Signed into law on June 26, 2025, the Nigeria Tax Reform Bill 2025 marks one of the most ambitious overhauls of the country’s tax system in decades.
It’s not just a legal update, it’s a complete redesign of how Nigeria collects, manages, and enforces taxes across all levels of government.
Whether you’re a civil servant, freelancer, business owner, or corporate employee, this reform directly impacts your paycheck, your filings, and even how you access public services.
Checkout: Free PAYE Calculator in Nigeria
A Simplified Tax Structure
The New tax reform bundles Nigeria’s complex tax laws into four major Acts aimed at creating a simpler, digital-first system:
- Nigeria Tax Act (NTA): Revises tax brackets and rules for individuals and businesses.
- Nigeria Tax Administration Act (NTAA): Modernizes filing, tracking, and enforcement.
- Nigeria Revenue Service Act (NRSA): Establishes a unified federal tax authority. Essentially turning FIRS to NRS.
- Joint Revenue Board Act (JRBA): Coordinates tax collection across federal, state, and local levels.
Together, these Acts replace over a dozen outdated tax laws, reducing duplication and improving consistency nationwide.
What’s Changing in Tax Rates
The new tax brackets are designed to make the system fairer and more progressive:
| Annual Income (₦) | Tax Rate |
|---|---|
| ₦0 – ₦800,000 | Exempt |
| ₦800,001 – ₦1,200,000 | 10% |
| ₦1,200,001 – ₦3,600,000 | 15% |
| ₦3,600,001 – ₦7,200,000 | 20% |
| ₦7,200,001 – ₦12,000,000 | 25% |
| ₦12,000,001 and above | 30% |
These rates apply after allowable deductions.
Key Point: The first ₦800,000 of annual income is tax-exempt, which protects low-income earners and those close to minimum wage.
So, who does this apply to? This bracket applies to individual taxpayers, including:
- Salaried employees
- Civil servants
- Freelancers
- Gig workers
- Sole proprietors (for personal income, not business profits)
Corporate entities and registered businesses are taxed separately under the Corporate Income Tax (CIT) and other relevant Acts.
Micro-enterprises and freelancers can also opt for flat-rate tax regimes that simplify reporting and payment.
Read Also: What is Withholding Tax in Nigeria
How Different Groups Are Affected by The Nigeria Tax Reform Bill 2025
Civil Servants:
- Payroll systems will auto-adjust new rates.
- Housing and transport allowances become partially taxable.
- Pension deductions remain, but with new contribution caps.
Freelancers & Gig Workers:
- Can choose a 7.5% flat-rate tax on gross income.
- Must register on the Unified Taxpayer Portal for quarterly filings.
- Income from digital platforms (YouTube, Upwork, etc.) is now explicitly taxable.
Small Business Owners:
- Firms earning under ₦25 million yearly qualify for presumptive tax a fixed-rate system for easier compliance.
- VAT registration is mandatory once turnover exceeds ₦15 million.
- Audits will now be risk-based, not random.
Corporates:
- Corporate tax remains 30%, but with fresh incentives for:
- Renewable energy projects
- Local manufacturing
- Youth employment initiatives
What Is “Presumptive Tax”?
It’s a simplified system for small businesses that don’t have complex accounting.
Instead of calculating exact profit, you pay a fixed percentage based on estimated income.
It’s meant to make compliance easier and broaden the tax base.
Read Also: Nigeria’s New 23% Tax on Freelancers
A Digital-First Era for Nigerian Taxpayers
The Unified Taxpayer Portal will serve as Nigeria’s one-stop digital tax platform for registration, filing, payments, and receipts.
Every taxpayer will need a Tax Identification Number (TIN) to access most government services.
Even more, tax clearance certificates will soon be required for school admissions, job applications, and property transactions, a clear signal that compliance is becoming fully integrated into daily life.
The Nigeria Tax Reform Bill 2025 simplifies tax laws, updates rates, and embraces digital governance.
By unifying federal and state systems and introducing easier filing options, the reform aims to make tax compliance simpler, fairer, and more transparent.
For individuals and businesses alike, this marks the beginning of a digital, inclusive, and enforceable tax era in Nigeria.