Introduction

Recent tax reforms in Nigeria have ushered in significant changes—some long overdue. For businesses and individuals alike, understanding and adapting is no longer optional. At Median, we’ve helped clients interpret the Nigeria Tax Act 2025, Nigeria Tax Administration Act, and related legislation.

If you’re preparing for January 2026 (when many changes take effect), here’s what every decision maker must know.

 

Key Changes in the New Tax Laws

• Nigeria Tax Act, 2025 establishes new rules including a minimum effective tax rate (ETR) for certain large companies and parent companies of multinational groups. EY+2Integra International+2
  
  
• Introduction of controlled foreign company (CFC) rules, taxing undistributed profits of foreign entities controlled by Nigerian resident companies. EY+1
  
  
• Broadening of tax base: more income types, capital gains (especially for companies), and stricter compliance and disclosure. Tundeadisa+3Baker Tilly Nigeria+3Aluko Oyebode+3
  
  
• Repeal or consolidation of legacy statutes to simplify the tax code. PwC+2NESG+2
  
  
• Changes in Personal Income Tax (PIT) bands, exemptions for low income levels, more progressive rates at higher bands. Baker Tilly Nigeria+1

Expert Insights & Practical Advice

1. Engage with Advisors Early
   Because some parts of the law (gazetting, implementation details, administrative processes) are still being clarified, securing proactive advisory and governance help (like what Median offers) ensures you’re well positioned when enforcement begins.
   
   
2. Early Compliance Planning
   Large companies should model their effective tax rate under new rules to understand whether they’ll be exposed to top-up taxes or penalties. Median can help simulate tax burdens under both old and new regimes.
   
   
3. Revisit Corporate Structures & Holding Companies
   Those who own foreign subsidiaries or affiliates must assess whether the CFC rules will alter profit repatriation strategies, and whether transfer pricing, profit distribution, or operational structure should change.
   
   
4. Optimize Deductions & Incentives
   Certain incentives or reliefs may still exist under the new reforms (e.g. for priority industries). Act early to qualify or carry forward benefits before deadlines. Baker Tilly Nigeria+1
   
   
5. Strengthen Documentation & Transparency
   With stricter disclosure requirements, audit trails, and automatic exchange obligations, having clean records becomes not just best-practice but essential. At Median we see that many companies under-estimate the risk of penalties due to documentation gaps.
   
   
6. Personal Tax Strategies for Individuals
   For senior executives, freelancers, and entrepreneurs: rethinking income mix (salary vs dividends), exploring pension or annuity deductions, and staying alert to tax on global income if you have assets or income abroad.
   
   For example, a multinational affiliate with profits parked offshore might under the old system delay distribution; under the new CFC rules, that delay could lead to unexpected tax liabilities. A local SME with rapidly growing profits may find themselves in a higher PIT band or subject to ETR top-ups earlier than anticipated.
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Conclusion

Nigeria’s 2025 tax reforms are ambitious: they seek fairness, broader participation, and modern administration. For many, this offers opportunity—but also risk if ignored.

Whether you’re an individual, a local business, or multinational operating in Nigeria: aligning now with the new regimes through strategic governance, proper advisory, and strong financial structuring is key. Median is here to guide that journey.

“The biggest mistake I see is treating tax reform as a year-end event. It’s much more reliable to design your business budgeting, cash flow, and capital expenditure with the new laws in mind NOW.”

– Key Insight