Nigeria’s 2025 Tax Reform Acts

Nigeria’s 2025 Tax Reform Acts

By aec_legal October 27, 2025

On 26 June 2025, Nigeria implemented four comprehensive tax reform laws aimed at enhancing revenue generation, promoting investment, and streamlining tax administration. The Nigeria Tax Act (NTA), Nigeria Tax Administration Act (NTAA), Nigeria Revenue Service Act (NRSA), and the Joint Revenue Board Act (JRBA) form the core of this reform. Together, they signify a fundamental shift toward a more unified, transparent, and digitally efficient tax framework.

The Nigeria Tax Act introduces significant relief for small companies by exempting them from Companies Income Tax, Capital Gains Tax, and the newly introduced 4% Development Levy provided they meet specific turnover and asset thresholds. However, professional service providers are excluded from this relief. The Act also ushers in a progressive personal income tax regime, exempting individuals earning ₦800,000 or less per annum, while applying tax rates of up to 25% for higher income earners. Additionally, compensation up to ₦50 million for loss of employment or injury is now tax-exempt.

The NTA also incorporates provisions for the taxation of digital and virtual assets, aligning with the Investment and Securities Act 2025. While this signals regulatory recognition of the digital economy, enforcement challenges persist due to the anonymous and decentralized nature of such transactions.

The Nigeria Tax Administration Act establishes uniform procedures for tax compliance and introduces a mandatory Tax Identification Number (TIN) registration requirement for all taxable persons and entities, including non-residents and MDAs. A major innovation is the introduction of the Electronic Fiscal System (EFS), which digitizes tax recordkeeping and filing to improve efficiency and reduce fraud. Virtual Asset Service Providers (VASPs) are now obligated to file returns, with penalties imposed for non-compliance. Financial institutions must also report high-value transactions exceeding ₦25 million for individuals and ₦100 million for corporates.

The VAT regime remains at 7.5%, but with expanded exemptions and zero-rated categories including staple food items, medical services, educational materials, exported goods and services, and electric vehicles. Businesses are now allowed to recover input VAT on services and capital assets, improving cash flow. Non-resident digital service providers must register for VAT in Nigeria and remit taxes on locally consumed services.

The Nigeria Revenue Service Act establishes a new central tax authority, replacing the Federal Inland Revenue Service. This body is now responsible for collecting all federal taxes and revenues previously managed by other agencies. The Joint Revenue Board Act provides a legal framework for coordinated tax administration and dispute resolution across federal, state, and local levels.

These reforms offer strategic opportunities for businesses, especially SMEs and those already engaged in digital compliance. However, they also impose new reporting obligations and demand immediate operational adjustments. We recommend that businesses evaluate their tax strategies, ensure TIN registration, adopt e-filing platforms, and stay informed on the evolving legal interpretations of these laws.

Our firm is available to assist with tax strategy reviews, compliance audits, and digital tax integration support to help your business navigate this transition successfully.