Nigeria’s 2025 Tax Reform Acts: What Changed and Why It Matters

On 26 June 2025, President Bola Tinubu signed four tax reform bills into law. Together they are the most significant overhaul of Nigeria’s tax system in decades, and they took effect on 1 January 2026. The Presidency confirmed in December 2025 that there would be no delay to the commencement date.

The four Acts

• Nigeria Tax Act, 2025 (NTA) — the new charging law. It consolidates and replaces the Personal Income Tax Act, Companies Income Tax Act, Value Added Tax Act, Capital Gains Tax Act, Petroleum Profits Tax Act and Stamp Duties Act.
• Nigeria Tax Administration Act, 2025 (NTAA) — one set of rules for registration, filing, assessment, collection, e-invoicing, penalties and disputes across federal, state and local tax authorities.
• Nigeria Revenue Service (Establishment) Act, 2025 — replaces the Federal Inland Revenue Service (FIRS) with the Nigeria Revenue Service (NRS).
• Joint Revenue Board (Establishment) Act, 2025 — sets up the Joint Revenue Board, the Office of the Tax Ombud and the framework for the Tax Appeal Tribunal.

The headline changes

• Personal income up to ₦800,000 a year is now taxed at 0%, with progressive rates from 15% to 25% above that.
• The Consolidated Relief Allowance (CRA) is abolished and replaced by a rent relief of 20% of annual rent, capped at ₦500,000.
• Small companies — gross turnover of ₦100 million or less and fixed assets of ₦250 million or less — are exempt from companies income tax, capital gains tax and the development levy.
• A single 4% development levy replaces several earmarked levies, including the tertiary education tax, IT levy, NASENI levy and Police Trust Fund levy.
• Large companies and multinational groups face a 15% minimum effective tax rate.
• Capital gains are no longer taxed at a flat 10%: companies pay at the corporate rate and individuals at their personal income tax rates.
• VAT stays at 7.5%, but input VAT on services and fixed assets becomes recoverable, and e-invoicing through the NRS Electronic Fiscal System is now mandatory.

What it means for companies

For most businesses, 2026 is a transition year. Payroll systems need new PAYE tables. Finance teams need to rework tax provisions for the development levy and, for larger groups, the minimum tax. VAT processes need to change twice over: to claim newly recoverable input VAT, and to issue invoices through the NRS e-invoicing platform. Contracts, group structures and incentive positions (Pioneer Status is replaced by the new Economic Development Tax Incentive) should all be reviewed.

What it means for income earners

Low earners, including those on the national minimum wage, pay little or no income tax under the new bands. Middle earners who rent their homes may see a modest change either way, depending on their rent and pension contributions. High earners — particularly those above ₦50 million a year — will generally pay more, as the top marginal rate rises to 25% and the CRA disappears.

What to do now

• Confirm your company’s and employees’ tax registration status — the NTAA ties TINs closely to national identity numbers.
• Update payroll for the new PAYE bands and rent relief documentation.
• Re-run your 2026 tax provision with the development levy and, if relevant, the 15% minimum tax.
• Check your e-invoicing onboarding date with the NRS.
• Speak to an adviser before restructuring, disposing of shares or claiming incentives.