Nigeria’s tax reforms have been gazetted—small businesses now exempt, larger firms see rate cuts, and the 5% fuel surcharge is on hold.
Nigeria’s long-awaited tax reform laws have finally been published in the official gazette, signaling the start of a major overhaul aimed at making tax rules simpler and more business-friendly. The new framework, combining four separate laws into one cohesive set, now has legal force.
The restructured statutes—namely the Nigerian Tax Act, Tax Administration Act, Revenue Service Establishment Act, and Joint Revenue Board Act—will streamline tax administration and replace outdated colonial-era rules, a move long overdue to enhance clarity and efficiency in the system.
The operational dates have been set: the NTA and NTAA become effective on January 1, 2026, while the NRSEA and JRBEA are already in motion from June 26, 2025.
Small businesses stand to benefit significantly. Companies with annual turnover below ₦100 million and fixed assets under ₦250 million are now exempt from corporate tax, capital gains tax, and a newly introduced development levy. Larger firms may qualify for reduced rates, dropping from 30% to potentially 25% if approved by presidential order.
Qualified investments in priority sectors gain a 5% annual tax credit under the new incentive scheme, prompting renewed interest in economic development projects. Additionally, paying taxes on foreign-currency transactions becomes easier, with official conversion to naira at current exchange rates.
A significant figure behind the reform—tax-to-GDP ratio—has risen from around 10.8% to 13.5% in recent years, though it still remains low by global standards. Addressing multiple, low-yield levies dispersed across various authorities, the reform aims to close a tax gap estimated to be around 70%, where much of the revenue owed has never been collected.
The controversial 5% fuel surcharge, which grabbed headlines earlier, will not come into effect immediately. Finance officials clarified that the surcharge—though included for the sake of harmonization—is not a new tax and lacks a commencement order, alleviating fears of immediate increases at the pump.
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