In a historic overhaul of Nigeria’s tax and revenue architecture, President Bola Tinubu has signed into law four pivotal tax reform Acts, marking a turning point in the country's economic governance. The signing ceremony at the Presidential Villa in Abuja was attended by senior government officials, including the Senate President, House Speaker, Minister of Finance, and Attorney General.
The new legislation, passed by the National Assembly after extensive consultation with public and private stakeholders, aims to streamline tax policy, improve compliance, and expand the revenue base.
Overview of the Four New Acts
Nigeria Tax Act (NTA)
Merges outdated and fragmented tax laws—including CITA, PITA, CGTA, and VAT Act into a consolidated, simplified tax code.
Enhances clarity and efficiency in business taxation.
Nigeria Tax Administration Act (NTAA)
Creates a standardized legal and operational structure for tax administration at all government levels.
Eliminates jurisdictional overlaps and promotes nationwide consistency.
Nigeria Revenue Service (Establishment) Act (NRSEA)
Transforms the Federal Inland Revenue Service into the more autonomous Nigeria Revenue Service (NRS).
Expands its role to include digital audits, enforcement, and collection of non-tax revenues.
Joint Revenue Board (Establishment) Act (JRBEA)
Establishes a collaborative platform for coordinating tax policy and administration.
Introduces two key bodies:
The Tax Appeal Tribunal (TAT) with judicial powers for dispute resolution.
The Office of the Tax Ombudsman to handle taxpayer complaints and protect rights.
Key Reform Features
1. Streamlined Tax Code
Over 50 levies eliminated and integrated into a coherent framework.
Designed to increase ease of doing business.
Goal to raise Nigeria’s tax-to-GDP ratio from 10% to 18% by 2026.
2. Introduction of New Tax Instruments
Development Levy: 4% on company profits, excluding small businesses.
Minimum Effective Tax Rate: 15% for large firms with turnover of ₦50bn+ or €750m+.
Fossil Fuel Surcharge: 5% levy on petroleum products.
Digital Asset Tax: Applies to crypto, NFTs, and other virtual assets.
Capital Gains Tax: Increased from 10% to 30% for corporate entities.
3. Expanded VAT Coverage
Maintains a 7.5% VAT rate.
VAT extended to digital services, SaaS, and online platforms.
Key exemptions: food, education, transport, and healthcare.
New revenue-sharing formula: 50% equally to states, 30% by consumption, and 20% by population.
Mandatory adoption of e-invoicing and VAT automation tools.
4. Strengthened Tax Administration
NRS is empowered to conduct asset tracing, freezing, and recovery.
Full autonomy is granted to state-level tax authorities.
Centralized taxpayer database and digital audit systems deployed.
Whistleblower system introduced with protections and incentives.
Enhanced penalties for non-compliance.
5. Enhanced Taxpayer Protections
Tax Ombudsman to investigate and resolve grievances.
TAT rulings are binding with clear timelines.
Broader definition of taxable income, including non-cash and offshore assets.
Strategic Business Considerations
Compliance Timelines:
CIT: 6 months post-financial year-end
PAYE: January 31
Individual Returns: March 31
VAT & WHT: 21st of each month
Incentives:
Small firms (< ₦100m turnover) exempt from CIT, CGT, and Development Levy.
Large corporations eligible for input VAT credits and tax loss carryforwards.
Capital investment credits available via Economic Development Incentive (EDI).
Disclosure Requirements:
Mandatory disclosure of all tax planning arrangements.
Penalties for non-compliance: ₦100,000/month or ₦5m+ for major violations.
Economic Outlook
Revenue Mobilisation: Reforms aim to significantly boost tax collection and efficiency.
Investor Confidence: Transparent, modern tax rules are expected to attract local and foreign capital.
Social Development: New revenue expected to support key sectors—education, healthcare, and infrastructure.
Equity: Progressive structure shields low-income earners and essential services from heavy taxation.
Conclusion
President Tinubu’s endorsement of these four legislative acts represents a sweeping fiscal transformation. The reformed framework promises simplicity, transparency, and fairness, paving the way for sustainable economic development.
With implementation slated for January 1, 2026, businesses and individuals are encouraged to engage early, adapt strategies, and align with the new compliance environment. This reform is more than a tax update—it’s a comprehensive reset of Nigeria’s economic foundation.
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