The strong momentum of the first quarter of 2025 signalled the prospect of a dynamic and eventful year in Nigeria’s tax landscape. This trend has continued into the second quarter, hinting that 2025 may become the most significant year for Nigeria’s tax regime in recent times.
The second quarter saw landmark judicial decisions alongside significant legislative and administrative developments. Our Q2 newsletter spotlights these developments, delivering current insightful tax updates. We explore the long-awaited presidential assent of the tax reform Bills into law, the Federal High Court’s affirmation of the Tax Appeal Tribunal’s decision on the unconstitutionality of the Income Tax Country-by-Country Reporting Regulations 2018, and government policies such as Nigeria’s Double Taxation Agreement with Rwanda and the FIRS’ preparation to launch the e-invoicing system.
Our newsletter is divided into three segments: Part A deals with judicial pronouncements, Part B with legislative developments, and Part C highlights key government policies and administrative decisions.
Judicial pronouncements shaping Nigeria’s tax landscape
Two decisions stand out. In FIRS v Checkpoint Software Technologies B.V. Nigeria Ltd, the Federal High Court held that the Income Tax (Country-by-Country Reporting) Regulations 2018 are void.
The Court gave three reasons. First, the FIRS had no properly constituted Board when it made the Regulations, contrary to section 61 of the FIRS (Establishment) Act. Second, the penalties went beyond what the Act allows. Third, the legal basis, the OECD Multilateral Competent Authority Agreement, was never ratified by the National Assembly, so the Regulations breached section 12 of the Constitution.
In TSKJ Construcoes Internacional v FIRS, the Supreme Court settled the status of the Tax Appeal Tribunal. The Court held that the Tribunal is not a court under the Constitution. Instead, it is an administrative body with quasi-judicial functions.
That finding matters in practice. The Tribunal does not usurp the Federal High Court. A taxpayer must still pass through it first, as a condition precedent. As a specialised fact-finding body, it is not bound by the strict rules of evidence, so long as it observes fair hearing.
Legislative developments
The headline change is the Tax Reform Acts. President Tinubu signed four Acts into law on 26 June 2025. They take effect on 1 January 2026.
The Nigeria Tax Act consolidates the main tax statutes. It aligns capital gains tax with income tax, adds economic development tax incentives and cuts income tax for low earners. The Nigeria Tax Administration Act then sets one framework for assessment and collection, revises VAT revenue sharing and requires tax agents to be accredited.
Two Acts rebuild the institutions. The Nigeria Revenue Service (Establishment) Act replaces the FIRS with the Nigeria Revenue Service. In addition, the Joint Revenue Board of Nigeria (Establishment) Act replaces the Joint Tax Board and creates a Tax Ombud.
Government policies and administration
Several administrative moves followed. Nigeria and Rwanda signed a Double Taxation Agreement on 27 June 2025. Once ratified, it will make Rwanda the second African country with such a treaty with Nigeria.
The FIRS also pressed ahead on digital tax. It set 1 August 2025 as the mandatory start date for its national e-invoicing system for large taxpayers, with guidelines to follow.
Upstream oil and gas received a targeted incentive. The President signed the Upstream Petroleum Operations Cost Efficiency Incentives Order 2025, gazetted on 15 May 2025 and backdated to 30 April 2025. A company that beats NUPRC cost benchmarks can claim a tax credit of up to 50% of the incremental government revenue. That credit is capped at 20% of annual tax liability, and it runs for ten years.
Finally, the FIRS issued a revised Standard Operating Procedure, launched a Gender Desk and a Women’s Network, and started a tax advocacy podcast. Our analysis of the taxation of oil and gas companies under the new fiscal framework and our note on taxing non-resident companies under the Tax Reform Acts go deeper on the reforms.
Click the button above to read our full Q2 2025 tax newsletter on developments across Nigeria’s tax landscape.