From January 1, 2026, Nigeria’s tax system is getting a complete overhaul—thanks to four powerful new laws: the Nigeria Tax Act, the Tax Administration Act, the Nigeria Revenue Service Act, and the Joint Revenue Board Act. These reforms aim to simplify tax rules, reduce rates for businesses, and make life easier for everyday Nigerians. Whether you earn a salary, run a shop, or hustle online, this affects you.
What Changed?
- One unified law now covers company tax, personal income tax, VAT, stamp duty, withholding tax, petroleum profits tax, Capital gains tax and digital services tax.
- Small businesses earning less than ₦25 million a year won’t pay company income tax.
- Medium and large businesses will pay 20% or 30%, depending on their size.
- High-income earners (above ₦50 million yearly) will pay a new top rate of 25% on personal income.
- VAT stays at 7.5% but must now be paid by the 14th of each month, earlier than before.
- Foreign digital companies like streaming services must register and pay VAT if they do business in Nigeria.
Also Read: Nigeria’s 5% Fuel Tax: It’s Not Just About the Money
What Nigeria’s New Tax Law Means for Businesses
- SMEs must keep better records, issue receipts for every sale (even cash), and track VAT payments closely.
- Freelancers and traders will need a Tax Identification Number (TIN), which will be linked to their NIN.
- Multinationals must meet a minimum global tax rate of 15% or pay extra in Nigeria.
- A new 4% development levy applies to big companies, helping fund education and tech.
What It Means for Individuals
- Most salaried workers won’t see big changes, and some may even pay slightly less tax.
- Reliefs for pension, housing fund, and life insurance remain in place.
- Everyone earning money from work or business must have a TIN by 2026 to keep using banks and financial services.
New 2025 Tax Laws Breakdown: What You Pay, What You Do
Corporate Tax (Company Income Tax)
In 2026, the new Company Income Tax will take effect. For Instance, a salon in Abuja earning ₦12 million/year pays ₦0 in company tax. A tech firm with ₦90 million turnover pays ₦18 million in tax (20%).
- Small businesses earning less than ₦25 million/year: Pay 0%
- Medium businesses with ₦25m – ₦100m turnover will Pay 20%
- Large businesses with ₦100m turnover will Pay 30%
- Big companies (₦20 billion+ turnover) must meet a global tax rate of 15% or pay extra.
So as a Business or a business owner it important that know your turnover band, keep proper records of income and expenses and hire an accountant if your business grows past ₦30 million.
Personal Income Tax (PIT / PAYE)
As an income earner in Nigeria, your first ₦800,000 of income will be tax Tax-free. So if you earn ₦800,000 annually, you’re not paying any Tax. However, if you earn above ₦50 million/year, you’ll be taxed at 25%
For Example, a civil engineer earning ₦400,000/month pays about ₦55,500/month in tax. A high-level executive earning ₦60 million/year pays more due to the new top band.
Also to operate or own a bank account in Nigeria, you’ll must have a Tax ID, as mandated in the Nigeria Tax Administration Act.
Individuals will be able to claim reliefs for pension, NHF, and life insurance. So it’s important as a salary earner to check your payslip and ask HR to update tax bands.
Want to Know how much Tax leaves your Salary? Try this Personal Income Tax Calculator in Nigeria
Value Added Tax (VAT)
Under the new tax reform, the VAT rate stays at 7.5%. There’s also a new deadline for paying VAT. It’s to be paid by the 14th of the next month. For example, a boutique collecting ₦900,000 in VAT must pay it by Feb 14 or face a ₦50,000 penalty.
Digital sellers (e.g. online stores, streaming platforms) must register and charge VAT.
For buinesses to stay ontop of their VAT filings they’ll need to:
- Issue receipts for every sale, even cash.
- Use spreadsheets or apps to track VAT.
- Update your invoicing system to meet the new deadline.
Withholding Tax (WHT)
Withholding tax rates will stay the same (5–10% depending on service) under the reform. Also, you can now use WHT credits to reduce other taxes within 24 months.
So, a contractor paid ₦500,000 for services may have ₦25,000 withheld. That amount can reduce future tax bills. Because of this reason you must always collect your WHT certificate and keep it safe, it’s your proof for tax credit.
Stamp Duty & New Levies
- Stamp duty: ₦50 on cheques, ₦500 on guarantees.
- Development Levy: 4% on profits for large companies (₦25m+ turnover)
So, a company making ₦18 million profit pays ₦720,000 as development levy.
It’s important to review contracts and documents for stamp duty charges and budget for this new levy if you’re a medium or large business.
New Tax Laws: What You Should Do Now Against 2026
For individuals, confirm your Tax ID (TIN) via Joint Tax Board portal, keep receipts and records for at least 6 years, and claim your tax reliefs (pension, NHF, insurance).
Meanwhile for businesses, they’ll need to update payroll and invoicing systems to reflect these new changes. Also track VAT and WHT deadlines while training your team and employees on the new rules. As you also review contracts and supplier terms while preparing for January 2026 filings.
Key Dates for the New Nigerian 2025 Tax Bills in Nigeria
- New rules begin on January 1, 2026:
- On January 14, 2026 is the First VAT payment deadline under the new NTA law.
- While June 30, 2026 is the Last day to file 2025 company returns under old rules.
Going Forward
Will this these tax reforms make taxes easier? Who knows? It all depends on enforcement. Now you’ll have to admit that the law is clearer and combines many old rules.
Will these tax laws itraise costs? Possibly, especially for businesses with tight cash flow due to earlier VAT deadlines.
Will it help the economy? That depends on how well the government enforces the rules and uses the money.
This reform is a big step toward modernizing Nigeria’s tax system. It’s designed to be fairer, simpler, and more digital. But it also means more responsibility for everyone. Keeping records, meeting deadlines, and staying compliant.
Whether you’re a business owner, employee, or freelancer, now is the time to prepare. Get your TIN, update your records, and understand how the new rules affect you.
Frequent Asked Questions About Nigeria Tax Acts 2025
What’s the Minimum Tax Rate Under Nigeria’s 2025 Reform?
Big companies that earn over ₦50 billion or part of a multinational group with €750 million+ global revenue must pay at least 15% Effective Tax Rate (ETR). If they pay less, a top-up tax kicks in to close the gap. It’s Nigeria’s way of making sure the biggest players pay their fair share.
What is a Top-Up Tax in the Nigeria Tax Laws 2025
If a big company pays less than 15% of its net income in taxes, Nigeria will charge extra to make sure it hits that 15% mark. That extra is called a Top-up Tax.