A candidate computes a company’s tax for the year ended 31 December 2025 and uses a 20% rate because the turnover is ₦50 million. A second candidate computes the tax for 2026 and uses the ₦25 million small company threshold. Both use the wrong law for their year. Since 1 January 2026 Nigeria has had a new set of tax laws, and the Pathfinder marking guides for past papers follow the old ones.
The first thing to decide in every question is which law governs the period.
This topic sets out the new laws, the dates, a table of what changed in each area, and how to decide which rules to use. The previous topic covered the Startup Act. It is the last in the course.
In 30 seconds
The laws: four Acts signed on 26 June 2025: the Nigeria Tax Act (NTA), the Nigeria Tax Administration Act (NTAA), the Nigeria Revenue Service Act and the Joint Revenue Board Act. Effective: 1 January 2026. Old law: periods ending before 1 January 2026, and the Pathfinder marking guides. New law: periods from 2026. The NTA repeals CITA, PITA, CGTA, VATA, the Stamp Duties Act, the Industrial Development (Income Tax Relief) Act and others.
Key terms in plain English
| Term | What it means |
|---|---|
| Nigeria Tax Act 2025 | The Act that consolidates income, gains, VAT and other federal taxes |
| Nigeria Tax Administration Act 2025 | The Act on registration, returns, assessment, collection and penalties |
| Nigeria Revenue Service | The body that replaced the Federal Inland Revenue Service |
| Development levy | A 4% levy on assessable profits that replaced several levies |
| Economic Development Incentive | A 5% a year credit for five years that replaced pioneer status |
| Minimum effective tax rate | A 15% floor for large multinational groups and companies with turnover of ₦20 billion or more |
Syllabus check
This topic is in syllabus area D, company taxation. It covers:
- the four 2025 Acts and their commencement
- how to choose between the old and new law
- a table of the main changes
CAMA 2020 and startups
The Companies and Allied Matters Act 2020 (CAMA 2020) is the company law of Nigeria. The sections below apply to this topic.
| Section | What it says | Link to this topic |
|---|---|---|
| s. 377(1) and s. 378 | Directors prepare financial statements that give a true and fair view | A startup must keep accounts that support its claim for an incentive |
| s. 305 and s. 308 | Directors must act in good faith and with the care, diligence and skill of a prudent director | Directors answer for meeting the conditions of the label and for correct claims |
| s. 119 | A company must keep proper books of account | Records of shareholding, R&D spending and training support each incentive |
The rules in more depth
The four Acts
On 26 June 2025 the President signed four Acts.
The Nigeria Tax Act 2025 consolidates the law on income, capital gains, VAT, stamp duties and other federal taxes, and repeals the Capital Gains Tax Act, the Casino Act, the Companies Income Tax Act, the Industrial Development (Income Tax Relief) Act, the Personal Income Tax Act, the Stamp Duties Act, the Value Added Tax Act and the Venture Capital (Incentives) Act, and amends the Export Processing Zones Act, the Oil and Gas Free Trade Zone Act and the NITDA Act.
The Nigeria Tax Administration Act 2025 covers registration, returns, assessment, collection, penalties and disputes. The Nigeria Revenue Service (Establishment) Act 2025 renames the Federal Inland Revenue Service the Nigeria Revenue Service (NRS), and the Joint Revenue Board Act replaces the Joint Tax Board. The NTA and the NTAA took effect on 1 January 2026. State revenue services become autonomous, and a Tax Ombud office handles complaints.
How to decide which law applies
- Find the period or the date in the question: the accounting period, the year of assessment, or the date of the transaction.
- If the period ended before 1 January 2026, use the old law and the rules as taught in the earlier topics. The Pathfinder marking guides apply the old law.
- If the period is from 1 January 2026, use the Nigeria Tax Act and the Nigeria Tax Administration Act.
- Where an accounting period straddles the date, read the transitional provisions of the Act, because the answer depends on them.
- For procedure (where to file and how), use the current procedure: from 30 April 2026 the Rev360 platform, and the Electronic Fiscal System for invoices.
What changed: a table
| Area | Old law (periods before 2026) | Nigeria Tax Act 2025 (from 2026) |
|---|---|---|
| Small company | Turnover ₦25 million or less; exempt if compliant | Turnover ₦50 million or less and fixed assets ₦250 million or less (professional services excluded); exempt from CIT, CGT and the development levy |
| Company rate | 0%, 20%, 30% by turnover | 30% for other companies |
| Levies on profit | Tertiary education tax (2% to 31 December 2021, 2.5% from 1 January 2022, 3% from 1 September 2023 under the Finance Act 2023), NITDA 1%, NASENI 0.25%, Police Trust 0.005% | One 4% development levy on assessable profits, replacing them |
| Minimum tax | 0.5% (0.25%) of gross turnover less franked income | Minimum effective tax rate of 15% for large multinational groups and companies with turnover of ₦20 billion or more |
| Capital gains | 10% under the Capital Gains Tax Act | 30% for companies; individuals at progressive income tax rates; the share sale exemption is for proceeds below ₦150 million in 12 months with gains up to ₦10 million; indirect transfers taxed |
| Personal income tax | 7% to 24% bands after the consolidated relief allowance | First ₦800,000 at 0%, rates up to 25%, no CRA, rent relief of 20% of rent up to ₦500,000; compensation for loss of employment exempt up to ₦50 million |
| Residence of individuals | Domicile, 183 days, diplomat | Defined in the Act, including substantial economic and family ties |
| VAT | 7.5%; limited input recovery | 7.5%; input VAT recoverable on services and fixed assets; wider zero rating (basic food, medicines, books, tuition, exports other than oil and gas); e-invoicing mandatory; revenue shared 10% federal, 55% states and 35% local governments |
| Incentives | Pioneer tax holiday | Economic Development Incentive: 5% a year tax credit for five years on qualifying capital expenditure |
| Free zones | Exempt if 100% export oriented | Exempt on exports; proportionate tax if more than 25% of sales are into the customs territory; from 1 January 2028 full tax on sales into it |
| Non-residents | Fixed base, agent, single contract, significant economic presence | Force of attraction; tax on EPC contracts; minimum tax of at least the WHT rate or 4% of income |
| Penalties | ₦25,000 then ₦5,000 a month for late return | ₦100,000 then ₦50,000 a month; ₦5 million for contracting with unregistered persons |
| Administration | FIRS; JTB; TaxProMax | NRS; Joint Revenue Board; Rev360; Tax Ombud; duty to disclose tax planning arrangements |
Why the Pathfinder uses the old law
The marking guides in the Pathfinder were written for examinations on periods before 2026, and each past question must be answered under the law in force for its period. A student who revises the past questions should therefore use the old rules in each topic, and then read the “position from 2026” section to see how the answer would differ under the new Act. Questions on periods after 2026 will follow the Act.
The position from 2026
This whole topic describes the position from 2026. For each earlier topic, the matching section sets out the new rule. The Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 are the source for every rule in this topic.
Worked examples
Example 1: which rate? A company has turnover of ₦50 million for the year ended 31 December 2025.
- The period ended before 1 January 2026, so the old law applies: turnover above ₦25 million and below ₦100 million gives a medium company at 20%.
Example 2: the same company in 2026. The company has turnover of ₦50 million and fixed assets of ₦120 million for the year ended 31 December 2026, and is not a professional services firm.
- Turnover is ₦50 million or less and fixed assets are ₦250 million or less, so it is a small company, exempt from CIT and the development levy.
Example 3: a bigger company. A company has turnover of ₦300 million and assessable profit of ₦100 million for 2026.
- It is not small, so it pays 30% on total profit and a 4% development levy on assessable profit: levy = 4% × ₦100 million = ₦4 million.
Example 4: personal tax. An employee has taxable income of ₦5,000,000 in 2026.
- First ₦800,000 at 0%; next ₦2,200,000 at 15% = ₦330,000; next ₦2,000,000 at 18% = ₦360,000. Tax = ₦690,000, with no consolidated relief allowance.
Example 5: a late return. A return is filed three months late.
- Old law.
₦25,000 + 2 × ₦5,000 = ₦35,000. - New law.
₦100,000 + 2 × ₦50,000 = ₦200,000.
How to score full marks
- Write the date or period first and name the law that applies.
- Use the old rules for past-paper practice, and the new ones when the question gives 2026 dates.
- Quote the correct thresholds for the law you chose.
- Show in one line what would change under the other law, if asked to compare.
Common mistakes in the exam
- Applying 2026 thresholds to a 2025 period.
- Using the consolidated relief allowance for a 2026 individual.
- Giving tertiary education tax for 2026.
- Writing FIRS for a 2026 procedure.
Quick revision
- Four Acts, 26 June 2025, effective 1 January 2026.
- Small company ₦50m turnover and ₦250m fixed assets (professional services excluded); 30%; 4% levy; 15% minimum ETR.
- PIT: ₦800,000 at 0%, up to 25%, no CRA.
- NRS, Rev360, Joint Revenue Board.
Practice questions
Questions 1 to 10 are multiple choice. Questions 11 to 13 are written. Try each before opening the answer.
Question 1. The four tax Acts were signed on:
- 1 January 2026
- 26 June 2025
- 1 January 2025
- 30 April 2026
Show the answer
B. 26 June 2025.
Question 2. They took effect on:
- 26 June 2025
- 1 October 2025
- 1 January 2026
- 1 April 2026
Show the answer
C. 1 January 2026.
Question 3. Which Act is repealed by the NTA?
- CAMA 2020
- CITA
- The Constitution
- The Partnership Act
Show the answer
B. CITA, PITA, CGTA and others.
Question 4. The new small company turnover limit (section 202) is:
- ₦25 million
- ₦50 million
- ₦100 million
- ₦500 million
Show the answer
B. ₦50 million with fixed assets up to ₦250 million.
Question 5. The development levy rate is:
- 2%
- 2.5%
- 4%
- 10%
Show the answer
C. 4% of assessable profits.
Question 6. Under the new law the first ₦800,000 of personal income is taxed at:
- 0%
- 7%
- 15%
- 25%
Show the answer
A. Nil.
Question 7. The Federal Inland Revenue Service is now called the:
- Joint Revenue Board
- Nigeria Revenue Service
- Tax Ombud
- Revenue Authority
Show the answer
B. NRS.
Question 8. Pathfinder marking guides use:
- The new law
- The old law for earlier periods
- No law
- Foreign law
Show the answer
B. They apply to periods before 2026.
Question 9. Capital gains of a company are taxed at:
- 10%
- 20%
- 30%
- 0%
Show the answer
C. 30% under the new law.
Question 10. Pioneer status is replaced by:
- Economic Development Incentive
- Rural allowance
- VAT relief
- Nothing
Show the answer
A. A 5% a year credit for five years.
Question 11 (10 marks). State how a candidate decides which tax law applies to a question. (6 marks)
Question 12 (10 marks). Compare the old and new rules for small companies, levies on profit and capital gains. (10 marks)
Question 13 (10 marks). Compute the personal income tax of an individual with taxable income of ₦4,000,000 for 2026. (6 marks)
Model answers
Show the model answer to Question 11
Find the accounting period or date. (1) If it ended before 1 January 2026, use the old law, as the Pathfinder marking guides do. (2) If it is from 1 January 2026, use the Nigeria Tax Act and the Administration Act. (2) Check the transitional provisions for a period that straddles the date. (1)
Show the model answer to Question 12
Small company: ₦25 million before; ₦50 million turnover and ₦250 million fixed assets now, excluding professional services. (3) Levies: tertiary education tax, NITDA, NASENI and Police Trust levies before; one 4% development levy now. (3) Capital gains: 10% before; 30% for companies now, and progressive rates for individuals. (4)
Show the model answer to Question 13
First ₦800,000 at 0% = nil. (1) Next ₦2,200,000 (to ₦3,000,000) at 15% = ₦330,000. (2) Next ₦1,000,000 at 18% = ₦180,000. (2) Tax = ₦510,000. (1)
Pathfinder on Which law applies: the old law, the Nigeria Tax Act 2025 and what changed
These are the ICAN Pathfinder questions that test this topic. ICAN owns the questions and the suggested solutions, so we point you to them and do not copy them. Open your Pathfinder, attempt each question under exam conditions, then check your answer against the notes above.
Revise first: What changed: a table
Revise first: How to decide which law applies
Source: ICAN Pathfinder, Taxation. Diets covered: May 2026 and November 2025.
Spotted a mistake? Tell us and we will check it.
