Omolabake Fasogbon

Beyond their macroeconomic implications, Nigeria’s new tax laws place fresh responsibilities on businesses and finance professionals, particularly in the area of compliance. To minimise risks and maximise opportunities, companies and individuals must begin adjusting well ahead of the January 1, 2026 rollout.

 These reforms are designed to cover all economic classes—employers, employees, and even self-employed “hustlers”, all confronted with a new tax reality. The overarching goal is to expand Nigeria’s tax net, improve revenue generation, and strengthen fiscal liquidity.

The laws, published in the official gazette, include the Nigeria Tax Act (NTA), the Nigeria Tax Administration Act (NTAA), the Joint Revenue Board (Establishment) Act (JRBEA), and the Nigeria Revenue Service Establishment Act (NRSEA), all aim to streamline the tax system, broaden the tax base, and aim to promote economic growth.

Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele explained that the reforms grant high exemption thresholds for small companies, exempting those with turnover not exceeding N100 million and fixed assets below N250 million from tax. 

“For larger companies, the corporate tax rate will fall from 30 per cent to 25 per cent, subject to presidential approval on the advice of the National Economic Council.

 “Additional measures include top-up tax exemption thresholds of N50 billion for local firms and €750 million for multinationals, plus a 5 per cent annual tax credit for investments in eligible priority sectors. Businesses conducting foreign currency transactions now also have the option to pay taxes in Naira at the prevailing official exchange rate.

 “For individuals, the reforms introduce a tax exemption for low-income earners, making those with annual taxable income of N800,000 or less after reliefs and allowances fully exempt from personal income tax,” he clarified.

While some critics warned that the reforms may worsen the financial burden on Nigerians, Finance Minister Wale Edun insists they will improve household spending power.

“This will put more money, more purchasing power in the hands of those at the lower end of the scale,” he said. “That is good for business as well, because people need purchasing power to buy goods”, he affirmed. 

 Above all, a tax advisory firm BakerTilly noted that the reforms impose stricter compliance duties on both businesses and tax professionals. 

 It explained that the changes, which introduce new thresholds, exemptions, and incentives, will require companies to adjust their operations ahead of implementation to remain compliant and benefit from available reliefs.

The advisory firm detailed preparatory measures for companies ahead of the law’s implementation in 2026, outlined below:

 Know your tax exposure

 Start by evaluating how the reforms affect your personal or business finances. Look at your income level, sector, and existing tax obligations. This helps you spot any new exemptions you qualify for or new liabilities you may face.

 Refresh your tax plan

With the new Development Levy, changes to Capital Gains Tax, and minimum tax rules, old strategies may no longer work. Review your financial structure, profit models, and investments to ensure they fit into the new tax environment.

 Go digital with compliance

Technology is now at the heart of tax compliance. Make sure your accounting or financial systems can handle e-invoicing, real-time VAT reporting, and electronic recordkeeping in line with the new Nigeria Revenue Service requirements.

 Build knowledge within your team

Whether it’s payroll, finance, HR, or compliance, your staff must fully grasp the new regulations—especially around VAT, income tax bands, and deadlines. Invest in training or seek expert guidance to close any gaps.

 Monitor tax risks closely

Set up a system to track potential tax risks such as capital gains, VAT errors, employment taxes, or transfer pricing. Keeping a “tax risk register” can help you anticipate issues and make informed financial decisions.

 Keep stakeholders informed

The reforms may affect employees (through payroll changes), customers (via invoicing rules), or investors due to new tax rates. Communicate clearly with everyone involved to avoid confusion and ensure smooth adjustments.

Don’t hesitate to seek expert help

The new tax landscape is complex, and missteps can be costly. Consult tax professionals or legal experts to interpret sector-specific rules, maximise available reliefs, and stay fully compliant from the start.