Key differences between the repealed tax laws and the Nigeria Tax Act 2025
Six graduated bands replaced with new thresholds. Lower earners pay less, top rate reduced from 24% to 25% but kicks in at much higher income.
| Old Law (PITA) | |
|---|---|
| Band | Rate |
| First N300K | 7% |
| Next N300K | 11% |
| Next N500K | 15% |
| Next N500K | 19% |
| Next N1.6M | 21% |
| Above N3.2M | 24% |
| New Law (NTA 2025) | |
|---|---|
| Band | Rate |
| Up to N800K | 0% |
| N800K - N3M | 15% |
| N3M - N12M | 18% |
| N12M - N25M | 21% |
| N25M - N50M | 23% |
| Above N50M | 25% |
Individuals earning up to N800,000/year (~N67K/month) now pay zero income tax. Previously, tax started from the first naira after CRA.
The old CRA formula (N200K or 1% of income + 20% of net income) has been abolished. Replaced by the flat N800K tax-free threshold and specific reliefs.
New deduction: 20% of annual rent paid, capped at N500,000. Aimed at reducing the burden on renters in urban areas.
Compensation for loss of employment now exempt up to N50 million (previously N10M). Excess is taxable.
The standard company income tax rate remains at 30% for large companies. No change here.
Small companies (0% CIT) threshold raised. Now defined as turnover ≤N50M AND fixed assets ≤N250M.
Large multinationals with ≥N20B aggregate turnover must pay at least 15% effective tax rate. Aligned with OECD Global Minimum Tax (Pillar Two).
Targets MNEs only Calculate CITThe VAT rate stays at 7.5%. The earlier proposal to increase to 10-15% was dropped after pushback.
Now VAT-exempt:
New distribution formula gives more to states:
Replaces 5 separate levies (TET, IT Levy, NASENI, NITDF, Police Trust Fund) with a single 4% levy on assessable profits. Small companies exempt.
Simplifies compliance Calculate Dev LevyNew 5% surcharge on fossil fuel products. Monthly filing required. Exempt: cooking gas (LPG), kerosene, CNG, and renewable energy.
Increases fuel-linked costsCryptocurrency and digital assets classified as taxable property. Profits and gains from crypto transactions are now subject to Capital Gains Tax.
Affects crypto traders Calculate CGTBroader mandate, modernized structure
Better federal-state coordination
N25M/month (individuals), N100M/month (corporate)
Replaces PITA, CITA, PPTA, VAT Act, CGT Act, Stamp Duties Act