Nigeria’s new tax is a major reform aimed at modernizing the country’s tax system. It seeks to make taxation fairer, simpler, and more transparent while increasing government revenue to fund essential services such as roads, education, healthcare, and security.
The law ensures that both individuals and businesses contribute according to their income or capacity, reducing the confusion and overlap of previous tax regulations.
The law works by revising personal and corporate tax rules and expanding the tax base. Individuals earning up to ₦800,000 annually are exempt from income tax, while higher earners are taxed progressively.
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For businesses, small companies below defined turnover thresholds are largely exempt, while larger firms pay restructured corporate taxes, including a 4 percent development levy.
The law also brings informal and digital businesses into the system and requires digital filing to improve transparency and compliance.
VAT remains at 7.5 percent, with essentials like food, healthcare, and education zero-rated.
The effects are already visible, citizens and businesses are adjusting to clearer filing requirements and better documentation.
While some may face short-term income or cost changes, the benefits are substantial. The law broadens revenue, promotes fairness, encourages formalization, and lays a foundation for sustainable economic growth and stronger national development.