TAX SERVICES

Nigeria’s new tax laws, enacted on June 26, 2025, aim to modernize the tax system and boost compliance. The reforms have both positive and negative implications for the ICT and cybersecurity sector. Positive aspects include: However, there are also concerns: The reforms also have indirect impacts, such as increased tax clarity for multinationals, potential effects on NGOs and cyber capacity building, and tax residency rules affecting foreign ICT talent mobility. Overall, the tax reforms are ambitious and necessary, but require targeted adjustments to support innovation, digital resilience, and inclusivity in the ICT and cybersecurity sector. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Federal Government has introduced sweeping changes to Nigeria’s tax framework under the newly enacted Nigerian Tax Act (NTA), set to take effect in January 2026. Among the most impactful reforms is the expansion of the Value Added Tax (VAT) exemption list — a move aimed at reducing the cost of essential goods and supporting vulnerable populations. Key Highlights: Under the new law, 24 items are now entirely exempt from VAT, including: This development marks a significant policy shift aimed at easing the tax burden on essential goods and services while improving the purchasing power of everyday Nigerians. “The exemption of products like sanitary pads and diesel reflects a more socially responsive tax system that considers both health equity and rising energy costs,”. Why This Matters for Nigerians The VAT exemption means consumers and businesses will no longer pay the standard 7.5% tax on these essential items, which should lead to lower retail prices, especially on high-demand goods such as diesel and agricultural inputs. This is also expected to benefit: Implications for Businesses Companies dealing in exempt goods and services should immediately: At Sunmola David, we provide tailored VAT compliance support to help your business adjust efficiently to these reforms. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

Under sweeping reforms introduced in the Nigerian Tax Act (NTA), which takes effect in January 2026, the Federal Government has decided to retain the corporate income tax (CIT) rate at 30 percent for all companies, except small businesses. The Act maintains a 0 percent CIT rate for small companies—defined as those with annual turnover below ₦25 million—while affirming a flat 30 percent rate for all other firms. According to the Act:“Tax shall be levied… at 0% for small companies and 30% for any other company from the commencement of this Act.” A key innovation in the new law is the introduction of a minimum effective tax rule: large companies—especially members of multinational enterprise (MNE) groups—with annual revenue of ₦20 billion or more and an effective tax rate below 15 percent in any given year will be required to pay an additional levy to meet that threshold. The Act also eliminates the existing 10 percent Capital Gains Tax (CGT), integrating it into the broader corporate tax structure and repealing the Capital Gains Tax Act entirely. Scrapped Plans to Lower CIT This decision follows prolonged discussions around tax competitiveness. In mid-2024, Taiwo Oyedele, chair of the Presidential Fiscal Policy and Tax Reforms Committee, proposed lowering the CIT to 25 percent to attract investment and stimulate economic activity. Similarly, a 2023 legislative bill aimed to reduce the rate to 27.5 percent in 2025 and 25 percent by 2026. However, both proposals have now been abandoned. With these reforms, the government is signaling its intent to strengthen revenue collection while preserving targeted incentives for small businesses—striking a balance between fiscal responsibility and long-term economic growth as Nigeria works toward its $1 trillion economy goal. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

In a landmark judgment, the Court of Appeal, Abuja Division, has affirmed the legal authority of the Economic and Financial Crimes Commission (EFCC) to investigate and prosecute matters relating to tax evasion and associated financial crimes. Delivering the unanimous judgment of the three-member panel—which included Justices Balkisu Bello Aliyu, Adebukunola Banjoko, and Okon Efreki Abang—Justice Aliyu ruled that the EFCC is legally empowered to extend its investigations into tax-related offenses, particularly when tax evasion is tied to money laundering. This appellate decision overturns an earlier ruling by the Federal High Court, Abuja, delivered by Justice Taiwo O. Taiwo, which held that the EFCC lacked statutory power to investigate tax evasion and that such matters fall solely under the jurisdiction of the Federal Inland Revenue Service (FIRS). The case originated from a suit filed by Insurance Resourcery and Consultancy Service Limited, which challenged the EFCC’s investigation into its tax affairs, arguing that only the FIRS had the legal mandate to do so. However, the Court of Appeal held otherwise. Justice Aliyu referenced Section 46 of the EFCC Act, emphasizing that the law permits the Commission to investigate financial crimes, including those where tax evasion serves as a predicate offense. She further noted that the FIRS Act itself encourages collaboration between the FIRS and other government agencies, including the EFCC, in enforcing tax compliance. “This finding of the trial court is not supported by law and is therefore wrong,” Justice Aliyu stated, adding that the EFCC’s appeal was “meritorious and is allowed.” With this ruling, the Court of Appeal has set aside the previous judgment delivered on July 28, 2022, in its entirety. What This Means for Businesses This judgment reinforces the importance of tax compliance and demonstrates that the EFCC can—and will—play an active role in investigating and prosecuting tax-related offenses. At [Your Firm Name], we advise all businesses and professionals to ensure their tax matters are in full compliance with the law. If you have questions or need expert guidance on tax compliance, audits, or dispute resolution, our team is here to help. Contact us today to schedule a consultation. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

Don’t fall victim to business scams—verifying whether a company is legitimately registered with the Corporate Affairs Commission (CAC) is a vital first step before entering into any transaction in Nigeria. Fraudsters often pose as legitimate businesses, using fake names, false documentation, or even cloned websites to deceive unsuspecting individuals and organizations. Fortunately, checking a business’s registration status with the CAC is both simple and free. Here’s how to verify if a business or company is CAC-registered: As a tax consulting firm, we regularly assist clients in verifying business legitimacy, avoiding fraud, and ensuring that their partners are compliant with Nigerian laws. Protect yourself by taking these simple verification steps before doing business with any entity. Need help confirming a company’s CAC registration status or interpreting the results? Get in touch with our team today—we’re here to help you make informed, secure business decisions. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

Nigeria is entering a new era of tax reform, driven by the vision of Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service. At the recent Domestic Investors Summit in Abuja, Dr. Adedeji reaffirmed his commitment to building a stronger Nigeria through fair, simplified, and growth-oriented tax policies. According to him, “We all can build Nigeria through tax reform”—and that process is already underway. Under his leadership, the FIRS is transitioning into the Nigeria Revenue Service, a unified tax authority that will consolidate federal, state, and local tax collection. This transformation is designed to reduce the burden on businesses, close loopholes, and improve compliance. One of the most significant features of this reform is a shift in philosophy: taxing business profits instead of investments. This approach ensures entrepreneurs are not penalized at the early stages of building their businesses, encouraging innovation and long-term growth. Dr. Adedeji highlighted that the new tax regime will take effect on January 1, 2026, following the signing of four critical bills into law by President Bola Tinubu. These new laws include measures to simplify tax administration, improve fairness in revenue distribution, and eliminate redundant levies. A key component of the new framework is the introduction of a 4% National Development Levy to replace a range of nuisance taxes, alongside clear VAT exemptions on essentials like food, healthcare, education, and housing. To streamline operations, the government is establishing a single taxpayer database, a joint taxpayer committee to reduce multiple assessments, and a modern dispute resolution mechanism. These initiatives are aimed at building trust between taxpayers and authorities, improving service delivery, and making tax administration more efficient. Businesses will also benefit from VAT credits on capital equipment, reducing the cost of expansion by up to 8%. Dr. Adedeji praised the cooperation between the Presidential Committee on Fiscal Policy and Tax Reforms, the National Assembly, and the executive branch in achieving these reforms. He emphasized that political will and collaboration across all levels of government have made this transformation possible, and it is now up to citizens and businesses to take full advantage of the new framework. In recent months, the FIRS has also improved its internal operations. Standard Operating Procedures have been rolled out across regional offices to eliminate inconsistencies, while over 80% of services have been digitized through platforms like TaxProMax. The agency has also launched the National Single Window Project to integrate customs and tax systems, making trade and tax compliance more seamless. These reforms are not just about raising revenue—they are about building a system that supports economic growth, reduces inequality, and strengthens the social contract. For businesses, this means lower compliance costs, fewer bureaucratic hurdles, and a fairer environment for competition. For the country, it means reduced reliance on oil revenues and a more resilient, diversified economy. As tax professionals, we believe this is a turning point. Now is the time to align your business with the new regulatory environment. We’re here to help you navigate these changes, optimize your tax position, and stay compliant as Nigeria moves forward. Tax reform is not just a government initiative—it’s a shared responsibility. Together, we can build a more prosperous future for all. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Executive Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji, has sounded the alarm over Nigeria’s staggering annual loss of $18 billion to illicit financial flows (IFFs)—a challenge he described as a direct threat to national economic stability. Speaking at a national conference on Illicit Financial Flows organized by the FIRS in Abuja, Dr. Adedeji pointed to aggressive tax avoidance strategies by multinational corporations, often enabled by outdated tax treaties, as key drivers of the problem. “Like many resource-constrained nations, we lose billions—$18 billion annually—through illicit financial conduits,” he said. “This is more than a policy issue; it’s a national emergency.” To address the issue, the FIRS is actively reviewing and renegotiating Nigeria’s Double Taxation Agreements (DTAs) to close loopholes exploited for profit shifting and capital flight. “Several of our treaties have become outdated and are now being misused. I’ve personally initiated renegotiations with various jurisdictions to modernize these agreements and better protect Nigeria’s economic interests,” Dr. Adedeji added. As part of wider reform efforts, the FIRS has also established a Proceeds of Crime Management and Illicit Financial Flows Coordination Directorate. Backed by the Proceeds of Crime Act (2022), the unit is designed to work collaboratively with law enforcement, the judiciary, private sector actors, and global development partners. Adding to the discourse, Irene Ovonji-Odida—member of the Mbeki High-Level Panel on Illicit Financial Flows—revealed that African countries lost an estimated $407 billion to IFFs between 2001 and 2010, with Nigeria among the highest contributors in West Africa. She highlighted that: Ovonji-Odida cautioned that unless African nations tighten regulatory frameworks, the region will continue to suffer from chronic underdevelopment. Also speaking at the event, Minister of State for Finance, Dr. Doris Uzoka-Anite, emphasized that tackling IFFs requires coordinated action across all sectors of society. “This challenge goes beyond the FIRS. It requires a whole-of-government and whole-of-society approach,” she stated. She noted that the Ministry is implementing a comprehensive strategy anchored on three core pillars: The conference gathered top stakeholders from government, civil society, and international organizations—underscoring a collective commitment to curb financial crimes and strengthen Nigeria’s fiscal resilience. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Corporate Affairs Commission (CAC) has announced significant progress with its newly launched AI-powered Intelligent Companies Registration Portal (ICRP), which now manages over 11,000 company registration and compliance requests daily. This announcement came in response to user concerns regarding technical issues and service delays during the portal’s initial rollout. Despite these challenges, the CAC emphasized that the system is already streamlining formerly time-consuming processes. For instance, the ICRP recently processed 8,000 name reservation requests in a single day—a process that previously took up to two weeks under the manual system. Improved Efficiency and Enhanced Security Measures The CAC attributed the platform’s enhanced performance to newly introduced features such as One-Time Passcode (OTP) verification, which improves access security and curbs misuse by preventing unauthorized third-party access or the operation of multiple suspicious accounts. Designed with cost-effectiveness in mind, the portal ensures users only proceed to payment after successfully reserving a company name, thereby minimizing the risk of failed or unnecessary transactions. Customer Support and System Enhancements The commission also noted that the ICRP is equipped to handle over 3,000 customer support emails daily, with feedback from users actively being used to refine the platform’s functionality. While acknowledging the growing pains of digital transformation, the CAC reiterated its commitment to service excellence and continuous improvement. “We are not unmindful of complaints, but we are fully committed to delivering better quality services. The portal will soon perform optimally as a true champion of service excellence,” the CAC assured. Tackling Data Verification and Payment Challenges To address delays linked to user data verification, the CAC revealed that glitches from the National Identity Management Commission (NIMC) prompted the adoption of alternative technologies to verify user identities more reliably. The portal has also expanded payment gateway options and requested further integrations to facilitate real-time payments. A Leap Toward Compliance, Privacy, and Business Ease In alignment with the Data Protection Act 2023, the ICRP incorporates stricter access controls and enhanced data privacy protocols. According to the CAC, the portal is a “customer-centric innovation” designed to align with global best practices and bolster Nigeria’s ease of doing business rankings. As Nigeria’s corporate compliance environment evolves through AI and automation, businesses must stay ahead of regulatory changes. Our team of tax and business advisory experts can help you navigate company registrations, compliance filings, and the evolving digital landscape with confidence. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Federation Account Allocation Committee (FAAC) has announced the distribution of ₦1.82 trillion among the three tiers of government as allocation for June 2025, marking an increase of ₦170 billion compared to the ₦1.65 trillion shared in May. This was disclosed in a communiqué issued following FAAC’s July 2025 meeting, and signed by Bawa Mokwa, Director of Press at the Office of the Accountant-General of the Federation (OAGF). According to the communiqué, the ₦1.82 trillion distributable revenue comprised the following: Additionally, total gross revenue for the month stood at ₦4.23 trillion, with ₦162.79 billion deducted for collection costs and ₦2.25 trillion allocated to transfers, interventions, refunds, and savings. Breakdown of Distributable Revenue: Statutory Revenue (₦1.018 trillion): VAT Revenue (₦631.51 billion): EMTL (₦29.17 billion): Exchange Rate Gains (₦38.84 billion): Non-Mineral Augmentation (₦100 billion): Revenue Trends for June 2025: FAAC reported increased collections from Company Income Tax (CIT), Petroleum Profit Tax (PPT), and EMTL. However, there was a notable decline in revenue from oil and gas royalties, VAT, import duty, excise duty, and Common External Tariff (CET) levies. As Nigeria navigates evolving economic conditions, it is essential for businesses and individuals to stay informed about federal allocations and fiscal performance indicators. For tailored advice on how these developments may impact your tax planning or compliance obligations, contact our team of experts. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Federal Government’s decision to postpone an increase in the Value Added Tax (VAT) rate could lead to a revenue shortfall of up to 0.5% of Nigeria’s Gross Domestic Product (GDP), according to a new report by the International Monetary Fund (IMF). In its latest Article IV Consultation Report, the IMF acknowledged recent tax reforms endorsed by the National Assembly and approved by President Bola Tinubu, but highlighted that maintaining the current VAT rate amid economic strain comes at a fiscal cost. The IMF stated that while holding off on a VAT hike is understandable given widespread poverty and food insecurity, it is estimated to reduce consolidated government revenue by as much as half a percent of GDP. The report noted that although the Federal Government may partly offset this loss through improved Company Income Tax (CIT) compliance, subnational governments—who depend heavily on VAT allocations—could face tighter budgets. These states and local governments might have to cut back on public services or intensify efforts to boost internally generated revenue, which may result in increased tax pressure on small businesses. The decision to delay the VAT rate hike also reflects the slow progress in reaching vulnerable households. So far, only 5.5 million of the intended 15 million beneficiaries have been reached through the national cash transfer programme. The IMF cautioned that raising VAT at this point could worsen the financial burden on low-income Nigerians. Despite these concerns, the IMF praised the government’s broader fiscal reform agenda, led by the Presidential Committee on Fiscal Policy and Tax Reforms, as critical to improving Nigeria’s low revenue-to-GDP ratio. Key elements of the reforms include modernising VAT and CIT frameworks, reducing tax exemptions, and introducing digital tools to enhance compliance. These efforts helped increase Nigeria’s total revenue and grants from 9.8% of GDP in 2023 to 14.4% in 2024. However, public debt has also risen sharply, reaching 52.9% of GDP, with interest payments consuming over 41% of Federal Government revenue. To address fiscal sustainability, the IMF urged Nigerian authorities to present a clear, medium-term revenue strategy, complete with timelines for future reforms. This, the report stated, would provide businesses and investors with the certainty needed to plan and invest, while clarifying how much fiscal space is available for development and support for vulnerable groups. Echoing the IMF’s concerns, the Nigeria Economic Summit Group (NESG) also warned that avoiding a VAT rate increase could hamper government revenue. NESG CEO, Dr. Tayo Aduloju, stressed the need for a comprehensive and balanced tax reform approach that combines simplification with realistic rate adjustments. He noted that reducing the number of taxes alone, without improving VAT efficiency, could mean missing an opportunity to strengthen the nation’s revenue base. For small and medium enterprises (SMEs), the delay in raising VAT presents a mixed outcome. On one hand, it spares them from immediate cost increases and consumer backlash. On the other, the likelihood of stricter tax enforcement at the state level could grow, as governments seek alternative ways to plug revenue gaps. For Nigerian entrepreneurs, being tax-compliant and digitally visible to the authorities may soon become not just advisable, but essential. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.