You filed returns for years under Nigeria’s old tax framework. Then President Bola Ahmed Tinubu signed four sweeping tax reform bills into law on June 26, 2025, and the landscape shifted completely.
The Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service (Establishment) Act 2025, and the Joint Revenue Board (Establishment) Act 2025 took effect on January 1, 2026. On June 18, 2026, the Federal Ministry of Finance released detailed transition guidelines addressing income taxes, capital gains, incentives, and refund claims.
If you earn income in Nigeria, sell assets, or claim VAT refunds, the core question is simple. Did your accounting period end before January 1, 2026, or from that date onward?
How Nigeria Tax Act transition rules split 2025 and 2026 obligations
The new Tax Acts apply prospectively from January 1, 2026, and no taxes or penalties under the new framework can target periods before that date, the transition guidelines confirmed.
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Tax returns for accounting periods ending before January 1, 2026, must be filed under the repealed laws, including the Companies Income Tax Act and Capital Gains Tax Act. Returns for periods ending from that date onward fall under the new Nigeria Tax Act framework.
This matters for companies filing in 2026 for a December 2025 year-end, because those filings remain subject to the old laws. The applicable law depends on the relevant basis period, not the year of filing, Mondaq reported.
Capital gains on 2025 asset disposals carry a major tax shift
The old Capital Gains Tax Act taxed asset disposals at a flat 10% rate on an actual-year basis for all taxpayers. The Nigeria Tax Act 2025 scrapped that standalone regime and folded capital gains into the broader income tax framework.
Companies now face a 30% rate on chargeable gains, tripling the previous charge, while individuals pay at progressive income tax rates. Gains on assets disposed of during 2025 will be included in assessable income for the 2026 Year of Assessment, Forvis Mazars explained.
Taxpayers who already paid the old 10% CGT on 2025 disposals face a potential double-taxation risk on those same gains. The Nigeria Revenue Service is expected to issue guidance on whether such gains will be excluded from 2026 filings, Forvis Mazars noted.
The expanded scope also covers digital and virtual assets, including crypto tokens and non-fungible tokens, alongside indirect share transfers. Share disposal exemptions sit at ₦150 million in proceeds within any 12-month period, provided gains stay below ₦10 million, PwC Nigeria confirmed.
Pioneer Status Incentive applications closed, but existing certificates survive
The Nigerian Investment Promotion Commission stopped accepting Pioneer Status Incentive applications on November 10, 2025, preparing for the Economic Development Tax Incentive scheme. Companies holding active PSI certificates before that cutoff continue receiving tax relief for the unexpired priority period, KPMG confirmed.
Applicants with pending PSI applications had until February 27, 2026, to complete the process or face nullification, the NIPC warned in a public notice.
Prof. Uche Uwaleke, Director of the Institute of Capital Market Studies at Nasarawa State University Keffi, described the rationale in an interview with Daily Trust:
“The transition to EDTI scheme is part of government efforts to modernize and streamline Nigeria’s investment incentive framework. The pioneer status incentive has served its purpose for many years, but it became clear that a more transparent, data-driven and performance-based approach was needed.” — Prof. Uche Uwaleke, Nasarawa State University Keffi
The EDTI offers an Economic Development Tax Credit of 5% per year on eligible capital expenditures over a five-year period. This credit-based model ties relief directly to verifiable capital investments in priority sectors.
VAT refund claims for 2025 transactions face a strict 12-month deadline
Taxpayers may still request VAT refunds in 2026 for qualifying 2025 transactions under the old VAT Act, provided the request reaches the Nigeria Revenue Service within 12 months of the transaction date, Forvis Mazars noted. False refund claims carry a 100% penalty and interest at the Central Bank of Nigeria monetary policy rate, EY warned.
Transaction timing, not payment date, determines which law applies
The guidelines address transactions straddling the January 1, 2026, boundary with a clear rule for withholding tax, VAT, and stamp duties. The determining factor is when the underlying transaction occurred, not when payment was made.
Goods supplied or services rendered on or before December 31, 2025, remain subject to the repealed laws even if payment arrives in 2026. Contracts executed after the commencement date are taxed on the portion performed after that date, the guidelines specified.
Ongoing audits and disputes remain under the old tax framework
Tax assessments, audits, and enforcement actions for periods before January 1, 2026, will continue under the repealed laws. Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, emphasized the non-retroactive nature of the new regime.
“The document provides a framework for managing transitional issues while ensuring that the new laws are not applied retrospectively,” Oyedele stated, the Federal Ministry of Finance reported.
Where conflicts arise between old and new laws, the new Acts take precedence, but interpretation must favor taxpayer rights. Unresolved conflicts should be referred to the relevant tax authority, the Federal Ministry of Finance directed.
Key deadlines under the Nigeria Tax Act transition rules
- 2025 accounting period returns: File under the old Companies Income Tax Act, Personal Income Tax Act, and Capital Gains Tax Act regardless of 2026 filing date.
- 2025 asset disposals: Include gains in 2026 Year of Assessment income, taxed at 30% for companies under the new Nigeria Tax Act.
- Pioneer Status Incentive: NIPC stopped accepting new applications on November 10, 2025; existing certificates remain valid until original expiry dates.
- Pending PSI applications: Completion deadline was February 27, 2026, or the application was nullified by the NIPC.
- 2025 VAT refunds: Submit requests to the Nigeria Revenue Service within 12 months of the qualifying transaction date under the old VAT Act.
- Transaction timing: The date of supply or service, not the payment date, determines whether old or new laws apply to WHT, VAT, and stamp duties.
- Ongoing audits: All assessments, audits, and disputes for pre-2026 periods continue under the repealed tax legislation.
