Nigeria’s tax administration underwent one of its most significant shifts in recent history in 2025, as the government accelerated reforms aimed at boosting revenue, reducing leaks, and aligning the country’s tax system with global standards.
For many years, Nigeria has struggled with low tax-to-GDP ratios, heavy dependence on oil revenues, and widespread tax avoidance driven by weak enforcement and fragmented laws.
The year saw the consolidation of tax laws, restructuring of tax authorities, deeper use of digital compliance tools, and growing evidence that administrative reforms could translate into higher revenues. Together, these developments began to reshape how taxes are administered, enforced, and perceived in Nigeria.
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Below are five major events that defined Nigeria’s tax landscape in 2025.
Signing of the 2025 Nigerian tax reform bills…
After months of debate and stakeholder consultations, President Bola Tinubu, in June, signed four major tax reform bills into law, marking the most comprehensive overhaul of Nigeria’s tax framework in decades.
The laws include the Nigeria Tax Act (NTA), Nigeria Tax Administration Act (NTAA), Nigeria Revenue Service (Establishment) Act (NRSA), and the Joint Revenue Board (Establishment) Act (JRBA).
The new laws consolidated multiple, often overlapping tax statutes into a single, coordinated framework, while also redefining tax administration, dispute resolution, and intergovernmental coordination. Although full implementation was deferred to January 2026, the signing alone had immediate effects.
Businesses began reassessing investment plans, transaction structures, and capital allocation, while professional advisers adjusted tax planning strategies to align with the new regime.
Capital gains tax fears hit financial markets…
One of the earliest and most visible consequences of the new tax laws played out in Nigeria’s capital markets.
As clarity emerged around the revised capital gains tax (CGT) regime, with an increase from 10 percent to 30 percent, the stock market witnessed sell-offs that triggered sharp declines on the Nigerian Exchange (NGX), wiping trillions of naira off market value across several trading sessions.
The NGX All-Share Index recorded its steepest single-day fall in more than a decade on Tuesday, November 11, plunging by 7,454.60 points, or 5.01 percent, to close at 141,327.3 points, its lowest level since mid-September. Market capitalisation fell by about N4.64 trillion.
Analysts linked the downturn to profit-taking after weeks of strong gains and growing caution among institutional investors ahead of the new CGT regime. The episode highlighted how tax policy uncertainty, rather than weak fundamentals, became a key driver of market volatility.
The following day, Nigerian stocks recorded their biggest rally in almost two years after authorities softened a capital gains tax policy that had spooked foreign investors and triggered a market selloff. The 151-member NGX All-Share Index rose 2.9 percent at the close of trading in Lagos, its biggest advance since January 2024.
FIRS enters MoU with French tax authority ahead of NRS transition …
Throughout 2025, the Federal Inland Revenue Service (FIRS) intensified its efforts to enhance its institutional and technological capacity in preparation for its transition to the Nigeria Revenue Service (NRS) under the new tax laws.
A major milestone was the signing of a Memorandum of Understanding (MoU) with France’s Direction Générale des Finances Publiques (DGFiP), aimed at supporting Nigeria’s tax administration through technical assistance and capacity building. The partnership focuses on digital infrastructure, data analytics, and enforcement systems, was met with concerns that the MOU was a means for foreign interest to gain control over Nigeria’s sovereign tax data.
The tax authority clarified that the MoU is strictly non-financial and does not involve policy harmonisation or revenue sharing, but is designed to strengthen operational efficiency, intelligence-led audits, and cross-border cooperation. The move underscores Nigeria’s broader push to modernise tax administration and improve compliance under the new tax regime.
Rollout of electronic invoicing for large taxpayers…
Another major shift in Nigeria’s tax administration in 2025 was the rollout of mandatory electronic invoicing for large taxpayers under the Merchant Buyer Solution (MBS), the government’s flagship e-invoicing platform.
The system enables tax authorities to capture transaction data in near real time, particularly for value-added tax (VAT), significantly reducing under-reporting, invoice manipulation, and compliance gaps. By automating invoice issuance and reporting, MBS marks a decisive move away from manual filings toward digital, transaction-level oversight.
According to FIRS, major corporates such as MTN Nigeria, IHS Towers, and Huawei Nigeria were among the first to integrate with the platform. The rollout, which began as a pilot in late 2024, formally went live on August 1, 2025.
Under the current framework, companies with an annual turnover of N5 billion or more, estimated at approximately 5,000 large taxpayers nationwide, are required to adopt the platform. Within weeks of launch, roughly 1,000 firms, or 20 percent of eligible taxpayers, had commenced integration, according to official data.
Although initially limited to large taxpayers, policymakers view the MBS e-invoicing system as a test case for eventual expansion across other sectors and taxpayer categories, positioning digital invoicing as a central pillar of Nigeria’s tax modernisation drive.
Record tax revenue milestones…
By the second half of 2025, tax authorities began reporting record revenue collections, largely driven by better compliance, digital systems, and stronger enforcement rather than higher tax rates.
The Federal Inland Revenue Service (FIRS) said it collected N22.59 trillion in taxes between January and September 2025, the highest level ever recorded for that period.
The figures suggest that Nigeria’s revenue problem has been more about weak administration and low compliance than low tax rates. The stronger collections have also improved government finances and provided early support for the ongoing tax reforms.
Taken together, these events show that 2025 marked a shift from tax reform as policy intent to tax reform as lived reality. Tax decisions began influencing markets, compliance became more system-driven, and revenue outcomes started reflecting structural changes.
As Nigeria moves toward full implementation of the new tax regime in 2026, the developments of 2025 may be remembered as the year the country’s tax system began its transition from fragmented and reactive to modern, coordinated, and enforcement-led.
