Who Pays What Now? What Nigeria’s 2025 Tax Act Means for You and Your Business

Nigeria’s new tax law, the Nigeria Tax Act 2025, which commenced on 1 January 2026, is a landmark statute that replaces several separate tax laws with a single, integrated framework for taxing income, transactions and instruments across the federation. Section 1 states that its purpose is “to provide a unified fiscal legislation governing taxation in Nigeria,” while section 2 provides that the Act applies throughout Nigeria to every person required to comply with tax laws, whether in a personal, representative or official capacity. In practical terms, this means companies, individuals, trustees and public bodies now look to one principal law rather than a maze of overlapping statutes.

A crucial feature of the Act is the scope provision in section 3, which defines what is subject to income tax. It provides that “income tax shall be determined in accordance with the provisions of this Act, and imposed on the (a) profits or gains of any company or enterprise; (b) income of any individual or family; and (c) income arising, accruing or due to a trustee, or an estate.” This wording ensures that virtually all organised economic activity—whether carried on by a company, an individual business owner, a family or a trust—falls within the tax net under one coherent set of rules.

Section 4 goes further by listing the specific types of income, profits and gains that are chargeable. These include business or trade profits, employment income, interest, dividends, royalties, rents, premiums, annuities, lottery and gaming winnings, and profits from the disposal of assets, including digital and virtual assets. The express reference to “profits from transactions in digital or virtual assets and similar instruments” is one of the most modern elements of the Act, targeting crypto‑assets and other digital wealth that had previously been difficult to tax under older laws.

The Act also embeds capital gains and corporate taxation into the same framework that governs income tax. Provisions dealing with chargeable gains effectively replace the former stand‑alone Capital Gains Tax Act, setting out how gains from the disposal of chargeable assets—such as land, buildings, securities and certain intangible rights—are computed and taxed. For companies, the re‑enacted corporate tax rules define “assessable profits,” allowable deductions, capital allowances, loss relief and thin‑capitalisation or interest‑limitation rules designed to prevent excessive profit shifting through intra‑group loans.

In addition to income and gains, the Nigeria Tax Act 2025 consolidates indirect taxes and levies. It re‑enacts value added tax provisions within the unified statute, including rules on registration thresholds, taxable supplies of goods and services, zero‑rated and exempt items, and the obligation to issue tax invoices and file periodic VAT returns. Stamp duties and certain transaction‑based charges are similarly brought under the Act, providing a single legal home for duties on instruments like share transfers, property conveyances and some financial contracts.

The law further introduces and rationalises development‑related levies that were previously scattered across different sectoral statutes. Within its provisions, earmarked charges that once operated independently—such as some education‑related and industry‑specific levies—are re‑organised so they can be administered alongside the mainstream tax system, with clearer rules on assessment, collection and remittance. Anti‑avoidance provisions give the tax authority power to disregard artificial or fictitious transactions, adjust related‑party pricing and ensure a minimum level of taxation on certain foreign or cross‑border structures that might otherwise erode the Nigerian tax base.

Together, these detailed provisions make the Nigeria Tax Act 2025 not only a consolidation exercise but also a modernisation of the country’s fiscal architecture, giving taxpayers and administrators a single, more predictable point of reference for rights, obligations and enforcement in the evolving Nigerian

economy.