Reporting by BusinessDay indicates that the Federal Government has officially commenced the implementation of the Nigeria Tax Act 2025, which fully exempts small businesses with an annual turnover of less than ₦50 million from Company Income Tax (CIT). This move is part of a broader fiscal overhaul aimed at consolidating over 60 disparate taxes into fewer than 10 statutes to simplify the business environment.
The new law also introduces immediate relief for Nigerian workers by increasing tax exemptions on redundancy compensation from ₦10 million to ₦50 million. Additionally, the Federal Inland Revenue Service (FIRS) has officially transitioned into the Nigeria Revenue Service (NRS), a body now empowered to use National Identification Numbers (NIN) as mandatory Tax IDs for all financial transactions.
Validation of these reforms was provided by Moniepoint, which noted that “tax is now calculated on profit, not total inflow,” and by the Nigeria Alignment and Tax Law Forum (NALTF), which stated, “the 2026 reforms introduce immediate relief for the majority of Nigerian workers through significant exemptions.”
Echotitbits take: This is a “carrot and stick” approach. While the tax holidays for small businesses and agribusinesses are a massive “carrot,” the mandatory integration of NIN with the Nigeria Revenue Service is a powerful “stick” for bringing the informal sector into the tax net. Watch for how quickly the NRS can synchronize data with banks to prevent double taxation.
Source: AfricanBusiness – https://african.business/2026/03/african-banker/new-tax-regime-will-relieve-burden-for-small-companies, April 2, 2026
Photo credit: AfricanBusiness
