29/06/2025
TAX UPDATE: President Bola Ahmed Tinubu would be signing into law today the widely debated and controversial Nigeria Tax Reforms Bills.
Recall that the National Assembly previously rejected several harsh provisions of the initial proposal, amending them to reflect a more humane and inclusive approach.
Key Highlights of the Bill:
1. Tax exemption for workers earning ₦800,000 and below annually.
2. 25% personal income tax applies only to individuals earning above ₦50 million annually.
3. Small businesses owners are exempted from paying income tax.
4. Company income tax for medium and large companies will be reduced from 30% to 25% starting in 2026.
5. Value Added Tax (VAT) exemptions on essential goods and services consumed by the poor, including food items, medical services, pharmaceuticals, educational fees, and electricity.
6. The Nigeria Revenue Service (NRS) will now collect revenues previously handled by agencies such as the Nigeria Customs Service, NUPRC, NPA, and NIMASA.
7. VAT remains at 7.5%, and corporate income tax stays at 30%. NO INCREMENT!
8. Introduction of a Development Levy ranging from 4% to 2%, allocated to support the Student Education Loan Fund, TETFund, NITDA, and NASENI.
9. FIRS now renamed NRS
This reform marks a major shift in Nigeria’s fiscal structure, aiming to balance economic development with fairness and inclusivity.
