Revisiting key points in tax laws

What is the Tax Appeal Tribunal?

It is a specialised body established to settle tax disputes arising from the administration (including assessment, payment and enforcement) of tax laws in Nigeria.

Can a taxpayer appeal a decision of the Tax Appeal Tribunal?

Yes. Appeals can be made to the Federal High Court on points of law within 30 days of the Tribunal’s decision.

Is a taxpayer required to make a mandatory deposit as a precondition for appeal to the Tribunal?

No. A taxpayer has the right to appeal a decision of the relevant tax authority to the Tax Appeal Tribunal once the established procedures for administrative resolution have been exhausted. There is no requirement for a mandatory deposit.

What is the treatment of dividends received by non-residents?

Dividends received by non-residents from Nigerian companies are subject only to withholding tax under the Nigeria Tax Administration Act 2025, with no further tax charged (Section 19).

Are there tax exemptions for charitable organisations?

Yes, income of religious, charitable, educational, and similar public institutions is exempt, provided it is not derived from a trade or business (Section 163).

What deductions are allowed for bad debts?

Bad or doubtful debts incurred in the course of trade are deductible, subject to certain conditions while recoveries are taxable (Section 20).

Are gifts subject to tax?

Gifts are generally not subject to tax, except where the asset is acquired by way of gift and disposed of for consideration (Section 54).

How is rental income taxed?

Rental income is included in taxable income and may be subject to deductions for repairs, interest, and other expenses

Is income earned outside Nigeria taxable?

Dividend received from investments in wholly export-oriented businesses; businesses; and dividend, interest, rent or royalty derived outside Nigeria and brought into Nigeria through approved channels are exempt from tax.

How does the Act address double taxation?

The Act provides for unilateral relief and recognition of double taxation agreements to avoid double taxation on foreign-sourced income (Sections 120-123).

What records must be maintained for tax purposes?

Taxable persons must maintain accurate records, including invoices, receipts, contracts, and financial statements, as required under the Nigeria Tax Administration Act 2025.

What is the ‘Development Levy’?

A four percent development levy on assessable profits of companies (excluding small and non-resident companies) which harmonises various earmarked taxes under the old law. Proceeds are allocated to funds such as Tertiary Education Trust Fund, Nigerian Education Loan, Cybersecurity Fund, etc (Section 59)

What VAT supplies are zero-rated?

Zero-rated supplies include basic food items, medical and pharmaceutical products, educational materials, agricultural equipments and exported goods and services (except oil and gas) (Sections 186 – 187)

What are the compliance requirements for partnerships?

Partnerships must register with the tax authorities and file returns. Partnerships are taxed separately on their share of profit (Sections 11, 15)

What is the penalty for non-compliance with partnership registration?

Failure to register partnership particulars may result in tax authorities assessing tax as it deems just and reasonable (Section 15)

Can losses be carried forward?

Yes, losses can be carried forward and deducted from future profits subject to certain conditions and limitations (e.g. Sections 27, 70, 97).

No new taxes on telecom, fuel, says FG

The Federal Government has dismissed reports that it has adopted or considering the introduction of new taxes on telecommunications services and petroleum products following recommendations by the International Monetary Fund report on Nigeria.

The government said the reports misrepresented the contents of the IMF report and did not reflect its policy direction, insisting that no new taxes were being planned on either the telecoms or the petroleum sectors.

In a statement by the Head of Information and Public Relations Unit of the Federal Ministry of Finance, EfeOvuakporie, the government stressed that recommendations contained in the IMF report were not binding on Nigeria and should not be interpreted as an official government policy.

“The government has dismissed reports suggesting that it has adopted or is considering new taxes on telecommunications services and petroleum products following the publication of the International Monetary Fund Article IV Consultation Report on Nigeria,” the statement said.

The clarification comes days after the IMF, in its Article IV report on Nigeria, recommended a range of revenue-enhancing measures as part of efforts to strengthen government revenue and improve fiscal sustainability.

The Federal Government, however, maintained that decisions on taxation could only be made through constitutional and legislative processes and would be guided by national priorities and prevailing economic realities.

What your taxes do

Benin-Asaba highway rehabilitation

The Benin-Asaba highway rehabilitation is a major infrastructure project aimed at improving connectivity between Edo and Delta states with other parts of the country. It was officially flagged off by President Bola Tinubu in March 2025.

Length: Approximately 125 kilometres.

Routes: Starts at Onitsha Head Bridge, extending through Asaba (including failed sections like Ezenei Junction), Alifekede (Ika South LGA, Delta-Edo boundary), and Benin.

Estimated cost: About N200bn, funded through a concession by the Benin-Asaba Expressway Concession Company Limited – Africa Plus Partners (Nigeria) Limited Consortium.

Contractor: Africa Plus Partners (Nigeria) Limited Consortium.

Dateline: 30 months – From March 2025 to September 2027.

Features: It’s a 10-lane carriageway (five lanes on each side) from King Square to the Benin bypass for smooth traffic flow.

Taxpayers, revenue agencies get implementation guidelines

The Federal Government has issued guidelines for the implementation of the Tax Act 2025, setting out the transition process from repealed tax laws to Nigeria’s new tax framework, which took effect from January 1.

The guidelines, released by the Federal Ministry of Finance, provide direction for taxpayers, tax practitioners, revenue authorities and other stakeholders on how to address various issues arising during the transition period.

This was contained in a statement by the finance.

The ministry said tax liabilities, assessments, audits, investigations, disputes and enforcement actions relating to periods before January 1, 2026, would be treated under the repealed tax laws.

“Tax returns relating to accounting periods ending before January 1, 2026, will be filed under the previous tax laws, while returns falling due from January 1, 2026, onward will be administered under the new tax framework,” the statement reads.

UPCOMING DEADLINE

June 30: NRS Companies Income Tax Deadline

For companies with a December 31st year-end, this is your final day to file your corporate tax and the new 4% Development Levy to avoid attracting a penalty.

July 1: The Big Shift. This is the mandatory ‘Go-Live’ date for all Medium Taxpayers (Turnover ₦50m – ₦1bn) to fully integrate their accounting software (like Sage or Zoho) with the NRS MBS Portal.

Q and A: Do taxpayers need to re-register or obtain new Tax Identification Number?

No. All existing taxpayer registrations, TINs, and records issued under FIRS remain valid and will migrate seamlessly to NRS systems.

Taxable Line: We are not proposing a tax increase. We are making a tax adjustment so that the wealthiest pay a little more, so we do not need to cut funding for education or health – Luiz Inácio Lula da Silva (President of Brazil, 2025)

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