From banks to manufacturers and tech startups, the winners of Nigeria’s sweeping tax laws will be those nimble enough to adapt to stricter reporting standards and digitised compliance, while smaller firms lacking resources face higher risks and potential penalties.
The newly empowered Nigeria Revenue Service is set to tighten oversight, forcing a rethink of tax strategies across industries as the country seeks to boost revenues and cut through years of bureaucratic dysfunction.
The Nigerian government has overhauled how taxes are collected in Africa’s most populous nation, setting the stage for sweeping changes across industries.
While some sectors stand to benefit from streamlined rules and clearer oversight, others are bracing for heavier scrutiny and higher compliance costs.
Phase one of the long-awaited Nigerian tax reform journey is as good as done, according to Taiwo Oyedele, Chair of the Presidential Fiscal Policy & Tax Reforms Committee.
“The implementation phase will commence around Q3 2025,” Oyedele said after the president granted assent to the tax bills on June 26, 2025.
The 2025 Nigeria Tax Administration Act sounds like legal jargon. But behind it lies a major shakeup that will affect how businesses operate, plan, and survive.
For years, companies in Nigeria have had to deal with confusing rules, overlapping payments, and constant back-and-forth between state and federal tax offices. This new law tries to simplify all of that. It brings together old tax rules under one roof, gives more power to the new Nigeria Revenue Service (NRS), and promises better coordination.
But while the law aims to make tax collection smarter and fairer, not everyone will feel the benefit equally. Here’s how different sectors stand to gain or lose.
Financial services: Heavy on compliance, thin on margins
Banks, insurance companies, and other financial institutions already operate under layers of regulation. The new Act sharpens that further. It formalises real-time data exchange between the Nigeria Revenue Service (NRS) and regulators like the Central Bank and NAICOM. Mistakes that might once have gone unnoticed now risk penalties.
Automation, audit trails, and risk profiling are no longer optional; they are law. “It’s not the tax rate that’s the problem, it’s the price of getting it right,” says a compliance manager at a Tier-1 bank in Lagos.
Winners: Big banks with digitised internal processes and robust tax teams. Losers: Smaller financial institutions and bootstrapped fintechs struggling to keep up with enterprise-grade compliance.
Manufacturing: More predictability, but still a squeeze
For manufacturers, the reforms bring some long-sought order. The standardisation of remittance procedures and centralised oversight helps firms navigate fewer surprises. Input VAT clarity and export exemptions are especially welcome in sectors like agro-processing and cement.
But the emphasis on withholding taxes and real-time reporting introduces new stress, especially on capital-intensive operations with thin liquidity margins.
A food processing manager in Ogun State put it simply: “We welcome the structure, but the adjustment is painful.”
Notably, the Act provides relief for micro and small-scale manufacturers. Those with annual turnovers below a defined threshold benefit from exemptions from certain filing obligations and penalties, and they are eligible for simplified digital filing tools.
However, many still face an uphill climb in interpreting the new rules or investing in compliance systems even where the law offers relief.
Winners: Large-scale processors and exporters that now operate with clearer tax treatment.
Losers: Medium-sized manufacturers caught in transition, big enough to fall under full compliance, but not big enough to absorb the costs easily.
Tech Sector: From the shadows to centre stage
Nigeria’s tech startups, long floating in regulatory ambiguity, are now firmly on the tax radar. The Act mandates all digital service providers including foreign platforms to register and file taxes in Nigeria, regardless of where they are based.
This aligns with global trends in taxing the digital economy but poses a serious challenge to local startups and SaaS providers.
Beyond registration, firms must now keep audit-ready records, appoint fiscal representatives, and issue compliant e-invoices through the national platform.
Still, there’s a silver lining. Some provisions in the Act carve out simplified pathways for digital MSMEs, especially those below certain revenue thresholds. These include eased documentation requirements and grace periods for onboarding.
Winners: Multinationals and heavily funded startups that already operate in high-compliance markets. Losers: Small, lean firms that lack legal and compliance budgets even with exemptions, complexity remains a hurdle.
Oil & Gas: Status quo with a new audit trail
The extractive industry particularly upstream oil and gas is not a central focus of the 2025 Act. Sector-specific tax laws remain in place, but enhanced inter-agency data exchange will tighten oversight. The NRS is now empowered to cross-check company filings with data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and Customs.
The good news? Unified reporting reduces state-federal duplication. Multinational oil companies welcome electronic filing and central dispute handling, which replaces the fragmented system previously in place.
Winners: Integrated oil majors that can absorb scrutiny and value clarity. Losers: Smaller contractors who relied on lax enforcement.
A word on MSMEs: Not everyone is meant to struggle
It’s important to note that the 2025 Act doesn’t treat all firms equally nor does it intend to. The law makes room for Micro, Small, and Medium Enterprises (MSMEs), offering exemptions, simplified procedures, and extended deadlines based on turnover.
For example, firms under the minimum reporting threshold are not required to register immediately, and the NRS has been tasked with rolling out dedicated digital platforms tailored for small businesses.
But legal relief doesn’t always translate into practical ease. For many small firms, understanding the law and applying it is still difficult. A bakery owner in Ogun-state put it plainly: “They say we don’t need to file. But who explains what that means in real terms?”
The bottom line
The Nigeria Tax Administration Act 2025 is more than a bureaucratic facelift; it’s a signal of serious intent. The winners will be those who digitise fast, hire smart, and adapt early. The losers? Not just those who refuse to change but those without the resources to do so, even when the law tries to accommodate them.
Clarity may be welcome, but it also demands discipline. For many, surviving the test will come down to who adapts fastest.
