Frequently Asked Questions

The Nigeria Tax Act 2025 introduced six progressive bands: 0% on the first ₦800,000, then 15% up to ₦3 million, 18% up to ₦12 million, 21% up to ₦25 million, 23% up to ₦50 million, and 25% on everything above ₦50 million. These replace the older rates and take effect from January 2026.

Yes. The CRA (20% of gross income plus ₦200,000 or 1% of gross, whichever is higher) no longer applies. It has been replaced by a rent relief capped at ₦500,000 per year, alongside pension and NHF deductions. The first ₦800,000 of chargeable income is now fully exempt.

Employees may claim 20% of qualifying rent expenditure, subject to a maximum deduction of ₦500,000 per annum. You must provide evidence of rent payments — such as a tenancy agreement or bank receipts — to your employer or to the NRS when filing your annual return.

Under the NTA 2025, lump-sum gratuity payments on retirement or termination of employment are taxable. However, loss-of-employment compensation is exempt up to ₦50 million. Amounts above that threshold are subject to PAYE at the applicable band rate.

No. The 1% minimum tax that previously applied when a taxpayer had no chargeable income (or taxable income was below a threshold) has been completely abolished under the NTA 2025. If your income falls within the ₦800,000 tax-free band, your liability is zero.

Standard-rate companies (turnover above ₦100 million) pay CIT at 30% of assessable profit, plus a 4% Development Levy on the same profit. Small companies — those with turnover of ₦100 million or below and gross assets of ₦250 million or below — are fully exempt from CIT, CGT, and the Development Levy.

The medium-company classification (20% CIT rate) has been abolished. Under the NTA 2025, there are only two tiers: small companies (exempt) and standard companies (30% CIT). This simplification reduces compliance complexity for businesses near the old threshold boundaries.

The Development Levy consolidates several former levies — the Tertiary Education Tax (2.5%), the Information Technology Development Levy (1%), the NASENI levy, and the Police Trust Fund levy — into a single 4% charge on assessable profit. Only standard-rate companies are liable. Small companies are exempt.

The NTA 2025 retains the capital allowance framework but introduces accelerated depreciation for qualifying green-energy assets and digital infrastructure. Initial and annual rates for standard asset classes remain largely unchanged, though the investment tax credit for manufacturing has been expanded.

The standard VAT rate remains 7.5%, unchanged from the 2020 increase. The NTA 2025 did not alter the rate. However, the framework now mandates full input VAT recovery for registered businesses and requires electronic invoicing for all taxable transactions.

Key exemptions include basic food items (unprocessed agricultural produce, staple grains), medical and pharmaceutical products, educational materials, baby products, agricultural equipment, and exported services. The NTA 2025 expanded the exemption list to further protect low-income households.

Yes. All VAT-registered businesses must issue electronic invoices for taxable supplies effective January 2026. The NRS provides an e-invoice platform, and approved third-party providers can also be used. Failure to issue e-invoices attracts penalties.

Under the NTA 2025, businesses can now recover the full amount of input VAT incurred on goods and services used for making taxable supplies. The previous restrictions that limited input recovery on certain categories have been removed.

Rates vary by payment type and recipient status. Dividends: 10%. Rent (companies): 10%, (individuals): 5%. Contracts and professional services: 10% for companies, 5% for individuals. Interest: 10%. Royalties: 10%. Commission: 10% for companies, 5% for individuals.

Small companies and unincorporated entities are exempt from both deducting and suffering WHT on transactions valued at ₦2 million or below per month, provided the supplier holds a valid TIN. This reduces the compliance burden on micro and small businesses.

No. Withholding tax is an advance payment of income tax, not a separate levy. When you file your annual return, WHT already deducted is offset against your total liability. If WHT exceeds your actual tax, you can apply for a refund or carry the credit forward.

Employers must file the annual PAYE return by 31 January of the following year. For example, the return for the 2026 tax year is due by 31 January 2027. Monthly PAYE remittances must be made within 10 days after the end of each month.

Companies must file their CIT return within six months of their accounting year-end. For companies with a December year-end, the filing deadline is 30 June of the following year. The return must be accompanied by audited financial statements and tax computations.

Yes. Under the NTA 2025, electronic filing through the NRS portal is the only accepted channel for all tax returns — PAYE, CIT, VAT, and WHT. Paper returns are no longer accepted. Taxpayers must register on the NRS e-filing platform to submit returns and make payments.

Visit the NRS portal or any NRS office with your National Identification Number (NIN), a valid ID, and proof of address. The TIN is generated instantly online. Businesses need their CAC registration documents in addition to the above. TIN registration is free.

The Nigeria Tax Act 2025 was signed into law in late 2025 and took effect on 1 January 2026. It replaces the Personal Income Tax Act, Companies Income Tax Act, Value Added Tax Act, Capital Gains Tax Act, and several other statutes with a single consolidated law.

The NTA 2025 reform package comprises four Acts: (1) the Nigeria Tax Act — covering PAYE, CIT, VAT, CGT, WHT, and the Development Levy; (2) the Tax Administration Act — procedures, penalties, and taxpayer rights; (3) the Nigeria Revenue Service Act — replacing FIRS with NRS; and (4) the Joint Revenue Board Act — federal-state coordination.

The NRS replaces the Federal Inland Revenue Service (FIRS) as the primary federal tax authority. It has broader digital enforcement powers, including AI-driven audit capabilities, mandatory e-filing, and a restructured governance framework with greater operational independence.

The Act introduces Significant Economic Presence rules for taxing non-resident digital companies. Pillar 2 global minimum tax provisions apply to large multinationals. Cross-border digital services are now explicitly subject to VAT, and cryptocurrency transactions are taxable events.

No. Taxngr is an independent educational platform. We are not affiliated with the Nigeria Revenue Service, any state revenue authority, or any government body. Our tools and content are for informational purposes only and should not be treated as professional tax advice.

Our calculators use the official rates, bands, and thresholds published in the NTA 2025 gazette and verified against analysis by leading advisory firms. However, individual tax situations may involve exemptions, incentives, or deductions not captured by a general-purpose tool. We recommend consulting a qualified professional for complex scenarios.

No. All calculations run entirely in your browser using JavaScript. No salary figures, income data, or financial information is sent to our servers or stored anywhere. You can verify this by checking the network tab in your browser developer tools during a calculation.

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