Tinubu Signs Landmark Tax Reform Acts to Simplify Compliance and Boost Nigeria’s Economic Growth

On June 26, 2025, President Bola Ahmed Tinubu signed into law four historic bills that are the most ambitious attempt to redefine Nigeria’s fiscal landscape since independence. The Nigeria Tax Act (NTA), Nigeria Tax Administration Act (NTAA), Nigeria Revenue Service Act (NRSA), and Joint Revenue Board Act (JRBA) collectively known as the Acts are designed to expand government revenues, ease compliance, protect small businesses, and digitalize tax administration. The Acts consolidate patchwork taxation laws, to harmonize overlapping impositions, and incorporate best practices that are widely accepted. The reforms become operative from January 2026 and are already being described as a landmark reboot of the fiscal and economic future of Nigeria.

Nigeria’s tax legislation has, over the years, been largely criticized as burdensome, uncertain, and out of touch with contemporary principles of business. Several levies, outdated frameworks, and patchy enforcement muzzled businesses and government revenues. The new Acts set out to do the contrary by simplicity, clarity, and fairness. The reforms are the most extensive since 1960, according to the Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji. Here below are the key framework of the new Acts

Relief to Citizens and Business

• Small business exemption: Businesses with turnover of less than ₦100 million (or ₦50m under specific provisions) are exempt from Companies Income Tax, Capital Gains Tax, and the new Development Levy.

• Progressive personal income tax: Income up to ₦800,000 per year is tax-free, with progressively higher incomes taxed up to 25%. Compensation for loss of employment or injury is tax-free up to ₦50 million.

• VAT zero-rating of essentials: Basic items like food, education, public transportation, medicine, and agriculture are VAT-zero-rated.

Business and Corporate Taxation

• Capital Gains Tax (CGT): Raised from 10% to 30% for companies, in line with corporate tax rates.

• Development Levy: A 4% unilateral levy merges all the charges like TET, IT levy, NASENI, and PTF.

• Minimum effective tax rate: 15% of net income as a minimum must be paid by multinationals and large firms to prevent profit-shifting.

• Economic Development Incentive (EDI): Tax holiday of 5% on qualifying capital expenditure for five years, in place of pioneer status holidays

.

Structural and Administrative Changes

• Unified Tax Code: Merges taxes into less than ten and provides a simpler compliance regime.

• Nigeria Revenue Service (NRS): FIRS is rebranded to encompass its function as an overarching central tax agency for all tiers of government, and not just the federal government.

• Tax Ombuds Office: Autonomous complaints mediator for taxpayers.