Nigeria: About new tax law

 The new tax law in Nigeria, signed into effect on June 26, 2025, introduces several key changes aimed at streamlining tax administration, boosting revenue, and promoting economic growth. Here are some of the key details:

*Personal Income Tax Reforms*

- Individuals earning ₦800,000 or less per annum are exempt from tax, providing relief for low-income earners.

- A progressive tax structure applies, with tax rates ranging from 0% to 25% for high-income earners.

- Compensation for loss of employment or injury is tax-exempt up to ₦50 million ¹ ².

*Corporate Tax Reforms*

- Small companies with annual gross turnovers of ₦50 million or less and total fixed assets not exceeding ₦250 million are exempt from Companies Income Tax (CIT), Capital Gains Tax (CGT), and the 4% Development Levy.

- The CGT rate for companies has increased to 30%, aligning with the corporate tax rate.

- A minimum effective tax rate of 15% applies to large companies with annual turnovers exceeding ₦50 billion or part of multinational groups earning over €750 million globally ¹.

*Value Added Tax (VAT) Reforms*

- The VAT rate remains unchanged at 7.5%.

- A wider range of essential goods and services are zero-rated, including food items, medical equipment, and educational materials.

- Businesses can now claim input VAT on services and capital assets.

*Other Key Changes*

- A 4% Development Levy replaces multiple sector-specific taxes, simplifying tax compliance for businesses.

- The Nigeria Revenue Service (NRS) replaces the Federal Inland Revenue Service (FIRS) as the central tax authority.

- A Joint Revenue Board (JRB) is established to harmonize tax policies and resolve disputes between different levels of government ¹ ² ³.

*Implementation and Review*

The House of Representatives has commenced a review of the tax laws due to public concerns over discrepancies between the versions passed by the National Assembly and the gazetted copies. The review aims to ensure clarity, protect the integrity of the legislative record, and promote transparency and accountability