On June 26, 2025, President Bola Ahmed Tinubu signed four major Tax Reform Bills into law. These new laws are designed to simplify taxes, reduce business stress, and protect low-income earners. Here’s a quick breakdown of what’s changed and why it matters to you.
What Are the Four New Tax Laws?
- Nigeria Tax Act (NTA): Combines many small taxes into one simple system and eliminates over 50 overlapping taxes.Why it matters: Makes doing business easier and cuts down on confusing taxes.
- Nigeria Tax Administration Act (NTAA): Sets common rules for how taxes are collected across federal, state, and local governments.Why it matters: Brings order and clarity across all levels of government.
- Nigeria Revenue Service Act (NRSA): Replaces the Federal Inland Revenue Service (FIRS) with the new, independent Nigeria Revenue Service (NRS).Why it matters: Promises better service, more transparency, and fairer enforcement.
- Joint Revenue Board Act (JRBA) ⁹Improves teamwork between government bodies and creates a Tax Ombudsman and Tax Appeal Tribunal.
Why it matters: You now have a clear place to go when tax issues arise.
What Does This Means For You
Whether you’re a small business owner, employee, or consumer, how do these tax acts affect you and your business, and what difference does it make?
Small Businesses (with annual turnover under ₦50M):
- No more company income task
- File simpler returns with no need for audited accounts.
Large businesses
- Corporate tax drops from 30% to 27.5% in 2025 and 25% after that.
- Can now claim back 7.5% VAT on expenses and assets.
Sellers of Essentials (food, rent, baby 8products, healthcare, power, education):
- No more VAT charges
- Families will spend less on basic needs
Charities, Co-ops, Religious & Educational Orgs:
- Enjoy tax incentives, as long as income doesn’t come from business activities.
Low-income earners (earning up to ₦1M/year):
- A ₦200,000 rent relief will be deducted from taxable income.
- Many will now pay zero income tax
Why is This Reform Important
Nigeria’s tax-to-GDP ratio is just 10%, well below the African average of 16–18%. The President’s goal is to reach 18% by 2026, without raising taxes on essentials or overburdening citizens.
Low-income households stand to benefit the most, as many will no longer have to pay income tax while also enjoying price relief on essentials. A typical family spending most of their income on rent, food and transport will see lower costs due to the VAT exemptions.
Small businesses should also see positive changes through more streamlined bureaucracy, which could help boost compliance and encourage informal traders to enter the tax system.
Read more in full here: https://www.nesgroup.org/blog/A-New-Fiscal-Framework:-Key-Provisions-of-Nigeria%E2%80%99s-2025-Tax-Reform-Laws
So What Will You Do With This Information
As a business owner or professional, these changes present an opportunity to:
Review your tax structure
- Re-strategize your business finances
- Take advantage of new incentives
- Educate your team or clients
Will you adapt early and benefit? Or wait and play catch-up later?