The Advertising Regulatory Council of Nigeria (ARCON) today convened key stakeholders across Nigeria’s Integrated Marketing Communications (IMC) industry for a strategic webinar exploring the implications of the country’s new tax regime.
The virtual session, themed “The New Tax Regime: Implications for the Integrated Marketing Communications Industry”, was hosted by ARCON Director-General Olalekan Fadolapo and brought together regulators, tax experts, and industry leaders to examine how the sweeping fiscal reforms will shape agency operations, compliance requirements, and sector growth.
Delivering the keynote address, Femi Olarinde, Head of the Fiscal and Tax Reforms Implementation Division at the National Revenue Services, said the reforms were designed to shift Nigeria’s revenue framework away from its historic dependence on oil and toward a more sustainable, diversified tax system.
According to him, a key feature of the reform is the consolidation of multiple tax laws into a single framework known as the Nigerian Tax Act, which harmonises existing provisions to simplify compliance for businesses.
He added that the reform also abolishes the minimum tax for loss-making businesses and introduces a new classification for companies based on turnover.
“Small businesses with turnover below ₦100 million will pay zero per cent company income tax, while larger businesses will pay 30 per cent, which is expected to reduce to 25 per cent in the near future,” he said.
For the IMC industry specifically, Olarinde highlighted several changes, including VAT compliance, withholding tax obligations and digital economy taxation.
“Advertising agencies, media buying firms, PR consultancies and digital marketing companies play a critical role in the economy. But these taxes will directly affect pricing, margins and compliance costs, so firms must pay close attention to proper documentation and tax planning,” he noted.
One of the most significant shifts for service-based businesses is the ability to reclaim input VAT, a provision that many industry players have long advocated for.
“Service industries previously could not claim input VAT. Under the new regime, they can now offset input VAT against output VAT, and where there is excess, the tax authority is expected to refund within thirty days,” Olarinde said.
Industry leaders welcomed some aspects of the reform while also raising concerns about implementation and interpretation.
Speaking during the panel discussion, Tunji Adeyinka, Group Managing Director of The Republican Group, emphasised the importance of compliance and proper financial documentation.
“Compliance will be critical under the new regime, and it begins with sound record-keeping. If an organisation does not have a robust accounting system capable of capturing its financial records properly, it will run into serious issues,” Adeyinka said.
He noted that reclaiming input VAT presents a significant advantage for agencies, but warned that companies must maintain accurate records to fully benefit from it.
“One of the advantages this law offers our industry is that we can reclaim input VAT. But if you do not have proper record keeping, you cannot reclaim the VAT you have already paid,” he said.
Adeyinka also highlighted a longstanding industry challenge, the difference between agency turnover and actual income.
“What you have as turnover is not the same as your income. Agencies handle high pass-through costs for clients, and tax authorities must recognise that not everything passing through an agency’s books belongs to the agency,” he explained.
Similarly, Obinna Aniche, Group President of Red Slate Group Ltd, described the reform as both necessary and transformative.
“The tax reform is timely and important. Beyond the fiscal issue, it is also an economic design issue that will affect how we employ people, how we invest and how we price our services,” Aniche said.
He stressed that the IMC sector has evolved into a complex ecosystem spanning digital marketing, content production, influencer networks and cross-border media platforms.
Aniche added that well-implemented reforms could strengthen transparency and investor confidence across the creative economy.
“If implemented thoughtfully with the sector, this reform can formalise creative businesses that currently sit outside the tax radar and improve transparency, which will ultimately strengthen investor confidence,” he said.
Also speaking, Jehoshaphat Akinadewo, Regional Head of Quality Control at Omnicom Media Group WeCA, raised concerns about operational complexities such as electronic invoicing and withholding tax thresholds.
“Electronic invoicing may require agencies to connect their accounting systems to the government platform, but the advertising industry raises multiple types of invoices during campaign execution. The question becomes: which invoice should be uploaded to the platform?” he asked.
Akinadewo also pointed to potential cash-flow challenges for smaller agencies.
“A business with turnover below ₦100 million may be exempt from company income tax but still face withholding tax deductions, which could tie up operational cash in tax credit notes,” he said.
Responding to industry concerns, Olarinde emphasised that clear documentation remains the foundation of fair tax assessment.
“If your records clearly show what constitutes your income and what belongs to clients, the tax authority will only tax the actual income. Proper documentation and invoice clarity are key,” he said.
Closing the session, ARCON Director-General Fadolapo described the conversation as the beginning of ongoing engagement between regulators and industry players.
“This is a continuous conversation. There are still many definitions, classifications and industry nuances that we must work through together,” he said.
Fadolapo added that ARCON has established a tax committee with representatives from sectoral groups to further examine the reform’s implications.
“Our role as regulator is to lead advocacy for the industry. We will engage the tax authorities and ensure the sector takes maximum benefit from this new tax framework,” he concluded.