The Nigeria Tax Act1 (NTA), 2025

• The Nigeria Tax Act consolidates various tax laws into one legislation, eliminating overlapping or ambiguous provisions. This simplification aims to enhance transparency, ease compliance, and modernize Nigeria’s tax administration system.

• The Act’s key objective is to streamline the tax structure by reducing the number of taxes to a single-digit figure, boosting revenue efficiency and reducing complexity in Nigeria’s fiscal landscape.

• A core focus of the reform is removing “nuisance taxes” that are costly to manage and regressively impact small businesses and the poor, shifting instead to broad-based, high-yielding, easy-to-administer taxes.

• The Act mandates use of Electronic Fiscal Systems (EFS) for VAT compliance, such as e-invoicing and automated reporting tools, to ensure efficient tax data collection and support real-time transparency in transactions.

• Input VAT recovery has been expanded to include VAT on services and fixed assets, provided they directly support taxable supplies—offering businesses broader claim eligibility and better alignment with global tax practices.

• Section 125 clarifies duty obligations by requiring transferees, service beneficiaries, or security holders to stamp and pay duties within 30 days, resolving prior ambiguity over responsibility in such transactions.

Source: KPMG

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