Nigeria is entering a new tax era.
From 2026, a set of revised and consolidated tax laws will begin reshaping how businesses are taxed, how compliance is enforced, and how government revenue is collected. These reforms are part of the Federal Government’s broader effort to simplify taxation, expand the tax base, modernise administration, and reduce pressure on small businesses.
For founders, startups, and growing companies, the changes are not just about paying tax, they affect cash flow, fundraising readiness, exits, payroll, pricing, and long-term strategy.
When Do the New Tax Laws Take Effect?
The new tax framework has been passed into law and takes effect from January 1, 2026.
What Is the Core Goal of the New Tax Laws?
The reforms are designed to do four main things:
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Reduce the burden on small businesses and startups
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Simplify Nigeria’s fragmented tax system
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Improve compliance through digital systems
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Ensure larger and more profitable businesses pay their fair share
For founders, this signals a shift away from arbitrary enforcement toward structured, data-driven taxation.
What Founders Need to Know About Corporate Taxes
One of the most founder-relevant changes is the expanded relief for small companies.
Under the new framework:
Small companies below a defined turnover threshold qualify for significant corporate tax exemptions. Threshold is ₦100 million turnover and ₦250 million total assets.
Qualifying companies are exempt from core company income taxes and certain levies
What this means in practice:
Early-stage startups and MSMEs are being given more breathing room to reinvest revenue into growth, hiring, and product development rather than taxes.
However, once a company grows beyond the small-company threshold, standard corporate taxes apply, and compliance expectations increase sharply.
Capital Gains and Founder Exits: What Has Changed?
Capital gains taxation has been restructured to align more closely with company taxation.
This affects founders who:
Sell shares
Exit through acquisitions
Transfer ownership interests
Dispose of business assets
Founders can no longer treat tax as an afterthought at exit stage. Structuring, timing, and jurisdictional considerations now materially affect net outcomes.
Digital Businesses, Tech Startups, and Online Revenue
Nigeria’s tax reforms clearly acknowledge the rise of:
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Digital platforms
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Online services
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Remote and cross-border businesses
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Fintech and virtual asset operators
Under the new framework:
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Digital and virtual businesses fall more clearly within the tax net
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Reporting and documentation requirements are tightening
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Regulators are placing greater emphasis on traceability of transactions
This does not mean every tech startup will suddenly pay more tax but it does mean informality is no longer sustainable, especially for venture-backed or scale-oriented companies.
Crypto and Virtual Assets
For the first time, Nigeria’s tax laws more explicitly recognise virtual and digital assets.
Key points founders should understand:
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Gains from virtual assets are treated as taxable income
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Businesses operating in this space face enhanced compliance obligations
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Record-keeping and transaction clarity matter more than ever
VAT: What Has Changed for Businesses?
The VAT rate itself remains at 7.5%.
Changes focus on:
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Clearer classification of taxable and exempt items
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Improved ability to claim legitimate VAT credits
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Digital invoicing and reporting systems
For founders, this means:
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Better documentation reduces VAT leakage
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Poor records increase audit and penalty risk
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Pricing models should factor VAT treatment correctly
Personal Income Tax: Founders and Employees
The reforms also update personal income tax bands, making the system more progressive.
This affects:
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Founders paying themselves salaries
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Senior employees and executives
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Payroll planning for growing teams
The key implication is not just higher or lower rates, it is increased enforcement consistency, especially as tax systems integrate more closely with banking and identity data.
Compliance Is No Longer Optional
One of the clearest signals from the new tax laws is this:
Every registered business must file returns even if no tax is owed.
This includes:
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Dormant companies
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Pre-revenue startups
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Grant-funded ventures
Non-filing, inaccurate filings, or late submissions now carry clearer penalties, and enforcement is expected to be more automated.
What Founders Should Do Now
Founders should use 2025 to prepare deliberately:
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Ensure your business is properly registered and has a valid Tax Identification Number. Registration can be done at Corporate Bestie.
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Adopt basic digital accounting early, even if revenue is small
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Separate personal and business finances clearly
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Understand whether your company qualifies as a small business under the new framework
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Seek tax advice before fundraising, restructuring, or exits
These steps reduce risk and improve credibility with investors and partners.
For founders who plan early, keep clean records, and understand their obligations, the reforms can actually reduce friction, improve investor confidence, and support long-term growth.
The risk is not in the law itself.
The risk is ignoring it.
