For years, Nigeria has relied on oil revenue, while tax collection wasn't imposed due to the economy's size and cost. The president, Bola Ahmed Tinubu, had earlier signed the four main tax reform bills and has now, in effect, kicked off since January 1st, 2026.
It was read that the new tax regime is aimed at reforming the country’s revenue system to ease up the burden on low-income earners and modernising tax administration after the government identified several problems with the old system, including:
- Multiple overlapping tax laws
- Poor compliance and tax evasion
- Heavy pressure on a small number of taxpayers
- An informal economy largely outside the tax
This new tax regime represents one of the most significant changes to Nigeria’s tax framework in decades. It is important to note that the new tax regime follows the tax law that was effectively introduced on June 26, 2025, which includes the four main laws: the Nigeria Tax Act (NTA) 2025, the Nigeria Tax Administration Act (NTAA) 2025, the Nigeria Revenue Service Act (NRSA) 2025, and the Joint Revenue Board of Nigeria Act (JRBNA) 2025.
This article explains the grounds of the four major laws, what they entail, why they were introduced, and what they mean for individuals, businesses, and the wider economy.
The four main tax laws 2026
1. Nigeria Tax Act (NTA) 2025:
This act reduces the complexity of a number of taxes, such as capital gains tax, value added tax, corporation income tax, and personal income tax, into a single legal framework.
2. Nigeria Tax Administration Act (NTAA):
This aims to eliminate loopholes and boost efficiency by providing an established and digital set of regulations for tax administration across all levels of government.
3. Nigeria Revenue Service Act (NRSA) 2025:
It aims to improve accountability and transparency in response to tax collection. This Act creates the Nigeria Revenue Service, which would replace the Federal Inland Revenue Service.
4. The Joint Revenue Board Act (JRBA) 2025:
It's aimed at protecting the right of taxpayers, created at the Tax Ombud Office and also, it focuses on settling disputes through a Tax Appeal Tribunal.
Key Features:
Nigeria's new tax regime has a progressive system that exempts annual incomes of ₦800,000 or less. Higher earners will face tax rates ranging from 15% to 30%. It consolidates the earlier regulations, streamlines corporate taxation by 15%, and mandates a 30% minimum effective tax rate for large multinational corporations. This simply means that higher earners will pay tax according to their earnings.
1. Regime for Personal Income Tax (PIT):
A progressive tax structure exempts individuals earning ₦800,000 or less each year, allowing vulnerable households to better cope with rising living costs. This shift reflects the government’s claim that the reform prioritises social protection while still improving revenue collection. Some allowances and reliefs have been modified and replaced to simplify calculations, and this improves transparency.
Corporate taxation:
Profits and capital gains are taxed at a fixed rate. Qualifying multinational corporations must pay a minimum tax rate of 15%. This change equally introduces both reliefs and stricter rules for small businesses and larger ones.
Small businesses below a certain threshold enjoy broad tax exemptions, thereby reducing the compliance pressure.
Large companies and multinational corporations face tighter enforcement and minimum effective tax requirements.
Multiple existing levies have been consolidated to reduce duplication and confusion. The goal is to encourage small business growth while ensuring that large and profitable companies contribute their own fair share.
3. Digital Economy and Technology:
The reform covers a comprehensive part of the digital economy and market, including online services and digital transactions that previously escaped taxation. It also promotes the use of electronic tax filing, making it mandatory for businesses to file taxes online. It improves data sharing between tax authorities and stronger monitoring and enforcement.
4. Value Added Tax (VAT) Adjustments
As the VAT rate remains unchanged, exemptions were made for essential goods and services such as food, healthcare, education, and transportation. While this is included, its main aim is to protect consumers and businesses alike while maintaining government revenue.
Moniepoint informed their customers about the Electronic Money Transfer Levy (EMTL) directed by the tax authority. In the notification, it stated, "Dear customer, you will be charged a ₦50 on inflows of ₦10,000 and above. Moniepoint collects and remits this on behalf of the Federal Inland Revenue Service (FIRS)."
The new tax regime has unravelled mixed reactions and controversies. Supporters argue it modernises Nigeria’s tax system, protects low-income earners, and improves long-term economic stability, while others, on the other hand, say otherwise. They worry about implementation challenges, rising costs of compliance, and the impact on businesses during a period of economic hardship.
While all this is going on, some civil society groups have called for transparency and gradual implementation to avoid public resistance. However, success depends largely on effective administration, fairness, and the trust of the public at large.
Conclusion
Nigeria’s new tax regime marks a significant shift in the country’s economy. By offering relief to low-income earners, strict rules for large corporations, and embracing digital tools, the government hopes to build a more inclusive and efficient tax system. As the reforms take effect, for both individuals and businesses, as well as the public society, there's a need to understand their rights under the new system.
Whether or not the new tax regime achieves its goals will depend not just on the laws themselves, but on how well they are implemented and enforced, while reducing Nigeria’s dependence on oil income.