President Bola Ahmed Tinubu approved the new tax reform amendment bill into law on June 26, 2025. The laws are: the Nigeria Tax Act (NTA), the Nigeria Tax Administration Act (NTAA), the Nigeria Revenue Service Act (NRSA), and the Joint Revenue Board Act (JRBA).
These new Nigerian tax laws aim to help the economy grow, bring in more money, improve how businesses operate, and make tax collection more efficient at all levels of government.
What do you need to know about this new tax reform amendment bill? Let’s get started.
1) Introduction of Development Levy Tax Reform
Big Nigerian companies have to pay a 4% “Development Levy,” calculated from their profits before taxes.
The Development Levy merges the Tertiary Education Tax (TET), Information Technology Levy (IT), the National Agency for Science and Engineering Infrastructure (NASENI) levy and the Police Trust Fund (PTF) levy.
2) Increased Capital Gains Tax (CGT) Rate Reform
Companies will now pay a 30% Capital Gains Tax, as the NTA raised the rate from 10%.
This puts the CGT and income tax rates on the same level, stopping people from playing the system to avoid taxes on investments. For an individual, how much tax you pay on capital gains depends on your income level.
Small businesses don’t have to pay Companies Income Tax, Capital Gains Tax, or the new Development Levy anymore.
Small businesses are those that make NGN100 million or less a year (it used to be NGN25 million) and have less than NGN250 million in assets.
The NTA is adding CGT on indirect transfers of shares in Nigerian companies. Thus, Nigerian CGT will apply if someone sells shares in intermediary holding companies abroad (with treaty exemptions).
The amount you can make from selling shares in Nigerian companies without paying tax is now up to NGN150 million in a year, but only if your profit isn’t over NGN10 million.
4) Effective Tax Rate (ETR) Reform
Companies in Nigeria that are part of a big international group (making over EUR750 million total) or have yearly sales of at least 50 billion Naira will now pay at least 15% tax on their “Net Income.”
Net income is profits before tax, not including certain types of income, except for life insurance companies, which have a different definition of net income.
If you’re a Free Zone company, you don’t have to pay the ETR when exporting from Nigeria, unless you’re part of a multinational group. The Nigerian parent company will have to pay extra taxes if its subsidiaries paid less than 15% tax.
5) Personal Income Tax (PIT) Reform
The NTA adjusts how much tax you pay based on your income. If you make 800k or less a year, you don’t have to pay taxes on your earnings anymore. People who make more than that will pay more, up to 25%.
The law raised the tax-free amount for job loss or injury payouts from 10 million to 50 million Naira.
The new law also makes it clear how taxes work on worldwide income for residents.
Before this, the definition of “residence” was unclear, so people had varied interpretations. If you live in Nigeria or work here and don’t pay taxes elsewhere, you’ll pay the income tax.
6) Economic Development Incentives (EDI) Tax Reform
With introducing the EDI, the Acts replace the “pioneer” tax holiday incentive.
If your company qualifies, you could get a 5% tax credit each year for five years on capital spending, as long as you bought the equipment within five years.
If a company has not used its tax credits or capital expenses, it can postpone them for five years. You’ll lose any unused credits after this date.
7) Value Added Tax Reform
The NTA is making more things tax-free, including things like groceries, medicine, books, electricity, medical care, tuition, and exports (besides oil and gas).
So, businesses selling these things can now get their VAT money back, even though they don’t charge it.
The VAT is still 7.5%. Nigeria’s new VAT system follows global standards, so you can get a VAT refund on all your purchases, including services and assets.
If your business provides services and you pay VAT on things you buy, you can now claim that VAT back, but only if what you sell also has VAT on it.
Businesses in Nigeria now have to use e-invoicing, thanks to the new VAT rules. This makes Nigeria a leader in e-invoicing in Africa. Companies in Nigeria must now use the government’s VAT collection system.
FAQs on Tax Reform Amendment Bill 2025
Can you tell me about the 2025 Tax Reform Amendment Bill?
The 2025 tax bill is a reform to change the current tax rules. It wants to get more money, make taxes easier, and be more open about how Nigeria handles money.
What’s the deal with the government’s new amendment?
This amendment wants to update Nigerian taxes, catch tax evaders, and make sure everyone pays what they owe. It’s also meant to help meet the government’s economic goals.
Has the bill become law?
Yes. The 2025 Tax Reform Amendment Bill is out and signed into law by President Bola Ahmed Tinubu.
Conclusion
Things are very different now for taxes in Nigeria because of these new tax reform amendment bill signed into law. Businesses need to inspect their taxes and make sure everything’s in order.
Set up training sessions for all concerned persons about how the reforms will impact your company. Make sure your people are ready for the new tax laws by training them.
Check out how tax laws impact the company’s structure, operations, finances, and compliance. That means looking at things like supply chains, business deals, and how we pay people.
Stay informed about tax laws from the government. Also, the Tax Ombuds office is there to help you deal with tax issues and settle disputes.