The Nigerian government has announced new changes to the country’s tax system. According to the newly approved Nigerian Tax Act, which will start in January 2026, big companies will continue to pay 30% corporate income tax. However, there’s some good news for small businesses.

Under the new law, businesses that make less than N25 million in a year will still not pay any corporate income tax. The government has kept this rule to support small businesses and help them grow.

The new law makes it clear: small companies will be taxed at 0%, while other companies will be taxed at 30%. This rule begins from the day the law takes effect.

Also, the government has introduced something called a “minimum effective tax.” This means that if a company ends up paying less than 15% tax after deductions, it must pay extra to reach 15%.

This rule applies to very large companies, especially those that are part of multinational groups or those that make N20 billion or more in a year.

Another major change in the new law is the removal of the 10% capital gains tax. The government has canceled the old Capital Gains Tax Act and joined capital gains with corporate income tax. This means companies will no longer pay a separate tax on profits made from selling assets.

This change is part of a bigger plan led by the tax reform committee, which is headed by Taiwo Oyedele. Back in June 2024, Oyedele mentioned that they were thinking of reducing the corporate tax rate from 30% to 25%. The aim is to make Nigeria more business-friendly and attract investors.

With these updates, the government hopes to make the tax system simpler and fairer for everyone.