08/11/2025
The Federal Inland Revenue Service (FIRS) of Nigeria is set to officially launch and discuss the "Nigeria Tax Reform Acts" on Monday, November 10, 2025, during a stakeholder engagement session. The new laws themselves, which were signed by the President in June 2025, are largely expected to take effect from January 1, 2026.
Detailed Summary of the New Tax Reform Laws
The reforms aim to streamline Nigeria's tax system, eliminate multiple taxes, protect low-income earners, and boost economic growth and transparency.
Key Structural and Administrative Changes
The FIRS will be renamed the Nigeria Revenue Service (NRS), with an expanded role to collect all federal tax and non-tax revenues. The reforms consolidate multiple federal tax laws into one statute to improve administration. A Joint Revenue Board will coordinate tax policy, and a Tax Ombudsman office will address taxpayer issues. The laws also require the use of a Taxpayer Identification Number (TIN) and digital systems like e-invoicing and real-time VAT reporting for registered businesses.
Impact on Individuals
Individuals earning up to ₦1 million annually are exempt from Personal Income Tax (PIT). A higher PIT rate of 25% applies only to those earning over ₦50 million yearly. A new rent deduction of 20%, capped at ₦500,000, is introduced. Nigerians working remotely for foreign employers are exempt from PIT.
Impact on Businesses
Small companies with an annual turnover of ₦50 million or less are exempt from Companies Income Tax (CIT), VAT, and the new Development Levy. The standard CIT rate for large companies remains 30%, but can be reduced to 25% by presidential order, effective in 2026. The VAT rate remains 7.5%, with exemptions for essential goods and services. A new 4% development levy on assessable profits replaces
existing levies for non-small companies. A 5% tax credit for capital expenditures over five years is available for companies in priority sectors.
