From Victor Osula, Abuja
Nigeria is overhauling its tax system to make it simpler, more transparent, and investor-friendly, a move aimed at attracting investment while protecting businesses from outdated and fragmented tax rules, the Presidency said on Monday.
Contrary to concerns that the new tax regime could scare away investors or trigger capital flight, Dr Tope Fasua, Special Adviser to President Bola Tinubu on Economic Affairs, said the new Tax Administration Act (NTAA), set to take effect in January 2026, promises to reduce compliance burdens, streamline levies, and align the country with global best practices. He explained that the 2025 reforms are pro-investment, pro-market, and modernise Nigeria’s fiscal framework.
A major highlight is the 4% Development Levy, which consolidates several previously fragmented levies, including the Tertiary Education Tax, NITDA Levy, NASENI Levy, and Police Trust Fund contributions. Small businesses with turnover below N100 million and non-resident companies are exempted, reducing compliance costs and improving predictability for investors.
The reforms also clarify Free Trade Zone (FTZ) incentives. Companies in FTZs can sell up to 25% of their output domestically while maintaining exemptions during a three-year transition period (2026–2028). This ensures FTZs continue to attract exporters and manufacturers without disadvantaging local firms.
Another key measure is the 15% minimum tax for large multinationals and domestic companies with turnover above N50 billion. This aligns Nigeria with the OECD/G20 global framework, protects the country’s tax base, and ensures fairness between domestic and international firms.
The NTAA also modernises capital gains taxation, now called “chargeable gains.” Gains reinvested in Nigerian companies within the same year are exempt from tax, encouraging portfolio rotation and capital formation. Losses can now reduce taxable income, cushioning investors against risk.
“These reforms simplify taxes, safeguard incentives, align with global standards, and protect both ordinary Nigerians and investors. Nigeria is building a predictable, stable, and investment-friendly environment”, Fasua emphasised, reassuring investors that the country is open for business.
