A New Era: What the Nigerian Tax Acts 2025 Mean for You, Your Family, Business, and Wealth
Era of Transparency: Nigeria’s Redefined Tax Regime
For individuals, enterprises, and families building wealth, the real challenge isn’t just how much is your income or what you earn; it’s also being intentional about how much you keep, how well you protect it, and how you pass it on.
So, when Mr. Ade, a Lagos-based investor and second-generation business owner, sat down with his estate planning advisor at the end of Q3 2025, he had one pressing question:
“I’ve diversified my assets globally for years. How will the new Nigerian tax laws affect these assets and what I’ve built for my children?”
His question captures what many discerning individuals and families across Nigeria are asking today.
We are excited to start a series on the Nigerian Tax Regime with the theme “Era of Transparency: Nigeria’s redefined Tax Regime”.
Our aim is to highlight the key provisions of the Tax Regime and what they mean for your personal wealth, your family structures, your businesses, and the assets you hold both locally and offshore.
We like to say that the recent enactment of the Nigerian Tax Act (NTA) 2025 and the Nigerian Tax Administration Act (NTAA) 2025 has ushered in a new era, one that reshapes how wealth, business, and global income are defined and taxed. These New Acts represent the most comprehensive tax reforms Nigeria has seen in decades, setting a new standard for fairness, inclusiveness, and compliance.
Key Highlights of the 2025 Tax Acts
• Unified and Modernized Tax Framework: The NTA 2025 consolidates major tax laws, from Personal and Company Income Tax, Value Added Tax (VAT), Stamp duty to Capital Gains and others into one cohesive framework. The NTAA 2025 complements it with digital filing, electronic record keeping, and simplified compliance procedures.
• Digital Transformation: Mandatory Tax Identification Numbers (TINs), electronic filing systems, and digital records are now part of everyday compliance. Whether carrying out transactions or registering property, a TIN is now indispensable. This approach enhances efficiency while reducing fraud and manual bottlenecks.
• Fairness and Inclusiveness: From salaried employees to family businesses, freelancers, and digital creators, everyone is now included in the tax net. The new regime promotes equity by broadening participation, determining tax rates according to earnings and closing long standing loopholes.
• Global Reach: Under the NTA 2025, Nigerian residents are taxed on worldwide income. That means income earned abroad, from investments, property, or remote work must be declared locally. However, double taxation is mitigated through foreign tax credits and international cooperation, aligning Nigeria with global tax norms.
• Recognition of Family, Trust, and Estate Structures: Trusts, estates, and family-owned assets and companies are expressly included in the new framework. Trustees, settlors, and beneficiaries of both local and offshore trusts must comply with clear reporting obligations and family enterprises must also register, file annual returns, and maintain transparent records to preserve credibility and continuity.
• Recognition of Digital and Virtual Assets: The Acts officially bring digital assets such as cryptocurrencies, tokens, and NFTs into the taxable ecosystem. Gains from their sale or transfer now fall under capital gains tax, reflecting how wealth has evolved beyond physical assets.
• Clarity for Businesses and Multinationals: The law redefines what constitutes a Nigerian company, extending tax obligations to businesses managed or controlled from Nigeria, even if incorporated elsewhere. A 15% minimum effective tax rate (ETR) now applies to large multinationals, aligning Nigeria with OECD global standards. For compliant businesses, these measures foster credibility and attract investment.
The Series will unpack specific provisions (in different parts) as affects individual and family tax planning to digital assets, trusts, and corporate structures, so you can stay ahead, compliant, and strategically positioned.
Furthermore, we are delighted to invite you to join our exclusive webinar on the 2025 Tax Acts, titled “Era of Transparency: Nigeria’s redefined Tax Regime” bringing together experts to unpack practical tax insights for individuals, families, and businesses.
Register early to secure your spot and be part of the discussion shaping Nigeria’s new tax future.
PART 2
Welcome to part two of our Nigerian Tax Series-focused Newsletter.
The 2025 Tax Acts represent one of the most significant shifts in Nigeria’s fiscal landscape in over a decade, reshaping how personal income, wealth, and cross-border assets are viewed and taxed. This Tax series explores what these changes mean for individuals, those whose financial affairs extend beyond salaries to encompass investments, property holdings, digital assets, and family enterprises.
A Simple Illustration
When Ada received a ₦1,000,000 (One Million naira) innovation grant, she was elated, until her tax adviser asked whether she had declared it. That simple question captures the essence of the 2025 Tax Acts; if it brings in money, it’s on the tax radar. Whether you earn a salary, freelance, run a small business, invest in property, or trade digital assets, you now have tax obligations tied to your earnings.
First Obligation
The first obligation is registration and identification. Every adult must now obtain a Tax Identification Number (TIN), and failure to do so attracts a fine of ₦50,000 initially and ₦25,000 for each month thereafter. Your TIN must appear on all filings, correspondence, and financial documents, including contracts with banks, insurers, and government bodies. In fact, financial institutions are now required to confirm that clients have valid TINs before any transaction can proceed. In effect, your TIN has become the passport to your financial world.
Second obligation
The second obligation is income declaration. Under this regime, everyone earns and everyone pays. For employees, taxes continue to be deducted under the Pay As You Earn (PAYE) system, while entrepreneurs, freelancers, investors, and those with diversified portfolios must self-declare their income, covering profits, rents, dividends, royalties, awards, digital assets, and even competition winnings. If you fall under any or all of these categories, proper recordkeeping is now essential, especially if you have multiple income streams. Delays, underreporting, or failure to file now attract compounded interest, penalties, and in serious cases, prosecution.
Progressive System
Some of the recent controversy has centred on the new tax rates, but in reality, the system is progressive, meaning that the more you earn, the more you contribute. Individuals earning up to ₦800,000 annually are exempt, while income above that is taxed in bands ranging from 15% up to 25% for those earning over ₦50 million a year. The goal is to ensure fairness: lower earners pay less, and higher earners pay proportionally more.
Chargeable Gains
Beyond income tax, the Acts now extend taxation to chargeable gains on the disposal of property in or outside Nigeria, including real estate, shares, digital or virtual assets, and intellectual property. However, there are notable exemptions: personal items below ₦5 million, up to two vehicles per year, your main home, and assets held for charitable or cooperative purposes are excluded. The gains from taxable disposals are then charged at the same rates as your personal income.
Allowable deductions
To maintain balance and fairness, the law also recognizes a number of personal deductions. You can claim reliefs for pension, NHF, and NHIS contributions, life insurance or annuity premiums, interest on personal home loans, and rent relief of up to 20%, capped at ₦500,000 however these can only be claimed with proper documentation. For instance, if you earn ₦10 million annually and claim ₦1 million in eligible deductions, you’ll be taxed on ₦9 million; your net taxable income.
Global Income/Revenue
A notable housekeeping concern is the introduction of global income taxation for residents. If you live in Nigeria but earn income abroad, perhaps through remote work, digital consulting, or foreign investments, those earnings must now be declared in Naira. To prevent double taxation, the law allows a foreign tax credit, meaning you can offset tax already paid abroad, but only up to the lower of the two applicable rates. For example, if you earned ₦2.2 million in Ghana and paid 10% tax there, but Nigeria’s rate is 15%, you’ll only need to pay the 5% difference locally.
Value Added Tax
The law also strengthens Value Added Tax (VAT) compliance. VAT remains at 7.5%, applies to a wider range of goods and services, and everyone who supplies taxable goods or services must collect and remit it. All individuals are now required to file annual tax returns, even for employees whose employer has already deducted PAYE. Failure to keep proper records may lead to presumptive taxation, allowing authorities to estimate your income and tax you accordingly. Late payments are especially costly, attracting a 10% penalty on the unpaid amount, plus compounded interest at the Central Bank of Nigeria’s Monetary Policy Rate plus a ministerial spread for Naira payments, or the Secured Overnight Financing Rate (SOFR) plus 10% for foreign currency remittances.
Practical Practice
So, what does all this mean for you in practical terms? It’s time to treat your tax affairs like personal housekeeping. Begin by listing all your sources of income; employment, business, and investments, and identifying the assets you own, whether real estate, shares, digital tokens, or trusts. Review your documentation, confirm that your TIN is active, and ensure you are properly identified as a taxpayer. The tax system is moving toward greater traceability, so proactive organization will save you from future headaches. Monitor filing deadlines, keep comprehensive records, and seek professional advice if your situation involves cross-border assets, complex structures, or family wealth.
The 2025 Tax Acts have redrawn the lines of personal financial responsibility, ushering in an era that rewards transparency, discipline, and early compliance. Whether you are an employee, entrepreneur, or investor, maintaining good fiscal housekeeping is no longer optional; it is the key to staying compliant and financially secure.
In the second part of this series, we turn our focus to family enterprises, where we will examine how the 2025 Tax Acts are reshaping the way family-owned businesses navigate the new tax realities and the actions to be taken to preserve their values and wealth.
Tax rate | Income range | Annual Taxable Income | Monthly income Equivalent |
0% | ₦0 to ₦800,000 | ₦0 to ₦800,000 | ₦0 to ₦66,667 |
15% | Next ₦2,200,000 | ₦800,001 to ₦3,000,000 | ₦66,668 to ₦250,000 |
18% | Next ₦9,000,000 | ₦3,000,001 to ₦12,000,000 | ₦250,001 to ₦1,000,000 |
21% | Next ₦13,000,000 | ₦12,000,001 to ₦25,000,000 | ₦1,000,001 to ₦2,083,333 |
23% | Next ₦25,000,000 | ₦25,000,001 to ₦50,000,000 | ₦2,083,334 – ₦4,166,667 |
25% | above ₦50,000,000 | ₦50,000,001 above | Above ₦4,166,667/month |
PART 3
Welcome to Part 3 of our Tax Series focused on the taxation of Family Business Enterprises.
For many successful families, the family business is more than a commercial venture; it is a legacy that carries identity, history, and continuity across generations. But as Nigeria’s fiscal landscape evolves, even legacies must adapt. The 2025 Tax Acts have introduced significant changes that will reshape how family-owned enterprises are structured, taxed, and sustained, and understanding these changes is essential to preserving both value and reputation.
Joint and Separate Income
Family enterprises are unique because business and personal interests often intertwine. Under the new regime, where family members jointly earn income, for instance, from family land, rental properties, or a shared venture, and those earnings cannot be distinctly separated, the income will now be treated as family income and taxed as one unit.
However, income from inherited property, shares, or investments remains exempt from this family classification until it is distributed to individual members, at which point each person assumes responsibility for their portion. It is a fine but important distinction, designed to ensure fairness and transparency.
Registration for Tax Identification Number
For incorporated family businesses, compliance begins with registration. Every company must possess a Tax Identification Number (TIN), now automatically issued by the Corporate Affairs Commission upon registration. However, validation remains the company’s responsibility. Ignoring this step attracts a fine of ₦5,000,000, a reminder that tax identity is now as vital as legal incorporation. The TIN must appear on all correspondence, filings, and business documents, and financial institutions, brokers, and insurers are equally bound to reject transactions without it. It is also now an offence for a company to award a contract to a person without a Tax ID.
Definition of a Nigerian Company
Another significant shift in the Acts concerns what qualifies as a Nigerian company. Even if a business is registered abroad, if its management or core operations occur in Nigeria, it will now be taxed as a Nigerian company. This redefinition closes the long standing loopholes that once allowed profits to be booked offshore while operations remained onshore.
Tax Rates
As for corporate tax rates, the Acts take a tiered approach. Companies with annual turnover of ₦50 million or less and assets under ₦250 million qualify as small companies and enjoy a 0% tax rate, though they must still file returns. Larger entities pay 30% on profits. Some ambiguity remains, however, as the Tax Administration Act (NTAA) 2025 defines “small businesses” differently, as those with turnover below ₦100 million, though this is pending further regulatory clarification. What is certain, however, is that professional service firms, regardless of income level, no longer qualify for small company relief and must pay the full tax rate.
Taxable Profits and Deductions
Furthermore, in determining taxable profits, companies must compute income from all sources: sales, gains, dividends, and then deduct eligible business expenses. The Acts allow deductions for rent, staff costs, interest on business loans, pensions, and legitimate pre-operational expenses incurred within six years before start-up. Even corporate generosity is recognized: donations to approved charitable, educational, or public institutions qualify for deductions of up to 10% of profit before tax, while non-cash donations may also qualify for a deduction at the lower of the cost price of the item at the time of purchase or prevailing market value. Research and Development (R&D) expenditure remains deductible up to 5% of turnover, rewarding innovation within the private sector. Personal or unrelated expenses, however, remain strictly excluded. Only expenses that directly enable income generation count toward reliefs. The law’s intent is clear: profits must reflect true business performance, not personal spending disguised as operations.
Development Levy, Capital Gains and Value Added Tax (VAT)
Beyond corporate tax, development and capital gains obligations also apply. Large and Resident companies must now pay a 4% Development Levy, and all companies pay chargeable gains on disposals of assets that attract tax, except for the sale of shares below ₦150 million or where the gain is under ₦10 million. The Value Added Tax (VAT) rate remains 7.5%, but the list of zero-rated items has been expanded, allowing qualifying businesses to recover more input VAT.
Minimum Effective Tax Rate/ Controlled Foreign Company(CFC) Rule
For groups with multinational operations, the landscape has become even more sophisticated. The Acts introduce a 15% minimum effective tax rate for companies earning over ₦50 billion locally or €750 million globally. In effect, if your foreign subsidiaries pay less tax abroad, your Nigerian group must make up the difference, aligning with global tax reforms designed to prevent profit shifting to low-tax jurisdictions.
In addition, the Controlled Foreign Company (CFC) rule now deems retained profits of foreign subsidiaries of Nigerian parent companies as distributed and therefore taxable, even when those profits have not been formally paid out. On the brighter side, companies in priority sectors such as manufacturing, renewable energy, healthcare, technology, and mining continue to benefit from tax holidays and other investment incentives, particularly where reinvestment supports local growth.
Penalties
The penalties for default of these rules are steep: ₦100,000 for the first month of failure to file, ₦50,000 for each subsequent month, and up to ₦1,000,000 daily for refusal to comply with digital reporting requirements. Non-remittance of taxes, inaccurate filings, or failure to cooperate with audits can also lead to other heavy fines or imprisonment.
Tax compliance for companies today goes beyond filing. Every company must now:
- Appoint a designated tax agent;
- File annual self-assessment returns within six months of its year-end or 18 months post-incorporation;
- Submit monthly VAT returns by the 21st of the next month;
- Adopt the new electronic fiscalisation system, ensuring transparent invoicing and data reporting;
- Report any changes in shareholding, ownership, or registered address;
- Disclose any tax planning arrangements to the authorities; and
- Remit PAYE and employee deductions promptly.
The message is unmistakable: tax compliance has become integral to governance. For family-owned enterprises, these laws are not merely administrative; they are structural. This requires not only understanding the statutory obligations but also leveraging available incentives, reliefs, and exemptions in a way that aligns with the family’s long-term vision. They require a thoughtful review of business processes, documentation, and intergenerational governance. As the fiscal environment grows more transparent, families that act early, updating records, reviewing entity structures, and engaging professional estate planners, tax, and legal counsels will be best positioned to preserve wealth while staying ahead of regulatory expectations.
In the next part of this series, we will explore how the 2025 Tax Acts shape the realities of the global Nigerian, examining the tax obligations of individuals and families with global assets, dual residencies, international business interests, and non-resident entities connected to Nigeria.
As part of our Wealth Preservation services, we have experienced Advisors ready to assist you in developing an estate plan that protects, preserves, and sustains you and your family’s wealth for generations.
Get in touch with one of our professionals today by sending an email to contact@fiduciaryservicesltd.com.
