What is the 2026 tax law change?

From 1 January 2026 Nigeria will operate under the Nigeria Tax Act, 2025 (Section 203). The Act unifies company, individual, VAT, withholding, and stamp duty rules in one document.

TL;DR , What changed?

Top six changes at a glance

New consolidated Act starts 1 Jan 2026.
Corporate tax bands updated; small companies under ₦25 million stay at 0%, medium-sized firms pay 20%, large firms 30% (Section 56 & Fourth Schedule).
Personal Income Tax bands tweaked; the tax-free Minimum Wage stays untouched (Section 58).
VAT framework rewritten; rate still 7.5% but clearer digital rules and a 14-day remittance deadline (Sections 148 & 154).
Non-resident digital suppliers must register, charge, and remit VAT (Section 151).
Time-of-supply rules clarified, affecting instalment sales (Section 147).

Who must read this?
Salaried staff, freelancers, MSMEs, accountants, state tax officials, and any business selling online.

Why the reform matters

The government says the unified Act will lift revenue, simplify filings, and pull more informal traders into the tax net. Federal taxes (company income, VAT) and state taxes (PAYE, stamp duty collection) now follow one master document, so overlapping rules should fade.

If you’re interested in the broader context and the four major new laws shaping the system, check our Comprehensive Guide to Nigerian Tax Laws 2025.

Key changes explained, simple breakdown by tax type

Corporate Tax (CT)

Rates: 0%, 20%, 30% still apply, but the Act introduces an “effective tax rate” test to curb avoidance. A group with ₦20 billion+ turnover must keep its global effective rate above 15 % or face a top-up (Section 57).

Personal Income Tax (PIT / PAYE)

Bands: New upper band kicks in at ₦50 million annual income at 25%. See Fourth Schedule for the full table.
Reliefs: Pension (up to 8 %), NHF, and life insurance relief stay.
Quickly check your annual PAYE obligations with our PAYE Calculator.

Value Added Tax (VAT)

Rate: 7.5 % keeps steady (Section 148).
Remittance deadline: Pay VAT on or before the 14th of the next month (Section 156).
Digital services: Netflix-style platforms must register even if abroad (Section 151).
Exemptions: Petroleum products and CNG may stay zero-rated until the Minister activates collection (Eleventh Schedule).

Withholding Tax (WHT)

Rates mostly hold, but the Act allows crediting WHT against other taxes within 24 months. Contractors should keep clean certificates.

Digital services / e-commerce tax

Beyond VAT, foreign e-commerce firms with a “significant economic presence” in Nigeria must pay 6% of turnover if not already taxed via a permanent establishment test (Section 12 & 17 snapshots).

Stamp duty, excise, new levies

Stamp duty now sits inside the same Act (Part I, Section 124). Instrument duty rates sit in the Eighth Schedule, cheques cost ₦50 while guarantees cost ₦500.

Quick three-line comparison table

Tax item	Before 2026	From 2026
VAT filing deadline	21st of following month	14th of following month
Digital VAT obligation	Nil / unclear	Mandatory registration for non-residents
Corporate top-up tax	Not applicable	15 % minimum global effective rate

Who pays more (or less)? Real examples in NGN

Salaried worker (Lagos, ₦400,000/month).
• 2025 tax: ₦55,467 PAYE.
• 2026 tax: ₦55,500 after new lower middle-band rate. Savings: ₦967 monthly.
Hair-salon owner (annual turnover ₦12 million).
• Falls under small-company band, corporate tax 0%.
• VAT collected: ₦900,000; remit by 14 Feb monthly or face ₦50,000 penalty first offense.
E-commerce SME (turnover ₦60 million).
• Corporate tax at 20%.
• Must charge VAT on sales and issue e-invoices (Section 153).
• WHT on services it receives can offset income tax in 2026 return.

Need tailored help? Find a Nigerian tax professional to optimize your approach.

Immediate actions you should take (checklist)

Register or confirm your TIN , use the Joint Tax Board portal: https://tinverification.jtb.gov.ng.
Update payroll/invoicing systems to the new rates and 14-day VAT clock.
Mark these dates:
14 Jan 2026 - first VAT remittance under the new Act.
30 June 2026 - deadline for 2025 company returns (old rules still apply).
Claim reliefs, pensions, NHF, life insurance.
Keep digital and paper receipts for at least six years.

Practical compliance tips for SMEs and freelancers

Record every sale, even cash, with numbered receipts.
Use a simple spreadsheet or free accounting app; avoid lump-sum book entries.
Hire an accountant once turnover passes ₦30 million or payroll exceeds three staff.
Double-check WHT certificates; missing ones delay refunds.

For more practical advice and regular updates, visit our Nigerian Tax Insights Blog.

Tax planning (legal) strategies to consider for 2026

Cash-flow can tighten when VAT must leave your bank seven days earlier. Negotiate 30-day customer payment terms or offer small discounts for earlier settlement. Explore pioneer incentives if you start manufacturing renewable energy equipment; Section 186 lists qualifying items.

Penalties, disputes & appeals, what to expect

Late VAT attracts ₦50,000 first month + ₦25,000 for each extra month, plus interest. Wrong returns can trigger 10% of tax due, criminal charges if deliberate. Dispute an assessment within 30 days at the Tax Appeal Tribunal before heading to court.

Resources, official links and tools

FIRS filing portal: https://taxpromax.firs.gov.ng.
Check your TIN: https://tinverification.jtb.gov.ng.
Nigeria Tax Act PDF.
Browse all 2025 Nigerian tax laws.
See past and latest changes on our Nigerian Tax Insights Blog.
Finance news coverage: Punch newspaper recap of the Act.
Legal commentary: Templars Law Firm client alert on the 2025 Act.

FAQs

Do I need to re-register my business because of the new law?
No. Keep your CAC registration and TIN; just apply the new filing rules.

Has the VAT rate increased?
No, it stays 7.5 % (Section 148).

Will this raise my PAYE?
Most middle-income earners see a slight drop as the threshold shifts upward.

How do I check my TIN online?
Visit https://tinverification.jtb.gov.ng, enter RC or personal details, and click verify.

Are there new exemptions for small businesses?
Yes. Firms under ₦25 million turnover remain tax-free on company income.

When do the rules start?
1 January 2026 (Section 203).