Nigeria Tax Act, 2025 — The Final Provisions That Redefine Nigeria’s Entire Tax Landscape

Nigeria Tax Act, 2025 — The Final Provisions That Redefine Nigeria’s Entire Tax Landscape

By Baha’s Books | www.bahasbooks.com

The final part of the Nigeria Tax Act, 2025 serves as the grand conclusion of the nation’s new unified tax framework. It consolidates, clarifies, and modernizes every aspect of taxation in Nigeria — from waivers and refunds to repeals, amendments, and supremacy over older tax laws. This section is not just a procedural ending; it is the legal backbone that ensures the Act’s smooth transition, continuity of operations, and authority over every other tax-related statute in the country.

Waivers, Refunds, and the Principle of Fairness

The Act opens this final section with Section 193, which introduces a principle grounded in tax equity — no business should benefit twice from the same expense. It explains that if a company has previously claimed a tax deduction on an expense (for example, a supplier debt, loan interest, or liability), and that expense is later forgiven, refunded, or released, the forgiven amount must now be treated as taxable income in the year of the refund.

To illustrate, if a business deducts ₦5 million as a liability in its accounts and later the creditor cancels that debt, the ₦5 million must now be added back as income because the company has effectively gained that value. This provision closes a loophole where companies could have otherwise enjoyed deductions on amounts they never ultimately paid.

The same logic applies to capital expenses. If a loan used to purchase an asset — say, industrial machinery — is later written off, the written-off amount is recognized as a chargeable gain. The law ensures that any financial advantage derived from such forgiveness or relief is properly taxed. This section reinforces accountability and prevents misuse of deductions and write-offs under Nigeria’s new tax regime.

Interpretation and Uniformity in Tax Administration

Section 194 focuses on the importance of clarity and consistency in how tax laws are interpreted. It declares that terms such as “profits,” “income,” or “gains” cover all taxable inflows, whether assessed directly or through deduction at source. This prevents confusion over the classification of earnings and ensures that every form of economic benefit, no matter its label, is subject to fair taxation.

It also emphasizes that all tax computations or apportionments must be “just and equitable” — in other words, the Federal Inland Revenue Service (FIRS) and taxpayers alike must use consistent and transparent methods across similar situations. This guarantees fairness, standardization, and predictability — three essential traits of a mature tax system.

Empowering FIRS to Regulate and Implement

Section 195 gives the Federal Inland Revenue Service (FIRS) the authority to make regulations, issue directives, and create administrative procedures to implement the provisions of this Act — but only with the approval of the Minister. This delegation of authority is crucial for practical tax administration. Laws tend to evolve slowly, but economic realities shift rapidly. This provision ensures that FIRS can respond dynamically through operational rules and guidance, keeping Nigeria’s tax system both modern and efficient.

This power includes the right to design filing systems, compliance frameworks, and assessment procedures that help businesses and individuals meet their obligations under the new tax law.

A Unified Framework: Repeal of Old Tax Laws

Perhaps the most historic feature of this section is found in Section 196, which repeals nearly every major tax law that had existed independently before 2025. These include the Capital Gains Tax Act, Casino Act, Companies Income Tax Act, Petroleum Profits Tax Act, Personal Income Tax Act, Industrial Development (Income Tax Relief) Act, Stamp Duties Act, Value Added Tax Act, and several others.

By repealing these Acts, the Nigeria Tax Act, 2025 becomes the single, unified law governing all forms of taxation in the country. It eliminates duplication, overlaps, and inconsistencies that previously complicated Nigeria’s tax environment. For decades, taxpayers had to navigate multiple Acts and schedules; this new framework consolidates them into one cohesive system that is easier to interpret, apply, and enforce.

This repeal represents a shift toward modernization — harmonizing Nigeria’s tax structure with international best practices and making compliance more predictable for businesses, individuals, and multinational corporations operating within the country.

Consequential Amendments Across Other Laws

Section 197 proceeds to align other Nigerian laws with the new tax regime. It amends or deletes conflicting provisions from several Acts, including the Petroleum Industry Act (2021), Nigeria Export Processing Zones Act, Oil and Gas Export Free Trade Zone Act, National Information Technology Development Agency (NITDA) Act, Tertiary Education Trust Fund (TETFUND) Act, and others.

These amendments are not cosmetic — they are deliberate corrections designed to prevent overlapping tax provisions. For example, the deletion of parts of the Petroleum Industry Act ensures that taxation within oil and gas is now governed exclusively by this new unified framework. Similarly, the removal of sections in the NITDA and TETFUND Acts standardizes tax collection processes across industries.

By updating these laws, the Act brings all sectors — oil, gas, mining, technology, education, and more — under a single, coordinated tax regime. This creates uniformity and prevents the confusion that previously arose when multiple agencies claimed overlapping tax jurisdictions.

Revocation of Old Tax Regulations

In Section 198, the Act revokes old subsidiary instruments and executive orders that supported the repealed laws. This includes the Value Added Tax (Modification) Order, 2021, the Companies Income Tax (Significant Economic Presence) Order, 2020, and parts of the Petroleum (Drilling and Production) Regulations, 1969.

These revocations are vital because they sweep away outdated administrative orders and regulations that could conflict with the new legal framework. It ensures that every rule guiding taxation — from VAT collection to international corporate reporting — is consistent with the Nigeria Tax Act, 2025.

Saving Provisions: Ensuring a Smooth Transition

Section 199 introduces what legal practitioners call saving provisions. These rules protect existing rights, actions, and obligations when old laws are repealed. In practical terms, it means that:

  • Any tax cases, assessments, or audits that began under old laws continue as if they had been started under the new Act.

  • Any circulars, notices, or administrative guidelines issued under repealed laws remain valid — unless they contradict the new provisions.

  • Any tax liabilities, penalties, or refunds still in process will proceed to completion under this new framework.

  • Any legitimate actions taken or payments made before the commencement of this Act remain lawful and binding.

This prevents disruption during Nigeria’s transition to the new tax regime and ensures that ongoing enforcement and compliance operations remain legally sound.

Powers, Duties, and Coordination with the Tax Administration Act

Section 200 establishes that all duties, powers, and rights exercised under this Act must align with the Nigeria Tax Administration Act, 2025. This creates a link between the substantive tax law (which defines what taxes apply) and the administrative law (which governs how taxes are assessed, collected, and enforced).

This connection ensures coherence across all tax-related agencies, providing a single administrative backbone for Nigeria’s fiscal governance.

Supremacy of the Nigeria Tax Act, 2025

Finally, Section 201 makes an emphatic declaration: the Nigeria Tax Act, 2025 takes precedence over every other law relating to taxes, royalties, levies, or surcharges in the country. If there is ever a conflict between this Act and any other law — whether old or newly enacted — this Act prevails, except where the Constitution itself provides otherwise.

This supremacy clause establishes the Nigeria Tax Act, 2025 as the ultimate authority on taxation in Nigeria. It also stipulates that all rules regarding taxable income, allowable deductions, reliefs, and assessments must now be determined solely under this Act. The era of fragmented tax laws is officially over.

The New Dawn of Nigerian Tax Reform

The concluding provisions of the Nigeria Tax Act, 2025 symbolize more than just the end of a document; they represent a milestone in Nigeria’s fiscal evolution. This Act unifies scattered tax systems, removes outdated laws, strengthens administrative power, and ensures fairness, consistency, and legal certainty in all taxation matters.

By repealing and replacing more than a dozen old laws, empowering FIRS to adapt quickly through regulation, and creating saving provisions for seamless transition, the Act achieves three monumental goals:

  1. Simplification: One law now governs all major taxes in Nigeria, making compliance easier and more transparent.

  2. Stability: Businesses, individuals, and government bodies now operate under a single tax framework, reducing ambiguity and disputes.

  3. Certainty: The supremacy clause eliminates confusion over which tax law applies — the Nigeria Tax Act, 2025 now stands as the definitive guide.

Through these reforms, Nigeria steps into a new era of fiscal governance — one that emphasizes fairness, accountability, and modernization. The Nigeria Tax Act, 2025 is not merely a legal reform; it is a structural foundation for a stronger, more transparent, and investor-friendly economy.

For comprehensive insights on Nigeria’s new tax environment, accounting compliance, and how your business can adapt to these changes, visit www.bahasbooks.com — your trusted partner in tax interpretation, professional accounting guidance, and financial clarity.

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