Four tax laws changed on the same day in 2026. The Nigeria Tax Act is the one that decides what gets taxed and how much.
What the Act does
The Nigeria Tax Act 2025 is Act No. 7 of 2025, administered by the Nigeria Revenue Service (NRS), formerly FIRS. It consolidates the charging rules that used to sit in several separate laws into one document covering income tax, VAT, capital gains and stamp duties.
Consolidation is the operative word. Most of the underlying taxes are not new. What changed is that one Act now states the rates and the rules for all of them together.
When it took effect
President Tinubu assented to the Act on 26 Jun 2025, alongside the three other tax reform Acts passed the same day. The Nigeria Tax Act itself commenced on 1 Jan 2026, so the gap between signing and taking effect gave businesses roughly six months to prepare.
The six laws it replaced
The Companies Income Tax Act, Personal Income Tax Act, Petroleum Profits Tax Act, VAT Act, Capital Gains Tax Act and Stamp Duties Act were all repealed and folded into this one Act. If you used to look up a rate in one of those older laws by name, that provision now sits inside the Nigeria Tax Act instead.
This is more than a filing exercise. A single consolidated Act reduces the chance of two old laws quietly contradicting each other, a real problem the previous patchwork occasionally had.
Company income tax and the development levy
The headline company income tax rate stayed at 30%. The Act allows the President to cut it by order, on the National Economic Council's advice, but no such order was in force at the time of writing, so 30% remains the number to use.
Alongside that, the Act introduced a 4% development levy, charged on assessable profits (before capital allowances and losses) and paid by all Nigerian companies except small companies. It replaced the tertiary education tax, NITDA levy, NASENI levy and Police Trust Fund levy, rolling several old charges into one.
For a business used to tracking four separate levies, this is a genuine simplification, even where the combined bill ends up similar.
Small companies and what changed for them
A company that meets the Act's small-company definition is exempt from companies income tax, capital gains tax and the development levy. That is a meaningful change from the old rules, which drew the line at a lower turnover figure.
The catch is that the turnover threshold itself is disputed between two versions of the Act's text, a genuine unresolved question rather than a simple typo. Our dedicated look at the small-company exemption names both figures and where each comes from.
Why one Act instead of six
Consolidating six laws into one is not just tidier filing. It reduces the number of places a rate or a definition could be quietly out of date, since a single Act with one commencement date replaces documents that had been amended separately, at different times, over many years.
Common mistakes
- Quoting an old law by name. The Companies Income Tax Act and the others it replaced are no longer the current reference; the Nigeria Tax Act is.
- Assuming the CIT rate dropped to 25%. That lower rate needs a presidential order that has not been made. Until then, 30% applies.
- Missing the development levy. It applies alongside company income tax, not instead of it, for any company that is not exempt as a small company.
For how returns and penalties under this Act are actually administered, see the Nigeria Tax Administration Act explained. For the wider changeover, read our full account of the tax authority's rename and browse the NRS and Rev360 hub.