If you’re an entrepreneur running a business in Nigeria, the tax landscape is about to change,and you’ll want to be ready. On June 26, 2025, the Nigeria Tax Act 2025 (NTA) and three companion laws (the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service (Establishment) Act 2025, and the Joint Revenue Board (Establishment) Act 2025) were signed into law by Bola Ahmed Tinubu. The implementation date is set for January 1, 2026.
This represents a major overhaul of Nigeria’s tax system, so now is the time to act to ensure your enterprise navigates the shift smoothly.
What’s changing
Here are some of the key changes you should know about:
- Definition of a “small company” has shifted: Under the reforms, companies with turnover up to about ₦50 million (and fixed assets up to ₦250 million) may qualify for exemption from Companies Income Tax (CIT), Capital Gains Tax (CGT) and the new Development Levy.
- CGT rate for companies will increase: CGT is aligned with corporate tax (about 30 %) for companies.
- Introduction of a 4% Development Levy on assessable profits (for companies that are not small companies).
- Minimum Effective Tax Rate (ETR) for large companies/multinationals: Companies with turnover above certain thresholds will be subject to a minimum tax rate,something to watch if your business is scaling.
- Value Added Tax (VAT) system is modernised: While the standard rate (7.5 %) remains, rules have been expanded regarding input VAT recovery, broader zero-rating of essential goods/services, and mandatory e-invoicing/fiscalisation.
- Tax administration: The old Federal Inland Revenue Service (FIRS) is replaced by the Nigeria Revenue Service (NRS). There’s increased digitisation, stronger compliance mechanisms and harmonisation of tax administration across federal, state and local government levels.
Why this matters for entrepreneurs
- Compliance burden and cost: With new rules, you need to ensure your bookkeeping, invoicing, payroll and VAT systems are compliant. Sloppy compliance could lead to fines, audits or unexpected tax bills.
- Strategic planning: If you are close to the “small company” threshold, you may need to review your business model or timing of revenues/expenses to stay within favourable status.
- Cash-flow impact: The Development Levy and other additions mean costs may rise; prepare for possible tighter margins or delayed expansion.
- Investment decisions: The reforms include tax credits (for qualifying capital expenditure) but have stricter rules; if you’re planning equipment purchases or fixed-asset investment, timing matters. (NESG)
- Digitisation: The shift to mandatory e-invoicing and real-time VAT/fiscalisation means your tech stack (ERP, accounting software, invoicing) must be up to standard.
What you should be doing now
Here’s a checklist for entrepreneurs to act on ahead of January 1, 2026:
- Assess your current status
- Determine your annual turnover, fixed assets, current tax liabilities.
- Identify whether you qualify (or will qualify) as a “small company” under the new definition.
- Review any planned business structure changes or expansions that may push you beyond thresholds.
- Update your accounting & compliance systems
- Ensure you have robust digital record-keeping: invoices, fixed-asset registers, VAT input claims.
- If you are VAT-registered, ensure your systems can handle e-invoicing/fiscalisation as required.
- Train your team (or yourself) on the new rules: what changes for CIT, CGT, VAT, etc.
- Engage with your tax adviser/accountant to understand how the reforms affect your sector and business.
- Plan your investment and business growth
- If you’re planning to buy assets / expand, check whether you can benefit from the tax credit (Economic Development Incentive) and ensure you meet qualifying criteria.
- Where possible, consider timing of revenue and expenditure to optimise which tax status you fall under.
- Review your pricing strategy, cost structure and margin expectations in light of increased tax burden.
- Review business structure and compliance risk
- If you operate in multiple states or have operations across Nigeria or abroad, verify whether the new rules on “force of attraction”, indirect transfer of shares, controlled foreign companies (CFCs) etc apply.
- Make sure you are registered appropriately, have up-to-date tax registrations, and ensure your documentation is clean.
- Communicate this internally and externally
- For your management team or partners, ensure everyone understands the changes and the implications for operations.
- For investors, lenders or financial partners, you may need to update disclosures or business plans to incorporate the changed tax environment.
Final thoughts
The January 1, 2026 effective date gives entrepreneurs a runway to prepare. The reforms aim to broaden the tax base, promote transparency and streamline tax administration, but they also raise the bar for compliance, digital readiness and strategic planning.
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For an entrepreneur in Nigeria, this means you cannot afford to treat tax as a back-office afterthought. It must be integrated into your business strategy: how you grow, how you invest, how you price and how you structure your business.
If you’re running a small business and currently under the threshold for favourable treatment, you have a window to reinforce your position. If you’re scaling and anticipate crossing thresholds, take this time to plan appropriately.
Disclaimer: This blog post is for informational purposes only and does not constitute tax advice. Entrepreneurs should consult their tax advisers or accountants for tailored guidance. To speak to a consultant click HERE
