INTRODUCTION
This article analyses the key provisions of the Nigeria Tax Act 2025 (the NTA or the new Act) relating to levies, tax incentives, and repeal/savings provisions.
1. One Levy to Replace Many: The 4% Development Levy
We can now say goodbye to multiple contributions. The new Act consolidates the Tertiary Education tax, Information Technology (IT), the National Agency for Science and Engineering Infrastructure (NASENI) and Policy Trust Fund (PTF) levies, etc, into one 4% Development Levy on assessable profits.
Who pays:
- All companies except small companies, non-resident companies without a Nigerian presence, and companies paying hydrocarbon tax.
- Individuals are exempted.
2. Stamp Duties Go Digital (and Stricter)
The regime on stamp duties has now fully transitioned into the digital era. The new Finance Act reinforces the Federal Inland Revenue Service’s (FIRS) mandate to implement electronic tagging, e-receipts, and the administration of stamp duties on electronic transactions. Key provisions under the current Act include:
- Duties to be Stamped: Any instrument first executed in Nigeria, or relating to property or matters in Nigeria, even if executed abroad, is chargeable to duty, unless exempted. The charge is typically ad valorem (percentage of value) for instruments that transfer an interest or involve a payment, and flat or nominal for others.
- Clarity of Stamp Timing: Every dutiable instrument executed in Nigeria must be stamped within 30 days of execution by the person required to pay the appropriate duty. The new Act, however, is silent on the treatment of instruments executed outside Nigeria but connected with an asset, matter, or activity in Nigeria. In the absence of express statutory guidance, it is a reasonable interpretation—subject to further regulations or clarifications from the relevant authorities—that the 30-day period would commence from the date such an instrument is received in Nigeria. The NTA clarifies that the duty is to be paid by the transferee, beneficiary, or person taking benefit under the instrument where the instrument involves a transaction.
