Signed 26 June 2025 and effective 1 January 2026, the Nigeria Tax Act 2025 consolidates the old CITA, PITA, VAT and CGT laws. Here is the old regime versus the new law, side by side โ with the open questions flagged.
PITA graduated bands 7%โ24% on taxable income after a Consolidated Relief Allowance (CRA) of โฆ200,000 + 20% of gross.
New bands: 0% on the first โฆ800,000, then 15% / 18% / 21% / 23% / 25% (top rate above โฆ50,000,000).
Consolidated Relief Allowance (CRA) โ โฆ200,000 + 20% of gross income.
CRA abolished. New rent relief = lower of 20% of annual rent or โฆ500,000. Pension, NHF, NHIS and life-assurance premiums remain deductible.
1% minimum tax on total income where there was little or no taxable income.
Minimum tax removed; replaced by the 0% band. Earners on โค the national minimum wage (โฆ70,000/month) pay no PAYE.
Small company (turnover โค โฆ25M) at 0%; medium (โฆ25Mโโฆ100M) at 20%.
Small company at 0% CIT, exempt from CGT and the Development Levy, and not required to charge VAT. The 20% medium-company rate is gone.
โ ๏ธ Flag: Small-company turnover cap conflicts: NTA s.202 says โฆ50M, NTAA s.147 says โฆ100M (fixed assets โค โฆ250M either way).
30% CIT for large companies; 20% for medium companies.
30% for all non-small companies (a reduction to 25% is allowed by presidential order).
โ ๏ธ Flag: The 25% reduced rate is NOT yet in force โ it needs a presidential order on NEC advice.
Tertiary Education Tax 3% + NITDA 1% + NASENI 0.25% + Police Trust Fund 0.005% โ charged separately.
Single 4% Development Levy on assessable profit replaces all of them. Small and non-resident companies are exempt.
โ ๏ธ Flag: An earlier bill draft proposed phasing 4%โ3%โ2%; the final Act kept a flat 4%.
Flat 10% Capital Gains Tax under a standalone CGT Act.
Chargeable gains taxed within total profits at the 30% CIT rate. Small companies exempt.
Flat 10% Capital Gains Tax.
Chargeable gains taxed at the progressive PIT bands (0%โ25%), integrated with income.
Exempt where disposal proceeds were below โฆ100,000,000 in 12 months.
Exempt where proceeds are below โฆ150,000,000 AND the gain โค โฆ10,000,000 in 12 months. Reinvestment relief for proceeds reinvested in Nigerian shares.
7.5% (raised from 5% on 1 February 2020).
7.5% retained (the proposed 10%/15% increase was dropped). Zero-rated and exempt lists expanded.
Input VAT on services and fixed assets was largely not recoverable.
Input VAT recoverable on all purchases (services and fixed assets) tied to taxable supplies.
No general e-invoicing mandate.
NRS Merchant Buyer Solution (FIRSMBS) โ Peppol BIS 3.0 UBL, phased by turnover: large (live since Aug 2025), medium (go-live Jul 2026), small (go-live Jul 2027).
โ ๏ธ Flag: Go-live and enforcement dates have shifted before โ monitor NRS notices.
Federal Inland Revenue Service (FIRS).
Renamed / re-established as the Nigeria Revenue Service (NRS) under the 2025 reform laws.
Run your own numbers under the new law with the PAYE calculator, Company Income Tax calculator, Development Levy calculator, Capital Gains Tax calculator, and e-invoicing readiness checker.
Source: Nigeria Tax Act 2025; PwC Worldwide Tax Summaries โ Nigeria (Individual & Corporate, reviewed 29 May 2026); EY "Nigeria Tax Act, 2025 highlights"; PwC Nigeria "The Nigerian Tax Reform Acts"; KPMG "The Nigeria Tax Act 2025". As of June 2026.
It was signed on 26 June 2025 and takes effect on 1 January 2026. It consolidates and replaces several laws, including the Companies Income Tax Act, Personal Income Tax Act, VAT Act, and the Capital Gains Tax Act.
New 0%โ25% PIT bands with the first โฆ800,000 tax-free, the Consolidated Relief Allowance replaced by a 20% rent relief (max โฆ500,000), and capital gains taxed at progressive PIT rates instead of a flat 10%.
Small companies pay 0% CIT (and are exempt from CGT, the Development Levy, and VAT); other companies pay 30%. A single 4% Development Levy replaces the TET, NITDA, NASENI, and Police Trust Fund levies, and e-invoicing is being phased in.
No. The 7.5% VAT rate was retained โ the proposed increase to 10%/15% was dropped. The zero-rated and exempt lists were expanded instead.
Informational only โ not tax advice. This guide summarises major changes under the Nigeria Tax Act 2025 and flags points still subject to subsidiary regulation or inter-Act conflict. Verify with the Nigeria Revenue Service or a qualified Nigerian tax professional. See our full disclaimer.