What You Should Know About Newly Signed Nigeria Tax Reform Laws

If you’re an SME owner, a startup founder, or a salaried employee, you need to understand what these changes mean for your bottom line and why timely planning is essential.

 

This guide walks you through the most important changes, what they mean for you, and how to position your business or career to benefit.

 

What You Should Know About Newly Signed Nigeria Tax Reform Laws

 

1. Companies Income Tax (CIT) Threshold Doubles to ₦50 Million

What changed?

Small companies with annual revenue up to ₦50 million are now entirely exempt from CIT—up from ₦25 million previously.

Why it matters

• Eliminates tax on early-stage SMEs, enabling reinvestment in growth or infrastructure
• Offers financial breathing room for startups and scaling businesses

Action steps

• Confirm your turnover stays within the threshold
• Keep valid bookkeeping records to substantiate claims

 

2. PAYE Relief: Lower Brackets, Higher Take‑Home Pay

What changed?

• Individuals earning up to ₦1 million/year (₦83k/month) now pay no PAYE
• PAYE bands up to ₦1.7 million/year have reduced tax rates

Why it matters

• More disposable income for the majority of Nigerian workers
• Lower social strain and higher consumer spending

Action steps

• Update your payroll systems
• Inform your staff that they may be eligible for refunds

 

3. FIRS Becomes Nigeria Revenue Service (NRS)

What changed?

The Federal Inland Revenue Service (FIRS) has been replaced with the Nigeria Revenue Service (NRS)

Why it matters

• Single agency now handles tax and non‑tax revenue
• Expected to be autonomous, performance‑driven and digitally enabled
• Mandated to coordinate revenue collection across all three tiers of government

Action steps

• Watch for new digital platforms and remittance channels
• Monitor how the new agency handles assessments and audits

 

4. Unified Tax Laws under the “Ease of Doing Business” Act

What changed?

The Nigeria Tax (Ease of Doing Business) Act consolidates multiple tax laws into a unified statute

Why it matters

• Removes duplicate or overlapping taxes
• Reduces compliance headaches and unexpected levies
• More predictable and investor‑friendly tax environment

Action steps

• Review your tax categories and structure
• Seek clarity on changes in levy and compliance schedules

 

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5. Digital Economy: Brought into the Tax Net

What changed?

• 5% excise duty on digital transaction fees
• 10% tax on services from virtual asset providers
• Non‑resident digital firms now taxable in Nigeria

Why it matters

• This closes a major loophole in the digital and crypto economy
• Online businesses operating in Nigeria now taxed fairly

Action steps

• Review your business model—are you liable?
• Plan accordingly for compliance and pricing adjustments

 

6. New Tax Ombudsman & Appeal Tribunal

What changed?

• A Tax Appeal Tribunal and Tax Ombudsman are now in place

Why it matters

• Offers a faster, fairer way to resolve tax disputes
• Reduces the need for costly and lengthy court battles

Action steps

• Document disputes promptly
• Use these new channels for compliance or refunds

 

What This Means for You

Affected Group	Benefit	Required Action
SMEs (₦0–₦50m)	CIT exemption, better cashflow	Submit all tax returns regardless
Employees (<₦1m/year)	PAYE exemption	Adjust payroll, inform staff
Digital Businesses	Clarity on tax obligations	Reassess price, compliance
All Taxpayers	Better grievance redressal	Preserve documentation, file appeals

Don’t Leave Money on the Table

With the newly signed tax reform laws, Nigerian businesses now have access to real reliefs, but only if you know how to apply them.

 

At FSC Professional Services, we’ve helped businesses over the years to navigate tax policies, restructure operations, and unlock incentives they didn’t even know they qualified for.

 

These reforms represent a new era of taxation: fairer, more inclusive, and digitally driven. But to benefit from them, action is key.

 

Here’s how we help you make the most of it:

• Re-classify your business and apply the correct tax thresholds
• Update your payroll and accounting systems for new exemptions and rates
• Review your obligations across CIT, PAYE, VAT, and digital taxes
• Manage documentation for disputes and ensure you’re audit-ready
• Get proactive advisory from experts who understand the law in practice

The reforms won’t apply themselves, we’ll help you position your business to save more and stay compliant.

Chat Us to get started today.