Navigating Nigeria’s Tax Transition: Key Highlights of the General Transition Guidelines for the Nigeria Tax Acts 2025

The Federal Government has taken a significant step towards implementing Nigeria’s new tax framework with the release of the General Transition Guidelines for the Tax Acts 2025, issued on 18, June 2026, by the Honourable Minister of Finance and Coordinating Minister of the Economy. The Guidelines provide practical direction on how taxpayers, businesses and tax authorities should manage the transition from the repealed tax laws to the new tax regime, which took effect on 1, January 2026.

Designed to promote legal certainty and administrative consistency, the Guidelines clarify the treatment of tax obligations that span both the old and new legislative frameworks while minimizing disputes during implementation.

Prospective Application of the New Tax Laws

One of the most important principles established by the Guidelines is that the Tax Acts 2025 operate prospectively rather than retrospectively. Accordingly, any tax liability, penalty, interest, or compliance obligation arising before 1, January 2026 remains subject to the repealed tax legislation.

This means that transactions completed, income earned or taxable events occurring before the commencement date continue to be assessed under the previous legal framework, ensuring that taxpayers are not subjected to retrospective tax obligations.

Determining the Applicable Tax Law

The Guidelines clarify that the relevant accounting period, rather than the filing date, determines which tax law applies.

For businesses:

• Accounting periods ending before 1 January 2026 will continue to be assessed under the repealed tax laws, even if returns are submitted or taxes are paid during 2026.
• Accounting periods ending on or after 1 January 2026 will be governed by the Nigeria Tax Acts 2025.

This clarification is particularly important for companies with financial year-ends in late 2025 whose tax returns became due after the commencement of the new regime. Although tax filings are now processed through the Rev360 platform, the applicable law is determined by the relevant basis period.

Introduction of the Development Levy

The Guidelines also confirm the replacement of several sector-specific statutory levies with a consolidated Development Levy.

Consequently, for qualifying accounting periods commencing under the new regime:

• Tertiary Education Trust Fund (TETFund) levy;
• National Information Technology Development Agency (NITDA) levy; and
• National Agency for Science and Engineering Infrastructure (NASENI) levy
• Police Trust Fund Levy

will cease to apply.

Instead, companies meeting the prescribed thresholds—specifically those with an annual gross turnover of at least ₦100 million and fixed assets valued above ₦250 million—will become liable to the Development Levy under the new tax framework.

Treatment of VAT, Withholding Tax and Stamp Duties

For transaction-based taxes such as Value Added Tax (VAT), Withholding Tax (WHT), and Stamp Duties, the determining factor is the date on which the underlying transaction occurred.

Accordingly:

• Goods supplied or services rendered on or before 31 December 2025 remain subject to the repealed laws, irrespective of when payment is eventually received.
• Advance payments made before the commencement date also continue to be treated under the previous legislation, even where performance occurs later.

This approach provides clarity for businesses managing invoices and payments that straddle both tax regimes.

Long-Term Contracts and Ongoing Tax Disputes

Recognizing that many commercial arrangements extend beyond the commencement date, the Guidelines introduce an apportionment principle for long-term contracts.

Only the portion of a contract performed from 1 January 2026 onward will be subject to the Tax Acts 2025, while obligations relating to work completed before that date remain governed by the repealed legislation.

The same transitional approach applies to tax disputes. Appeals and proceedings initiated before 1 January 2026 will continue under the procedural rules of the former tax laws. Conversely, any new dispute commenced after the commencement date will be administered in accordance with the Nigeria Tax Administration Act 2025.

Continuity of Existing Tax Incentives

Businesses currently benefiting from tax incentives or exemptions granted under the repealed legislation will retain those benefits until their approved expiration dates.

However, any new applications or pending requests will be evaluated under the new legal framework, particularly the Economic Development Tax Incentive (EDTI) regime introduced by the Nigeria Tax Acts 2025.

Practical Considerations for Taxpayers

To ensure compliance during the transition, businesses should take proactive measures, including:

• determining whether their accounting period falls under the old or new tax regime;
• reviewing ongoing contracts to correctly allocate taxable income between both legislative frameworks;
• maintaining adequate records relating to pre-2026 transactions for statutory audit purposes; and
• obtaining professional tax advice where uncertainties arise.

Importantly, the Guidelines also provide that where genuine ambiguity exists in interpreting the transition provisions, such ambiguity should generally be resolved in favour of the taxpayer. This principle is intended to promote fairness and reduce unnecessary disputes during implementation.

Conclusion

The General Transition Guidelines play a critical role in facilitating Nigeria’s migration to the Tax Acts 2025 by establishing clear rules for taxpayers and tax administrators. Their emphasis on prospective application, preservation of accrued rights and practical transition mechanisms provides much-needed certainty for businesses navigating the new tax landscape.

As implementation progresses, taxpayers should carefully review their accounting periods, contractual arrangements and compliance obligations to ensure they meet the requirements of the new regime while preserving their rights under the repealed laws.

Our Opinion

Although the NRS Rev360 tax portal has been designed to apply the NTA 2025 for 2025 financial year company Income Tax Returns (2026 year of Assessment). There is a need for harmonization of communications rom NRS and he minister of finance as their guidelines seem to conflict with each other.

References

1. Federal Ministry of Finance. General Transition Guidelines for the Tax Acts 2025 (Issued 18 June 2026).
2. Nigeria Tax Administration Act, 2025.
3. Joint Revenue Board (JRB). Tax Acts 2025 Implementation Framework and Guidance Notes (where applicable).
4. Federal Republic of Nigeria Official Gazette. Tax Reform Acts, 2025.