Key takeaways
1. The NTA refers to the newly reformed legal framework aimed at strengthening tax administration, improving transparency, and increasing government revenue in Nigeria.
2. Youverify enables real-time Tax ID verification, helping businesses and individuals stay compliant with NTA regulations.
3. The 2026 reforms include the Personal Income Tax, Corporate Tax Reform Act, VAT Enhancement Act, and Digital Taxation and Compliance Act.
4. The Federal Inland Revenue Service (FIRS) is replaced by the NRS, consolidating federal tax collection and improving efficiency.
The Four Acts of Law in the Nigerian Tax Law.
The Four Acts of Law in the Nigerian tax law govern how taxes are imposed, administered, and collected across individuals and businesses. They are:
1. Companies Income Tax Act (CITA)
CITA is central to corporate tax compliance and revenue generation at the federal level, which governs the taxation of corporate entities in Nigeria.
The Companies Income Tax Act applies to foreign companies operating in Nigeria and limited liability companies. Their key focus is on the tax rate of each company's income, minimum tax rules, and filing compliance obligations.
2. Personal Income Tax Act (PITA)
The Personal Income Tax Act regulates the taxation of individuals and unincorporated entities. PITA applies to self-employed individuals, sole proprietors, and partnerships.
They focus on the PAYE system, tax bands, and allowable reliefs.
3. Value Added Tax Act (VATA)
The Value Added Tax Act provides the legal framework for taxing the consumption of goods and services in Nigeria. It applies to businesses that supply taxable goods or services as well as importers of taxable items.
The Act focuses on the VAT rate and scope, exempt and zero-rated supplies, VAT registration and filing obligations, and the treatment of input and output VAT.
4. Capital Gains Tax Act (CGTA)
The Capital Gains Tax Act regulates the taxation of gains arising from the disposal of chargeable assets. It applies to individuals, companies, trustees, and estates.
The Act focuses on the disposal of assets such as land, shares, and other chargeable assets, as well as applicable exemptions, rollover reliefs, and the determination of chargeable gains. CGTA ensures that profits earned from asset disposals contribute to government revenue.
What does NTA mean?
The Nigerian Tax Act law (NTA) refers to a set of newly reformed legal frameworks aimed at strengthening Nigeria’s tax administration, improving transparency, and enhancing government revenue.
The NTA is a set of rules that governs taxation and overhauls the county tax system to streamline compliance and improve the Nigerian tax administration.
The Nigerian Tax Act was signed into law in June 2025 by the president of Nigeria and will take effect on January 1, 2026. These laws will help eliminate conflict and uncertainty by providing a clear understanding of the tax law in the county and enhancing transparency.
In some instances, the NTA is often referred to as the Nigeria Tax Authority, and they are the administrative body responsible for managing and implementing tax regulations across the country. This helps prevent identity fraud, and taxpayers understand their rights and responsibilities embedded in the Nigerian Tax Act of 2026 fully.
What are the impacts of these laws on individuals and businesses?
The reforms of the NTA laws led to significant changes for individuals and businesses, designed to expand the tax net and improve the transparency of Nigeria’s tax system. These key provisions are
1. Nigeria Revenue Service (NRS):
The Federal Inland Revenue Service (FIRS) has been replaced and is now called the Nigeria Revenue Service (NRS). The NRS now serves as the sole agency in charge of collecting all federal taxes, preventing illegal activities, and making the process simpler and more efficient for citizens. This change streamlines revenue collection, consolidating responsibilities that were previously managed by multiple agencies, such as Customs, NUPRC, etc.
2. Vulnerable taxpayers:
This refers to individuals or groups earning an annual income of ₦800,000 or who may be at a financial disadvantage being exempted from personal income tax.
Under the Nigerian Act Law 2026, special considerations and reliefs are introduced to reduce the tax burden on these taxpayers, ensuring that low-income earners are protected while ensuring compliance with tax regulations.
3. Corporate Tax Changes:
Small businesses with an annual turnover of less than ₦100 million will be exempt from Companies Income Tax (CIT).
For medium and large companies, the corporate tax rate is set to drop from 30% to 25% starting in 2026. However, until the President officially approves this reduction, the current rate of 30% still applies.
4. New Development Levy:
Except for small businesses, most companies will now pay a 4% development levy on their assessable profits.
This new levy replaces several existing charges, including the Tertiary Education Tax and IT Levy, making the system simpler and more consolidated.
5. Value Added Tax (VAT) extensions:
Important goods and services, such as food items, medical services, pharmaceuticals, and school fees, are exempt from Value Added Tax (VAT), which stays at 7.5%. This ensures that everyday necessities remain affordable while maintaining fair tax regulations.
To benefit from these exemptions, businesses and individuals should ensure their tax ID is active and properly registered with the NTA.
Interesting read: What are the NTA laws for banks and fintech in 2026?
Frequently Asked Questions
Q1. What are the 4 new tax laws in Nigeria?
The four newly updated laws in the Nigerian Act Law 2026 are:
1. Personal Income Tax
2. Corporate Tax Reform Act
3. VAT Enhancement Act
4. Digital Taxation and Compliance Act
Q2. What is the minimum salary to pay tax in Nigeria?
Under the updated tax structure, individuals earning below the new tax-free threshold, usually between ₦30,000 and ₦50,000, depending on allowances, may be exempt from paying taxes. These reforms make tax regulation clearer and easier to follow, ensuring that low-income earners are protected.
Q3. What is the new tax deduction for 2026?
The Nigerian Act Law 2026 increases tax relief allowances while redefining chargeable income brackets to ensure fairer contributions and protection for low-income earners.
Achieve Tax ID verification with Youverify.
Understanding the Nigerian Act Law and the role of the NTA helps individuals and businesses remain compliant and avoid penalties.
Youverify’s solution offers access for real-time Tax ID verification and retrieval for both businesses and individuals. As regulations become more digitized, the need for accurate identity verification, automated compliance tools, and tax ID verification all in one workflow has become even more essential. To get started, book a free demo today.