinationals pay their fair share even after incentives.

The new Nigeria Revenue Service (NRS) now has exclusive responsibility for collecting petroleum taxes and royalties, reducing battles between multiple agencies and simplifying revenue collection.

How reform helps with leakages (analyst perspectives)
According to broader commentary from fiscal policy specialists:

• The Act tightens compliance and reporting standards for oil companies, with stricter requirements on data disclosure and monitoring than previous laws.

• Penalties for non-compliance have been strengthened, making it more costly for firms to under-report production or evade taxes.

• Experts note that weak enforcement and outdated systems previously encouraged leakages through under-reporting and contract opacity—issues the new law aims to reverse.

Context and government position 

•President Bola Tinubu has insisted the new tax laws go ahead despite calls for delay and controversy over legislative handling. The reforms are part of a once-in-a-generation fiscal reset intended to broaden Nigeria’s revenue base and reduce dependence on volatile oil prices.

•Stakeholders, including the Revenue Mobilisation Allocation and Fiscal Commission, have endorsed the reforms and stressed that they are about enhancing efficiency and transparency—not just raising taxes.

Key takeaway

Experts believe that by unifying tax administration, tightening compliance requirements, and strengthening enforcement and penalties, the New Tax Act will significantly reduce the instances of under-reported output, tax evasion, and other leakages in the oil and gas sector—provided the implementation is robust and sustained.