ABUJA, Nigeria — President Bola Ahmed Tinubu has officially signaled the start of a new fiscal era for Africa’s largest economy, confirming that the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 have moved into the full implementation phase as of January 1, 2026.
The President described the reforms as a “once-in-a-generation opportunity” to build a competitive fiscal foundation, dismissing calls for further delays or disruptions. The transition marks the most significant overhaul of Nigeria’s tax system since 1999, effectively repealing and consolidating over a dozen legacy laws including the Companies Income Tax Act (CITA) and the Value Added Tax Act.
Key Provisions of the 2026 Tax Regime
The new laws introduce a “pro-people” progressive structure designed to stimulate small business growth and provide relief to the middle class.
- Income Tax Exemptions: Individuals earning N800,000 or less annually are now 100% exempt from personal income tax. According to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy, approximately 98% of Nigerian workers will see their tax burden either eliminated or significantly reduced.
- SME Incentives: Small companies (defined as those with a turnover under N50 million) are now taxed at 0% corporate rate and are exempt from the new Development Levy.
- The 4% Development Levy: To simplify the “multiplicity of taxes,” the government has replaced the Tertiary Education Tax, Police Trust Fund, and NASENI levies with a single 4% Development Levy on assessable profits for large corporations.
- Global Minimum Tax: Aligning with international standards, a 15% minimum effective tax rate (ETR) is now applicable to multinational enterprises and large domestic firms with turnovers exceeding N20 billion
Institutional Realignment: From FIRS to NRS
A central pillar of the reform is the transformation of the Federal Inland Revenue Service (FIRS) into the Nigeria Revenue Service (NRS). The new body is granted expanded autonomy and an AI-driven digital mandate to track underreporting and cross-reference data across bank accounts and payroll systems.
Despite the optimism, some private sector stakeholders have raised concerns regarding the 30% Capital Gains Tax for companies and the abolition of the Consolidated Relief Allowance (CRA). However, the Presidency has pledged to work with the National Assembly to resolve “identified issues” swiftly without halting the rollout.
“Our administration is aware of the public discourse,” President Tinubu stated. “But no substantial issue has been established that warrants a disruption of this reform process. We are moving from a system of many taxes to a system of transparency.”
abo.
