On June 26, 2025, President Bola Tinubu unveiled the new Tax Reform Bill and signed four significant tax reform bills into law.
The legislation are the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act.
According to officials, these revisions are intended to simplify tax administration, improve compliance, increase revenue production, and build a more business-friendly atmosphere.
They asserted that the changes would include a more progressive personal income tax scheme, higher exemption ceilings for small businesses, and a new development levy.
However, the Tax Reform Bill contains some impediments. Several prominent Nigerians, including opposition parties, labor unions, civil society organizations, and some lawmakers, have expressed reservations about the measure.
They questioned the transparency of the legislative process, the enforcement powers granted to tax officials, and the timing of implementation in light of economic hardship.
The law has also been subjected to deliberate public misrepresentation by those labeled as “tax avoiders” by Nigeria Revenue Service Chairman Zacch Adedeji.
20 things you probably did not know about the new Nigeria Tax Reforms
Individuals earning up to ₦800,000 annually are exempt from tax
Individuals with an annual gross income of above N800,000 to N2,999,999 are expected to pay a 15% tax rate
Individuals with an annual gross income of above $3 million to $11 million are expected to pay a tax rate of 18%
Individuals with an annual gross income of N12 million to N24,999,999 are expected to pay a tax rate of 21%
For individuals with an annual gross income of N25 million and N49,999,999, their tax rate is 23%
Individuals with an annual gross income from N50 million and above have a tax rate of 25%
Tax rates range from 0% to 25% for higher-income earners
Pension contributions, health insurance premiums, and National Housing Fund contributions are deductible
Small companies (turnover ≤ ₦100 million, assets ≤ ₦250 million) are exempt from CIT, CGT, and Development Levy
The corporate tax rate remains at 30%, but with a minimum effective tax rate of 15% for large companies
The Value Added Tax (VAT) rate remains at 7.5%
Essential goods and services like food, healthcare, and education are zero-rated
Development Levy—a 4% levy on assessable profits, replacing multiple levies such as funds related to education, student loans, technology, and securityTax administration and compliance are now digital
Real-time VAT systems and e-invoicingThe reforms also introduce stricter penalties for non-compliance, including fines and imprisonment
The Nigeria Revenue Service (NRS) will oversee tax collection and enforcement
The Nigeria Tax Act (NTA) 2025 consolidates and streamlines over a dozen existing federal tax laws, including the Companies Income Tax Act, Personal Income Tax Act, and Value Added Tax Act, into a single, unified framework
The Nigeria Tax Administration Act (NTAA) 2025 establishes a harmonized procedural framework for the assessment, collection, and enforcement of taxes across all tiers of government, aiming to bring consistency and clarity to the process
The Nigeria Revenue Service (Establishment) Act (NRSA) 2025 formally replaces the Federal Inland Revenue Service (FIRS) with the new Nigeria Revenue Service (NRS), granting it a broader mandate and more autonomy to collect all federal taxes and revenues
The Joint Revenue Board (Establishment) Act (JRBA) 2025 establishes the Joint Revenue Board to improve coordination and data sharing between federal, state, and local government revenue authorities, and also formalizes the Tax Appeal Tribunal and the Office of the Tax Ombudsman for dispute resolution and taxpayer protection.
