Nigeria Tax Act, 2025: What You Need To Know About Stamp Duty, VAT, WHT, and Capital Gains Tax
Tax conversations can often feel overwhelming due to the number of rules, rates, and exemptions involved. The Nigeria Tax Act, 2025 was introduced to simplify and harmonize Nigeria’s tax framework by consolidating several existing tax laws into a single, unified statute.
Below is a clear overview of the key provisions relating to Stamp Duty, Value Added Tax (VAT), Withholding Tax (WHT), and Capital Gains Tax (CGT), and what they mean for individuals and businesses.
Stamp Duty on Electronic Transfers
Under the Nigeria Tax Act, 2025, charges previously imposed as the Electronic Money Transfer Levy (EMTL) are now administered under the Stamp Duty framework.
Key points:
- A ₦50 stamp duty applies to electronic transfers of ₦10,000 and above (or foreign currency equivalent).
- Transfers below ₦10,000 are exempt.
- The sender of the funds is responsible for the stamp duty.
- Certain transactions, including salary payments and eligible intra-bank transfers, are exempt in line with applicable regulations.
- Banks, fintech companies, and other financial institutions act as collection agents, deducting and remitting the duty to the relevant tax authority.
Withholding Tax(WHT)
Withholding Tax under the Nigeria Tax Act, 2025 continues to operate as a tax deducted at source, serving as an advance payment toward the recipient’s final income tax liability.
Key highlights:
- Financial institutions are required to deduct Withholding Tax on interest income earned on savings accounts, fixed deposits, and qualifying investment instruments.
- Interest on short-term investment securities such as treasury bills, corporate bonds, and promissory notes is subject to WHT at the applicable rate.
- WHT also applies to dividends, rent, royalties, and similar income streams, with rates varying depending on the nature of the income and whether the recipient is an individual or a company.
- Certain investment income, including interest on Federal Government of Nigeria (FGN) securities, may be exempt, subject to the conditions set out in the Act and accompanying regulations.
- Small companies may qualify for reliefs or exemptions based on turnover thresholds provided under the law.
Value Added Tax (VAT)
VAT remains chargeable at a rate of 7.5% on the supply of taxable goods and services that are consumed, used, or enjoyed in Nigeria.
What has been clarified under the Act:
- VAT applies to digital and electronic services, including those supplied by foreign companies to Nigerian customers, where consumption occurs in Nigeria.
- Businesses with annual turnover at or above the statutory threshold are required to: Register for VAT, Charge VAT on taxable supplies and File VAT returns monthly
- VAT may be embedded in the final price paid by consumers, even where it is not separately itemised on receipts.
Exempt and zero-rated items include (subject to schedules under the Act):
- Basic food items
- Medical and pharmaceutical products
- Educational materials and tuition fees
- Residential rent and public transportation
- Selected baby and sanitary products
- Eligible small businesses below the VAT registration threshold
Capital Gains Tax (CGT)
The Nigeria Tax Act, 2025 expands and modernizes the scope of Capital Gains Tax.
Key provisions:
- Gains arising from the disposal of chargeable assets including land, buildings, shares, securities, and digital assets are taxable.
- For individuals, capital gains are integrated into the Personal Income Tax framework and taxed at progressive rates, depending on total taxable income.
- Individuals whose total income falls within the tax-free threshold for the year will not be liable to tax on capital gains.
- For companies, chargeable gains are taxed in line with the applicable corporate income tax rate of 30%
Common reliefs and exemptions (subject to conditions):
- Sale of primary residence
- Low-value personal assets
- Certain disposals of Nigerian company shares that fall within statutory thresholds
- Reinvestment relief where proceeds are reinvested in qualifying assets within the prescribed period
- small companies with under ₦100 million turnover
The Nigeria Tax Act, 2025 introduces a clearer, more unified approach to taxation in Nigeria, with stronger compliance mechanisms and expanded coverage for modern economic activities such as digital services and virtual assets.
Understanding these provisions helps individuals and businesses make informed financial decisions and remain compliant under the evolving tax landscape.
NOW TO THE NEWS
Vale launches Savings Challenges with even more rewards
At Vale Finance, we are turning smart money moves into a fun, rewarding experience with our new saving challenges, designed to help customers save smartly while still enjoying life. The new challenges: First Million Challenge, Multi-Millionaire Challenge, Fund your Bae (Valentine’s edition), Back to School Challenge (3rd term), and NYSC savings challenge are designed to help our users save towards their goals.
These goal-based saving challenges offer an opportunity to put money aside for both long and short-term needs such as school fees, building wealth during service year, or even working towards saving that first million, while earning extra rewards.
The thrilling part is, participants stand the chance to earn up to 13% interest on their savings, plus an extra 5% bonus, making it not just a smart way to save but also a chance to earn more value for their money.
Vale encourages both new and existing users to take advantage of the opportunity to turn saving into an engaging and rewarding experience.
New tax law: Bank inflows not automatically taxed – Analyst
Economic analyst Kalu Aja has clarified that under Nigeria’s new tax law, money entering your bank account is not automatically taxed. What is taxable is income, not every inflow. He explained that the law targets earnings such as salaries, business profits, interest, digital earnings, and other gains especially for individuals and SMEs but does not tax the mere movement of money into an account.
Aja stressed that some inflows are not taxable because they are not income. These include gifts, inheritance, loans, and life insurance payouts. For example, money received as a loan or a gift should not be declared as income and should not attract tax. The key issue is being able to explain the source of funds when necessary.
The major change in the new tax regime is that filing your tax returns is now more important than ever. Previous automatic reliefs (like the 20% relief plus ₦200,000) have been removed, meaning taxpayers must now actively declare their income and claim their exemptions themselves. If you do not file, tax authorities may assume money coming into your account is income and assess tax on it.
Finally, Aja dismissed fears that the government can automatically deduct money from bank accounts. Tax authorities cannot do this without due process and a court order. Overall, the new law does not introduce new personal taxes, but it tightens compliance, making accurate self-reporting and proper filing the main protection for taxpayers.
Naira gains against dollar as FX market shows early 2026 stability
The naira recorded a modest but steady appreciation against the U.S. dollar in the second trading week of 2026, closing at ₦1,424.5/$, stronger than ₦1,431/$ the previous week.
Trading during the week showed limited volatility, signaling improving stability in the foreign exchange market. Compared to the same period in January 2025, when the naira traded around ₦1,544.5/$, the currency is still significantly stronger.
The appreciation was supported by relatively stable market conditions and a slight increase in Nigeria’s external reserves, which rose to $45.62 billion from $45.60 billion, according to the Central Bank of Nigeria (CBN). Although the increase was marginal, it helped reinforce market confidence and provided a buffer for the local currency.
Looking ahead, the CBN expressed optimism about the naira’s medium-term outlook, projecting external reserves could rise to about $51.04 billion in 2026, driven by improved oil earnings, planned sovereign bond issuances, and higher diaspora remittances. The apex bank also noted that expanding domestic refining capacity could reduce fuel imports and ease pressure on foreign exchange demand.
Analysts say a stronger and more stable naira helps curb imported inflation, boosts investor confidence, and supports overall economic stability. However, experts like CPPE CEO Muda Yusuf caution that sustaining these gains will depend on consistent policies, stronger export earnings, and continued FX market reforms.
Tinubu praises NGX’s N100 trillion milestone, calls on Nigerians to invest
President Bola Tinubu has praised corporate Nigeria, investors, and stakeholders for helping the Nigerian Exchange (NGX) surpass the historic N100 trillion market capitalization milestone, describing it as a sign of a “new economic reality.”
The NGX recorded a 51.19% return in 2025, outperforming 2024 and surpassing major global indices such as the S&P 500 and FTSE 100, reflecting strong investor confidence and robust performance across industrial, banking, and technology sectors.
The President attributed this success to his administration’s reforms, which have improved monetary stability, strengthened the naira, and helped reduce inflation from 34.8% in December 2024 to 14.45% in November 2025, with projections to fall below 10% by the end of 2026. He also highlighted that Nigeria’s foreign reserves have crossed $45 billion and the current account surplus is expected to rise, providing a buffer for the currency and supporting macroeconomic stability.
Beyond the capital market, Tinubu pointed to broader economic progress, including infrastructure development, improved healthcare, and increased support for education, as indicators of Nigeria’s turnaround. He urged citizens to actively participate in the economy, emphasizing that the N100 trillion milestone signals Nigeria’s productive and investment-ready economy, further reinforced by recent tax and fiscal reforms.
