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Nigeria’s 2025 tax reforms introduced important changes to the treatment of small companies, including new thresholds for Companies Income Tax and VAT purposes, revised compliance obligations, and specific exclusions for professional services businesses. Our latest article examines what these changes mean for qualifying businesses and the key compliance considerations they should keep in view.
Nigeria’s 2025 tax reforms have introduced a new framework for the taxation and administration of small companies, with important implications for how businesses assess eligibility for tax reliefs and meet their ongoing compliance obligations.
Under the Nigeria Tax Act 2025, a qualifying small company is subject to a 0% Companies Income Tax rate, provided it meets the applicable turnover and fixed asset criteria and does not fall within the excluded category of professional services businesses.
The framework also introduces a separate definition of a small business for VAT administration under the Nigeria Tax Administration Act 2025. This distinction is significant because the turnover thresholds for Companies Income Tax and VAT are not the same.
As a result, a business may qualify for relief under one tax category but not another.
The reforms also make clear that a 0% Companies Income Tax rate does not automatically remove a company from the tax system. Registration, record keeping, accounting and annual filing obligations may still apply, even where no tax is payable for the relevant year.
The exclusion of professional services businesses from the relevant small company and small business definitions is another important consideration, particularly for knowledge based, advisory and professional firms assessing their eligibility under the new regime.
In this article, Nkem Isiozor, Senior Associate, and Damilare Said, Associate, examine the key changes introduced by the 2025 Tax Acts and the practical compliance implications for small businesses in Nigeria.
The key takeaway is that businesses should assess eligibility separately under each applicable tax provision and maintain appropriate records to support the tax position taken.
Read the full article for a detailed analysis of the new framework and what it means for small companies operating in Nigeria.
Important Notice: The information contained in this Article is intended for general information purposes only and does not create a lawyer-client relationship. It is not intended as legal advice from Jackson, Etti, & Edu (JEE) or the individual author(s), nor intended as a substitute for legal advice on any specific subject matter. Detailed legal counsel should be sought prior to undertaking any legal matter. The information contained in this Article is current to the last update and may change. Last Update: October 1, 2024.
