Abstract

Author:
Onum Friday Okoh

Doi: 10.26480/jtwe.01.2026.09.18

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

The enactment of the new tax law in Nigeria has sparked a lot of controversy in the way it is likely to affect the flow of foreign direct investment (FDI) in Nigeria. This paper will examine the opportunity and the discouragement offered by the new tax system and this will be done by evaluating its effects on both multinational companies and the domestic economy. Supporters of the act have claimed that simplified taxation procedures, greater transparency, and more comprehensive compliance might make investors feel more confident about the act because less bureaucracy would lead to fewer bureaucratic inefficiencies and the tendency towards double taxation may be reduced. Moreover, there are specific tax breaks and industry￾specific exemptions which are set to lure investments in key sectors which may trigger innovation and infrastructural growth and employment opportunities. On the other hand, opponents argue that high tax rates, heightened reporting standards and fines on failure to comply could deter foreign investors especially those who are seeking cheap sources of operation. The ambiguity of the pragmatic interpretation of some provisions can also be a point of concern as to the unpredictability of regulation that can intensify the perceived risks of investment. The analysis of the interaction of these conflicting views, therefore, identifies the subtle impacts of fiscal policy on cross-border capital flows. The results provide an emphasis on the need to balance income collection with an empowering investment environment that indicates that strategic changes and explicit guidance of the policy are needed to harness the full benefits of the law without causing a downturn effect on foreign investment.