Nigeria has begun a major overhaul of the regulatory environment governing civil society organisations as the new tax law (Nigeria Tax Act, 2025) tightens compliance requirements, strengthens transparency standards, and closes long standing loopholes previously exploited under the cover of non-profit status.
The new tax law was the crux of discussions at a civil society compliance training organised by Global Right in partnership with International IDEA, Accountability Lab and the West Africa Civil Society Institute, held in Abuja on Monday.
An official of the Nigeria Revenue Service (NRS), said the new framework was designed to promote ease of doing business while enforcing strict financial accountability across the sector.
Anas Abdullahi Gebi, Assistant-Director, Tax Policy and Advisory Department (NRS), said though CSOs were exempted from paying income tax, they were mandated to file annual returns to enable government monitor their operations and ensure transparency.
“The new tax law is about creating a transparent environment and encouraging ease of doing business. Even though CSOs are exempted from income tax, they must file their annual returns so government can properly monitor their activities,” Gebi said.
He said compliance levels were improving, adding that sustained engagement and training would further boost awareness and adherence to the law.
“Programmes like this show that CSOs are willing to comply. The more we engage them, the more enlightened they become, and the better they will understand their obligations,” he said.
Under Section 101 of the Nigeria Tax Administration Act, any organisation that fails to file its annual returns faces a penalty of N100,000 for the first month of default and N50,000 for every subsequent month until compliance.
Gebi explained that organisations choosing December 31 as their financial year end have six months, from January 1 to June 30, to compile their records and file their returns.
Noya Sedi, Programme Manager, Global Rights, said the compliance training became necessary following the introduction of the new tax law in January, noting that many CSOs were still grappling with grey areas in the legislation.
“The law is new and many organisations are still trying to understand how it affects them. There are grey areas, especially in how it applies to CSOs, which is why these engagements are important,” Sedi said.
She said while compliance among larger organisations is improving, smaller and grassroots CSOs still face capacity challenges.
“Some organisations start with good intentions but lose their way along the line because they do not fully understand the multiple laws guiding their operations. Compliance is a journey, and continuous engagement is critical,” she said.
Sharing her organisation’s experience, Grace Okpara, finance and admin manager, Accountability Lab, Nigeria, said the organisation had faced tax assessments from FIRS but successfully resolved the dispute through documentation and dialogue.
“It was a long journey. We had to engage FIRS, provide all our records, bank statements and documentation. Eventually, we reached a resolution. As organisations demanding accountability from government, we must also be accountable,” Okpara added.
Obari Dafiego, aAtorney, Goldstone Attorneys, said the new law had fundamentally altered how CSOs are viewed by tax authorities, shifting focus from non-profit status to actual business activities.
“The law has stripped CSOs of immunity based solely on non-profit status. What now matters is whether an organisation is engaging in business. If it is, it becomes liable to pay tax,” Dafiego said.
She said the new VAT framework had also improved clarity, allowing CSOs to claim refunds after payment, a process that was previously uncertain.
With stricter enforcement, clearer guidelines, and heavier penalties, analysts say the new tax regime could significantly reshape Nigeria’s civil society landscape, compelling organisations to adopt stronger governance systems, enhance transparency, and professionalise financial management.
