The Federal Inland Revenue Service (FIRS) of Nigeria has launched formal discussions to revise its Double Taxation Agreement (DTA) with the Kingdom of the Netherlands, marking a significant step in aligning the country’s tax framework with recent reforms. The renegotiation, which began on July 7, 2025, at the Revenue House in Abuja, follows the enactment of Nigeria’s transformative Tax Reform Bills by President Bola Ahmed Tinubu on June 26, 2025.
A Timely Overhaul of the Tax Treaty
The opening session was hosted by FIRS Executive Chairman Dr. Zacch Adedeji and attended by a senior Dutch delegation led by Ambassador Bengt van Loosdrecht. Dr. Adedeji emphasized the urgency of updating the DTA, citing shifts in both domestic and global tax environments. “Changes in Nigeria’s tax policies, alongside international efforts to combat Base Erosion and Profit Shifting (BEPS) and evolving global tax standards, have made this review essential,” he stated.
The renegotiation aligns with the Tinubu administration’s goals of expanding Nigeria’s tax base, enhancing administrative efficiency, and fostering economic growth through a modernized tax system. The Netherlands, a key trade and investment partner, is the first country to engage in formal talks to adapt its tax treaty to Nigeria’s new fiscal landscape. The current agreement, designed to prevent double taxation, is now considered outdated in light of the recent legislative changes.
A Collaborative Approach
Ambassador van Loosdrecht expressed optimism about the negotiations, highlighting the shared commitment to a mutually beneficial outcome. “These discussions reflect the goodwill and trust between our nations. With skilled teams on both sides, I am confident we will find common ground and achieve a productive agreement,” he remarked. The talks are expected to focus on aligning the treaty with Nigeria’s reformed tax policies while maintaining strong economic ties between the two countries.
Context of Nigeria’s Tax Reforms
The renegotiation comes on the heels of Nigeria’s most extensive tax overhaul in decades, encapsulated in four new laws: the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and Joint Tax Board (Establishment) Act. These laws, signed into law by President Tinubu, will pave the way for the launch of the Nigeria Revenue Service on January 1, 2026, replacing the current FIRS framework.
Over the next six months, the FIRS plans to use the transition period to streamline tax data, introduce new systems, and update existing tax treaties to reflect the modernized structure. The revised DTA with the Netherlands will serve as a model for similar negotiations with other nations, ensuring Nigeria’s tax agreements remain competitive and compliant with global standards.
Economic and Strategic Implications
The DTA renegotiation underscores Nigeria’s efforts to strengthen its fiscal position amid growing economic challenges, including a public debt surge and inflationary pressures. By modernizing its tax treaties, Nigeria aims to attract foreign investment while preventing tax evasion and profit shifting by multinational corporations. The Netherlands, a hub for international business, is a critical partner in this regard, with significant Dutch investments in Nigeria’s energy, agriculture, and technology
