Nigeria’s tax act will start boosting FDI inflows, small businesses in 2026—IMPI

The Independent Media and Policy Initiative states that the Nigeria Tax Act 2025 will enhance the country’s foreign investment drive and create more employment opportunities for Nigerians. The chairman of the initiative, Omoniyi Akinsiju, stated this in a press release on Tuesday. Mr Akinsiju said the law, which would take effect from January 2026 following its implementation, had various provisions which would abolish double taxation and encourage businesses to expand their operations. He explained that the conclusion was reached after a cursory review of the NTA about its potential impact on all categories of Nigerian taxpayers. “With the implementation of the Nigerian tax laws starting in January 2026, foreign direct investment inflows into the country are expected to be reinvigorated.
“A major thrust in this regard is the adoption of the Minimum Effective Tax Rate (ETR) in the Nigerian Tax Act 2025 and other fiscal measures. The normal company income tax rate on a large company in Nigeria is 30 per cent of the company’s profit. But with the adoption of the ETR, Nigerian companies that are members of a multinational group with an aggregate group turnover of €750 million and above or have an annual turnover of over N50 billion will now be subject to 15 per cent of their net income,” he explained. According to him, the goal is to avoid the double taxation of dividends and unrealised gains or losses. Mr Akinsiju said this reduction in tax rates and clarity around double taxation for multinational companies would undoubtedly influence the flow of global capital to Nigeria.
“This is in addition to introducing the Economic Development Incentive (EDI), which replaces the pioneer tax holiday incentive. This incentive introduces a five per cent tax credit per annum for five years on qualifying capital expenditure purchased by eligible companies within five years, effective from the production date,” he added.
The IMPI chairman also said the tax exemption threshold for selling company shares in Nigerian companies increased from N100 million to N150 million in any 12 consecutive months, provided that the gains do not exceed N10 million. “Based on our evaluation, the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and Joint Revenue Board (Establishment) Act—meet all the fiscal conditions required for accelerated and inclusive economic growth.
“By our reckoning, these reforms, as reflected in the substance of the four tax acts, alongside the removal of fuel subsidies and the harmonisation of foreign exchange transaction windows, are at the heart of the coordinated effort to reset the Nigerian economy,” Mr Akinsiju said. NAN