The New Fiscal Reality

The Nigeria Tax Act 2025 (effective January 1, 2026) is the most significant fiscal overhaul in decades, repealing over a dozen legacy laws into a single, unified framework. For businesses, this marks the end of “passive compliance” and the start of “proactive tax architecture.”

Key Provisions and Their Impact

• Capital Gains Tax (CGT) Surge: Increasing from 10% to 30%, this fundamentally shifts the economics of M&A. Any restructuring, asset disposal, or share transfer requires a new tax impact analysis.

• Indirect Transfer Rules: Gains from disposing of shares in offshore entities that derive their value from Nigerian assets are now subject to Nigerian tax. Multi-national groups must review their offshore holding structures.

• 15% Minimum Effective Tax Rate: In line with global OECD Pillar Two principles, large companies must now ensure their effective tax rate meets this 15% floor.

• Small Company Exemptions: If your turnover is ≤ ₦100 million and fixed assets are ≤ ₦250 million, you benefit from key exemptions. Documenting your eligibility is essential.

Navigating the New Enforcement Environment

The Nigeria Revenue Service (NRS) now utilizes AI-driven audit tools. Digital compliance (e-invoicing) is no longer optional. Any gap in reporting is easily flagged by the system, leading to immediate penalties.

Practical Checklist for Directors

• Audit Payroll: Check all employment contracts against the new ₦800,000 threshold and the 25% progressive rate.

• Model the Levy: Ensure the 4% Development Levy is integrated into your financial projections.

• Review Transactions: Treat every potential asset disposal as a high-tax-exposure event until analyzed.