Export tax break? Gone. Confusion? Sky-high. On 1 January, the Final Nigeria Tax Act kicked in, erasing several perks that had circulated for months in an earlier draft. Chief among them: the broad income-tax exemption for export profits. That carve-out is history, Proshare reports.
The big picture: Abuja wants exporters to rely on zero-rated VAT instead of a full income-tax holiday. Profits from export sales will now face normal company tax, though dividends paid by wholly export-oriented firms keep their withholding-tax waiver. This tilt matters for every cocoa trader, software outsourcer and creative studio that built models on the old promise of tax-free gains.
Other flashpoints:
* Small company threshold. The turnover cap for zero company tax inches up, widening the no-tax band and pushing more mid-sizers into the 20 % bracket.
* Minimum effective tax. A new floor applies when reliefs drive the headline rate below 5 %. If incentives slash your bill too deep, the floor snaps back like a seatbelt.
Why it matters: "The new law is really about clarity, fairness and sustainability," Ayo Salami of KPMG told Guardian. Yet clarity is in short supply. An op-ed has already flagged 31 grey areas that could trigger disputes, per Proshare.
Government stance: Officials insist the kinks are cosmetic. The Finance Ministry dismissed KPMG’s worries as "misreadings" in Tell, and the Presidential Fiscal Policy & Tax Reforms Committee echoed that pushback in The Nation. The message: implementation fixes, not fresh legislation, will close the gaps.
Around the Tax World
• Call for plain English. Economists at a Lagos lecture urged sustained public education so small firms can grasp the reforms, NAN/Tribune writes.
• Faith meets finance. At a NASFAT summit, speakers linked good tax practice to nation-building, saying the new rules end "tax on the same income twice," per Guardian.
• Bankers break it down. Union Bank told customers anyone earning under ₦800k a year now pays zero personal income or capital-gains tax,welcome news in inflationary times.
• NECA backs the law. Employers want FIRS to co-create guidance and kill illegal local levies, The Sun reports.
• Digital helpers. Heirs Technologies won NRS accreditation to roll out the e-Invoicing regime that underpins the reforms.
By the Numbers
Prime Number: 31, the count of loopholes and clashes spotted in the new Acts, according to Proshare’s deep-dive.