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Tax & Compliance
Nigeria Tax Act 2025: Every Change, Before and After
The clearest way to understand the reform is to put the old rule next to the new one. Here is every material change, side by side.
8 September 2026 7 min readBy ereQa Team · Editorial team at ereQa
Reform summaries tend to describe the new rules as though the old ones never existed, which makes it hard to see what actually moved. This one puts them side by side.
Company taxation
| Before 2026 | From 1 January 2026 | |
|---|---|---|
| Small company CIT | Reduced rates applied by size band | 0% — full exemption |
| Small company definition | Turnover-based, lower threshold | Turnover ≤ ₦100m AND fixed assets ≤ ₦250m |
| Standard CIT rate | 30% | 30% — unchanged |
| Education tax | Tertiary Education Tax, separate charge | Folded into the 4% Development Levy |
| Technology levies | NITDA and NASENI, charged separately | Folded into the 4% Development Levy |
| Police Trust Fund levy | Separate charge | Folded into the 4% Development Levy |
| Capital Gains Tax for small companies | Applied | Exempt |
Personal taxation
| Before 2026 | From 1 January 2026 | |
|---|---|---|
| Consolidated Relief Allowance | Higher of ₦200,000 or 1% of gross, plus 20% of gross | Abolished |
| Tax-free band | ₦300,000 at 7%, effectively low | First ₦800,000 at 0% |
| Top rate | 24% | 25% above ₦50,000,000 |
| Rent relief | None | 20% of rent, capped at ₦500,000 |
| Minimum tax | 1% of gross income | Abolished |
| Number of bands | Six narrow bands | Six bands, much wider at the bottom |
The shape of the change is a flatter, more generous bottom end. Someone on ₦1,200,000 a year now faces an effective rate under 4%. Someone on ₦30,000,000 faces around 17%. Under the old structure both figures were higher.
VAT
| Before 2026 | From 1 January 2026 | |
|---|---|---|
| Standard rate | 7.5% | 7.5% — unchanged |
| Zero-rated list | Narrower | Widened to more food, medical and educational supplies |
| Input VAT recovery | Oriented towards goods for resale | Extended to services and fixed assets |
| Filing deadline | 21st of the following month | Unchanged |
Administration
| Before 2026 | From 1 January 2026 | |
|---|---|---|
| Federal tax authority | Federal Inland Revenue Service (FIRS) | Nigeria Revenue Service (NRS) |
| Governing statutes | CITA, PITA, VAT Act, CGTA and others, separately | Consolidated into the Nigeria Tax Act |
| Procedure | Spread across each statute | Nigeria Tax Administration Act |
| Federal/state coordination | Joint Tax Board | Joint Revenue Board |
| Invoicing | Free-form documents accepted | Structured e-invoicing being rolled out |
Who is better off
Broadly: small companies, and anyone earning at the lower end. A company under both thresholds went from a reduced-rate CIT bill plus four levies to nothing at all. A worker on ₦1,200,000 went from a meaningful liability to a nominal one.
Less clearly better off: higher earners who relied on the CRA, and asset-heavy companies whose balance sheet pushes them over the ₦250 million test despite modest revenue.
Worse off in practice, though not on paper: businesses with informal records. Almost every relief in the new Act is conditional on being able to evidence something — turnover, assets, rent paid. The rules are more generous and less forgiving at the same time.
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This is general information, not tax advice. Thresholds and reliefs turn on facts specific to your business, and the Nigeria Revenue Service issues clarifications as the Act beds in. Confirm your position with a licensed tax adviser before you file.
Frequently Asked Questions
What is the biggest change in the Nigeria Tax Act 2025?
For small businesses, the complete exemption from Companies Income Tax for companies with turnover of ₦100 million or less and fixed assets of ₦250 million or less. For individuals, the rise in the tax-free band to ₦800,000 and the abolition of the Consolidated Relief Allowance.
Did anything get worse under the new law?
Higher earners lose the Consolidated Relief Allowance, which for some is not fully offset by the larger 0% band and rent relief. Reliefs are also more heavily documentation-dependent, which is a real cost for businesses with informal records.
Do the old rules still apply to anything?
Yes — to periods before 1 January 2026. A 2025 assessment is dealt with under the old law even if you file it in 2026.
Is the Consolidated Relief Allowance really gone?
Yes, entirely. Any payroll system or calculator still applying it is producing figures under repealed rules.
eT
ereQa Team
Editorial team at ereQa
Written by the people who build ereQa, with Nigerian tax content checked against the Nigeria Tax Act 2025 and the NRS guidance current at publication. General information, not tax advice.
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