Nume Ekeghe posits that the Nigeria Tax Administration Act, 2025, signed into law by President Bola Tinubu will overhaul the country’s tax system, ensure compliance and promote fairness

In a bold move to reposition Nigeria’s tax landscape for long-term sustainability, the federal government has signed into law a sweeping tax reform package under the Nigeria Tax Administration Act (NTAA) 2025. This legislation considered a foundational pillar of President Bola Ahmed Tinubu’s fiscal reset, followed months of stakeholder engagements and expert consultations through the Presidential Fiscal Policy and Tax Reforms Committee.

The law introduces a unified and modern tax framework designed to boost voluntary compliance, simplify administration, and support broader economic growth. It also establishes new thresholds, incentives, and digital processes aimed at aligning Nigeria’s tax policy with global best practices.

According to the President, Chartered Institute of Taxation of Nigeria (CITN) Innocent Ohagwa, the legislation will greatly engender a more inclusive and transparent tax system; “one that recalibrates how taxes are designed and collected while encouraging voluntary compliance and widening the tax net without stifling enterprise.”

Unified Structure for Efficiency, Accountability

One of the most significant features of the NTAA 2025, is the establishment of a unified tax administration system that centralises oversight and reduces duplication. It designates the Nigeria Revenue Service (NRS) as the lead federal body overseeing tax administration for companies, non-residents, and certain federal employees, while empowering relevant state tax authorities (RTAs) to manage personal income tax and related levies within their jurisdictions.

The Act also encourages seamless collaboration between tax bodies. When non-compliance is identified outside an authority’s domain, the matter can be referred or audited jointly, an innovation intended to reduce audit gaps and enforcement delays.

This streamlined architecture, paired with statutory timelines for actions such as issuing Tax Identification Numbers (TINs) or handling objections, enhances the efficiency of tax administration across all tiers of government.

Broadening Tax Net

In a significant step toward widening the tax base, the NTAA introduces structured processes to bring more Nigerians especially those in the informal economy into the tax system. Small businesses and low-income earners are encouraged to file simplified returns, while comprehensive identification procedures and penalties are now in place to ensure compliance.

Importantly, the Act also introduces new requirements for Virtual Asset Service Providers (VASPs), including mandatory reporting of cryptocurrency and digital asset transactions, KYC (know your customer) standards, and defined tax liabilities. According to the law, non-compliant VASPs risk both license suspension and steep fines reaching N10 million for the first month of default and N1 million for each subsequent month.

Making Room for the Digital Economy

In a major push toward modernisation, the NTAA mandates the adoption of electronic fiscal systems (EFS) for recording, invoicing, and transmitting tax data. Businesses will now operate under a fiscalised VAT regime, with e-invoicing and digital filing integrated directly into tax authority platforms.

Non-compliance with EFS adoption is punishable with stiff administrative penalties starting from N1 million and escalating daily. This measure reflects a firm stance on embracing automation and reducing the inefficiencies and fraud risks that typically accompany manual processes.

“The focus on digitalising tax filing is one of the Act’s most impactful reforms,” according to a KPMG analysis. “It aims to minimise errors, fraud, and inefficiencies in the tax process. It also streamlines tax administration, providing taxpayers with quicker access to their records and reducing the potential for omissions.”

Incentivising Compliance, Protecting Equity

The NTAA 2025 does not just aim to tax more, it aims to tax better. In line with this goal, a number of progressive reforms were introduced to balance the burden across income classes and reduce the complexity of tax obligations.

Among the key changes, Progressive Personal Income Tax (PIT) Rates, Individuals earning N800,000 or less annually will now be exempt from PIT. Higher earners will be taxed up to 25 per cent, with an expanded exemption threshold for loss-of-job compensation rising from N10 million to N50 million.

A new 4 per cent Development Levy will now be imposed on large and medium companies (excluding small businesses). This levy consolidates several existing levies—such as TETFund, NASENI, and IT Levy—into one, thereby reducing the administrative load on businesses. Also, Capital Gains Tax (CGT) Increase, the CGT for corporate entities is raised from 10 per cent to 30 per cent, aligning it with Company Income Tax (CIT) and closing a long-exploited tax arbitrage gap.

Economic Development Incentive (EDI), replacing the controversial Pioneer Status Incentive, the EDI offers a 5 per cent annual tax credit for qualifying capital expenditures incurred within five years of a company’s production date.

These measures are seen as a thoughtful recalibration of the system toward fairness and growth. “It is a clear demonstration of the political will required for entrenching equity, fairness, efficiency, and economic resilience in our tax and fiscal framework,” said Mr. Innocent Ohagwa, President of CITN.

Elevating Compliance, Dispute Resolution

Perhaps one of the most transformative features of the NTAA is the creation of a Tax Ombudsman’s Office. This body is tasked with mediating disputes, handling taxpayer complaints, and liaising with authorities to ensure fair treatment. It introduces an independent layer of accountability into Nigeria’s tax ecosystem, helping to rebuild taxpayer trust.

The NTAA also strengthens refund mechanisms requiring that all validated tax refunds be processed within 90 days and codifies taxpayers’ rights to dispute resolution and transparency. The standardisation of objection procedures and return filing calendars aims to eliminate ad-hoc enforcement and arbitrary assessments.

Implementation and Monitoring

With its sweeping provisions, the NTAA 2025 offers a roadmap for sustainable tax reform. But its impact will hinge on execution.

 CITN has pledged continued support in capacity-building, policy awareness, and stakeholder engagement. “We look forward to supporting the smooth implementation of the law, especially in terms of professional guidance, awareness, advocacy, and capacity building,” Ohagwa said.

While there are transitional challenges, especially for SMEs adjusting to new digital and compliance expectations, the long-term outlook remains optimistic. If faithfully implemented, the NTAA could mark a turning point in Nigeria’s fiscal narrative, enhancing investor confidence and delivering a more transparent and productive revenue system.

As the legislation takes effect, its success will be measured not just by revenue growth, but by the trust it fosters between citizens, businesses, and the state. In that sense, the NTAA is more than a reform, it is a fresh social contract.