Summary of Nigeria Tax Act, 2025

1. The objective of this Act is to provide a unified fiscal legislation governing taxation in Nigeria. 2. This Act applies throughout Nigeria to any person required to comply with any provision of the tax laws whether personally or on behalf of another person.

PART I – Imposition of Tax on Income, Profits or Gains 3. Income tax shall be determined in accordance with the provisions of this Act, and imposed on the – (a) profits or gains of any company or enterprise; (b) income of any individual or family; and (c) income arising, accruing or due to a trustee, or an estate. 4.—(1) Income, profits or gains of a person accruing in or derived from Nigeria, including — (a) profits or gains from any trade, business, profession or vocation for whatever period of time such trade or business may have been carried on; (b) royalties, fees, rents or interests arising from a right granted for the use, exploitation or occupation of any property; (c) dividends, premium, charges or annuities; (d) fees, dues, allowances, or any remuneration for services rendered; (e) discounts or rebates; (f) disposal of money or money instruments; (g) income, profits or gains from disposal or lending of securities; (h) prizes, winnings, honoraria, grants, awards, laurels, etc.; (i) profits or gains from the disposal of property or fixed assets; (j) profits or gains from transactions in digital assets; (k) any other income, profit or gain not falling within the preceding categories. (2) Income, profits or gains of an individual, including — (a) salaries, wages, fees, allowances, compensations, bonuses, premiums, benefits or other perquisites allowed, given or granted by any person to any employee other than payment for expenses incurred in the performance of the duties of the employment, and from which it is not intended that the employee should make any profit or gain; and (b) any pension, annuity or any other similar income. ... PART IX – Rates of Tax 56. Tax shall be levied, for each year of assessment in respect of total profits of every company, in the case of — (a) a small company, at 0%; and (b) any other company, at the rate of 30% from the commencement of this Act. Provided that the rate under shall be reduced to 25% effective from a date as may be determined in an order issued by the President on the advice of the National Economic Council 57.—(1) The following shall apply for the purpose of determination the effective tax rate under this section: (a) notwithstanding any provision of this Act or any other enactment, where, in any year of assessment, the effective tax rate that is, covered taxes as a percentage of net income, of a company is less than 15%, such company shall recompute and pay an additional tax that makes its effective tax rate equal to 15%; (b) cover taxes for the purpose of this section means companies income tax, petroleum profit tax, and hydrocarbon tax paid or payable, development levy, and priority sector tax credit; and (c) net income refers to the profit before tax as reported in the audited financial statements excluding franked investment income and unrealistic gains or losses: Provided that the net income for a life insurance company shall not include gross income and investment income for policyholders. 58. The income tax payable on the chargeable income of an individual, other than an individual earning the Minimum Wage in line with the Minimum Wage Act, in respect of each year of assessment, shall be as specified in the Fourth Schedule to this Act.

PART I – Hydrocarbon Tax, Ascertainment of Chargeable Tax, Ascertainment of Chargeable Profits and Consolidation for Tax Purposes 65.—(1) This Part shall apply to companies engaged in upstream petroleum operations in the onshore, shallow water and deep offshore with licences and leases under the Petroleum Industry Act. 66. Subject to the provisions of section 65(2) of this Act, there is levied upon the profits of any company engaged in upstream petroleum operations in relation to crude oil, a tax to be known as hydrocarbon tax, which shall be charged and assessed upon its profits related to the operations for each accounting period and payable in accordance with this Part. ... 72. The chargeable hydrocarbon tax for any accounting period of a company shall be a percentage of the aggregated chargeable profit for that period and it shall be — (a) 30% of the profit from crude oil for petroleum mining leases selected under section 93(6)(b) and(7)(b) of the Petroleum Industry Act with respect to onshore and shallow water areas; and (b) 15% of profit from crude oil for onshore and shallow water and for petroleum prospecting licences selected under section 93(6)(a) and(7)(a) of Petroleum Industry Act. ... PART II – Petroleum Profits Tax Imposition of Tax And Ascertainment of Chargeable profits, Ascertainment of Assessable Tax and of Chargeable Tax 89.—(1) This Part shall apply to oil prospecting licences and oil mining leases that are yet to convert under the provisions of the Petroleum Industry Act. 98.—(1) The assessable tax for an accounting period of a company shall be an amount equal to 85% of its chargeable profits of that period. (2) Where a company has not commenced a sale or bulk disposal of chargeable oil under a programme of continuous production, its assessable tax for an accounting period during which it has not fully amortised all its pre-production capitalised expenditure, shall be 65.75% of the chargeable profits for that period...

119. Where, in any year of assessment, any part of the income or profit of a resident of Nigeria, derived from outside Nigeria, has been charged to tax in the source country, and that income or profit is also chargeable to tax in Nigeria, the tax paid outside Nigeria may be allowed as a credit against the tax payable in Nigeria. 120. Where the Government of the Federal Republic of Nigeria enters into an agreement with a treaty partner for the purpose of providing relief from double taxation in relation to tax imposed under this Act, the agreement shall have effect upon ratification or domestication by the National Assembly. 121. The foreign tax paid to a treaty partner in accordance with the agreement, and in respect of income or profits chargeable to income tax in Nigeria may be allowed as a credit against tax payable under this Act. 122. For purpose of Chapter Four of this Act — "foreign tax" means any tax paid to a treaty partner and covered by an agreement with the treaty partner; "foreign profit" means a profit liable to tax under this Act and to a treaty partner; "foreign income" means an income liable to tax under this Act and to a treaty partner; "Nigerian tax" means income tax chargeable under this Act; "total income" means the income or profits of a Nigerian resident including the foreign income; and "treaty partner'' means a country with which Nigeria has an agreement for the relief of double taxation.

123. There is imposed duties on instruments at the rates specified in the Ninth Schedule to this Act, subject to the exemptions contained in Part III of Chapter Eight of this Act, being any instrument which is — (a) first executed in Nigeria; or (b) executed outside Nigeria, and relates to any property situated or to any matter or thing done in Nigeria. 124. Duties payable on any instrument under this Part shall be paid and denoted by any of the following means — (a) tax stamps; (b) a die; (c) electronic or digital tagging; (d) electronic receipt; (e) issuance of certificate; or (f) any other means as may be determined by the relevant tax authority. 125. Every instrument executed in Nigeria, chargeable with a duty as prescribed under Chapter Five of this Act, shall be stamped not later than 30 days after its execution by the person required to pay the appropriate duty. 126. Any unstamped dutiable instrument shall not be admissible in evidence in any court, judicial or arbitration proceedings, and in satisfying any evidentiary requirements unless otherwise stated by this Act.

143. Value Added Tax (VAT) is imposed in accordance with the provisions of chapter six of this Act. 144. Subject to the exemptions in Part IV of Chapter Eight of this Act, VAT shall be paid on all taxable supplies in Nigeria. 145. A taxable supply shall be deemed to take place in Nigeria where, in respect of — (a) goods — (i) the goods are physically present, imported into, assembled or installed in Nigeria at the time of supply; or (ii) the beneficial owner of the rights in or over the goods is a taxable person in Nigeria and the goods or right is situated, registered or exercisable in Nigeria; (b) a service — (i) the service is provided to and consumed by a person in Nigeria, regardless of whether the service is rendered within or outside Nigeria or whether or not the legal or contractual obligation to render such service rests on a person within or outside Nigeria, or (ii) the service is connected with existing immovable property, including the services of agents, experts, engineers, architects, valuers, etc., where the property is located in Nigeria; and (c) an incorporeal — (i) the exploitation of the right is made by a person in Nigeria or whose place of usual residence is Nigeria, (ii) the right is registered in Nigeria, assigned to or acquired by, a person in Nigeria, regardless of whether the payment for its exploitation is made within or outside Nigeria, or (iii) the incorporeal is connected with a tangible or immovable asset located in Nigeria. 146. For the purposes of Chapter Six of this Act, a taxable supply shall be deemed to take place at the time an invoice or receipt is issued by the supplier, or where goods are delivered or made available for use, or payment is due to or received by the supplier in respect of that supply, whichever occurs first. 147. Subject to the provisions of Part IX of this Chapter, VAT shall be charged on the value of all taxable supplies at the rate of 7.5%. 148. For the purposes of Chapter Six of this Act, the value of taxable supplies shall be determined as follows, where the supply is — (a) for a money consideration, its value shall be the amount which with the addition of the VAT chargeable is equal to the consideration; and (b) not for a money consideration, the value of the supply shall be its market value. 149. The value of imported taxable supply for the purposes of Chapter Six of this Act shall be the amount which is equal to the price of the taxable supply imported plus — (a) taxes, duties and other charges levied either outside or by reason of importation into Nigeria, other than VAT imposed under this Act; and (b) costs by way of commission, parking, transport and insurance up to the port or point of entry. 150. A non-resident person who makes taxable supplies to Nigeria shall register for tax and include VAT on its invoice for all taxable supplies. 151. A taxable person shall pay VAT to a supplier on the taxable supply made to the person. 152. A taxable person who makes a taxable supply shall maintain a sequential invoice numbering, and shall in respect of a supply, furnish the purchaser with a VAT invoice containing, the following — (a) supplier's tax ID; (b) name and address of the supplier and sequential invoice number; (c) supplier's incorporation or business registration number as applicable; (d) the date of supply; (e) name of purchaser or client; (f) gross amount of transaction; and (g) VAT charged and the rate. 153. A taxable person shall, on making taxable supplies under Chapter Six of this Act, collect VAT at the rate specified in section 146 of this Act. 154. Without prejudice to any provision of this Act or any other tax law, the following persons shall collect or withhold VAT on taxable supplies made to them and remit it to the Service within the time prescribed by this Act, the Nigeria Tax Administration Act, or any regulation made pursuant thereto — (a) Federal, State, Local Government and their respective Ministries, Departments or Agencies; or (b) any other person appointed by the Service to collect or withhold VAT for the purposes of this Part. 155. A taxable person shall, not later than the due date for rendering the relevant tax return prescribed by the Nigeria Tax Administration Act, where the — (a) output VAT exceeds the input VAT, remit the excess to the Service; or (b) input VAT exceeds the output VAT, be entitled to utilise the excess tax as a credit against subsequent months. 156. The provisions of section 191 of this Act shall apply in respect of sale or transfer of trade, business, profession or vocation carried on in Nigeria. 157. A taxable person making a taxable supply shall implement the fiscalisation system deployed by the Service in accordance with Nigeria Tax Administration Act.

158. A surcharge is imposed at 5% on chargeable fossil fuel products provided or produced in Nigeria, and shall be collected at the time a chargeable transaction occurs. 159. For the purpose of imposing surcharge on fossil fuel product, the chargeable transaction shall be the supply, sale or payment whichever occurs first. 160. The Minister may by an order issued in the Official Gazette indicate the effective date of commencement of the administration of the surcharge on fossil fuel products under this Chapter. 161. The surcharge under this Chapter shall not apply to the following fossil fuel products — (a) clean or renewable energy products; (b) household kerosene; (c) cooking gas; and (d) compressed natural gas(CNG).

162. There is exempt from tax under chapter two of this Act — (a) the profits accruing to, or gains from disposal of assets of any person being — (i) a statutory or registered friendly society, where the profits or gains are not derived from a trade or business carried on by such society, (ii) a co-operative society registered under any enactment or law relating to co-operative societies, not being profits or gains from any trade or business carried on by that society, (iii) engaged in educational, religious or charitable activities of a public character where the profits or gains are not derived from a trade or business carried on by such person, (iv) a trade union registered under the Trade Unions Act where the profits or gains are not derived from a trade or business carried on by such trade union, (v) a Federal, State or Local Government in Nigeria, their Ministries, Departments and Agencies and other public institutions, other than profits or gains derived from trade or business or any instrumentality established for the purpose of trade or business, and (vi) a government purchasing authority established by an enactment and empowered to acquire any commodity for export or redistribution; (b) dividend distributed by authorised collective investment scheme; (c) dividend or rental income received by a real estate investment company on behalf of its shareholders, where not less than 75% of the dividend or rental income is distributed within 12 months after the end of the financial year in which the dividend or rental income was earned, provided that nothing in this subsection shall be construed to exempt a — (i) shareholder from tax on the dividend or rental income received from a real estate investment company, (ii) real estate investment company from tax on management fee, profits or any other income earned for and on its own account, and (iii) real estate investment company from tax on dividend or rental income if it does not meet the conditions stipulated in this paragraph; ... [truncated for brevity in summary only – full text below] 165. The sectors listed in the Tenth Schedule to this Act are classified as priority sectors for the purposes of economic development tax incentives. 176. The economic development tax credit at the rate of 5% per annum for a period of 5 years shall apply to each eligible Qualifying Capital Expenditure acquired within 5 years effective from the production date. 182. Any company granted economic development tax credit, shall not benefit from a similar tax incentive under this Act or any other law.

189. The following rules shall apply in the event of restructuring of trades or businesses — (a) in the case of a merger of two or more trades or businesses — (i) a new trade or business shall not be deemed to have commenced as a result of the merger, and the provisions of this Act as they relate to cessation of trade or business shall not apply to the trade or business that ceased as a result of the merger, (ii) the provisions of Part VIII of Chapter Two of this Act as they relate to chargeable gains shall not apply to the assets transferred to the new or surviving trade or business as a result of the merger, (iii) assets of the merging trades or businesses shall be deemed to have been transferred at the residue of the qualifying capital expenditure on the day following the merger, (iv) the provisions of the First Schedule to this Act shall apply on the remaining useful life of the asset transferred because of the merger, (v) unutilised capital allowance on the assets transferred shall be available for the use of the new or surviving trade or business, (vi) unabsorbed losses of the merging entities shall be available to the surviving trade or business provided that such losses were incurred by the merged trade or business, and (vii) taxes deducted at source in respect of the merged trades or businesses shall be available to the merged trade or business; ... 190. Where a relevant tax authority is of the opinion that a disposition is not given effect to, or that a transaction which reduces or may reduce the amount of tax payable, is artificial or fictitious, it may disregard any such disposition or transaction... 191. A company involved in an arrangement with a related party shall — (a) ensure that the terms and conditions for which the arrangement is carried out is at arm's length; and (b) report the arrangement in the form and manner prescribed by the relevant tax authority. 195. From the commencement of this Act, the following enactments are repealed — (a) Capital Gains Tax Act, Cap. C1, LFN, 2004; (b) Casino Act, Cap. C3, LFN, 2004; (c) Companies Income Tax Act, Cap. C21, LFN, 2004; (d) Deep Offshore and Inland Basin Act, Cap. D3, LFN, 2004; (e) Industrial Development (Income Tax Relief) Act, Cap. I17, LFN, 2004; (f) Income Tax (Authorised Communications) Act, Cap. I4, LFN, 2004; (g) Personal Income Tax Act, Cap. P8, LFN, 2004; (h) Petroleum Profits Tax Act, Cap. P13, LFN, 2004; (i) Stamp Duties Act, Cap. S8, LFN, 2004; (j) Value Added Tax Act, Cap. V1, LFN, 2004; and (k) Venture Capital (Incentives) Act, Cap. V2, LFN, 2004. 200. Subject to the Constitution of the Federal Republic of Nigeria, this Act shall take precedence over any other law with regards to the imposition of tax...