Ipakodo Grammar School
2025 Reunion · Special Session
Official record of discussions, reforms, and practical guidance shared during the alumni tax session.
The 2025 Tax Law & Compliance Session was a major educational highlight of the Ipakodo Grammar School 1998 Set Alumni Reunion. It focused on recent tax reforms, compliance expectations, and their real-world implications for individuals, employers, and businesses in Nigeria.
Featuring diverse perspectives from government officials, tax practitioners, banking experts, entrepreneurs, and legal professionals, the session included an engaging interactive Q&A segment that addressed attendees' specific concerns.
Speakers & Panel
Moderator
Onome Odukoya
Skillfully moderated discussions and facilitated engaging audience interaction throughout the session.
Speaker
Aregbe Idris
ACA · Tax Consultant
Delivered insights on tax compliance, recent reforms, and common pitfalls to avoid.
Government
Mrs. Kafilat Owokorodu
Manager, Lagos State Internal Revenue Service (LIRS)
Presented the official government update on tax reforms and policy direction.
Banking
Temitayo Adetola
FCA · Financial Expert
Shared practical compliance insights from the banking sector perspective.
Entrepreneur
Oladayo Kolawole
MBA · ACIB · CISI
Discussed the real-world impact of tax policies on business owners and entrepreneurs.
Legal
Femi Adisa-Isikalu
Managing Partner, Goldrush Partners
LLM (Hons), University of Lagos
Provided expert guidance on legal aspects and corporate tax compliance.
Event Highlights
Moments of connection, learning, and celebration from the 2025 reunion and tax session.
Top 20 Changes from the Nigeria Tax Reform Acts
Comprehensive summary based on PwC Nigeria's expert analysis of the reforms signed into law in June 2025 (effective primarily from January 2026).
- Increased exemption threshold for small companies — Small companies are now exempt from Companies Income Tax (CIT), Capital Gains Tax (CGT) and the newly introduced Development levy. Small companies are defined as companies with annual gross turnovers of ₦100million (previously ₦25million) and below and total fixed assets not exceeding ₦250million.
- Increased Capital Gains Tax (CGT) rate — The NTA increases the Capital Gains Tax rate from 10% to 30% for companies. For individuals, capital gains will be taxed at the applicable income tax rate based on the progressive tax band.
- CGT on Indirect transfer of shares — The NTA introduces CGT on indirect transfers of shares in Nigerian companies (subject to treaty exemptions). The tax exemption threshold for the sale of shares has been increased to ₦150million (from ₦100million) in any 12 consecutive months, provided gains do not exceed ₦10million.
- Introduction of Development Levy — Nigerian companies (except small companies) will pay a 4% Development Levy on assessable profits, consolidating TET, IT levy, NASENI levy, and PTF levy.
- Minimum Effective Tax Rate (ETR) — Large multinational or high-turnover companies (≥₦50billion) subject to 15% minimum ETR on Net Income, with top-up tax provisions.
- Controlled Foreign Company rules — Tax on undistributed profits of foreign companies controlled by Nigerian entities.
- Taxable profits of non-residents — Expanded scope including "force of attraction" rules and taxation of EPC contracts.
- Minimum Tax for Non-resident companies — Based on EBIT percentage or 4% of Nigeria-sourced income.
- Restriction on the tax exemption status of free zone entities — Gradual phase-out of full exemptions for sales to customs territory by 2028.
- Introduction of Economic Development Incentive — 5% tax credit per annum for 5 years on qualifying capital expenditure (replaces pioneer status).
- A more progressive Personal Income Tax (PIT) regime — Exemption for earnings ≤₦800,000; higher rates up to 25%; compensation exemption increased to ₦50million.
- Resident and Non-Resident Individuals defined — Clearer residence rules widening the tax net for worldwide income.
- Introduction of the Tax Ombuds office — Independent arbiter for tax-related complaints.
- Input VAT Recovery — Full input VAT claim allowed on all purchases related to taxable supplies (VAT rate remains 7.5%).
- VAT at zero rate on essential goods and services — Expanded zero-rated list allowing input VAT recovery.
- VAT fiscalisation rules — Mandatory e-invoicing and fiscalisation system.
- Update to the VAT sharing formula — Adjusted federal/state/local allocations with consumption-based distribution.
- Increased penalties for non-compliance — Significantly higher penalties and new ones introduced.
- Disclosure of tax planning arrangements — Mandatory notification of arrangements providing tax advantages.
- FIRS renamed the Nigeria Revenue Service and SIRS become autonomous — Renaming and autonomy for state revenue services, with joint audit provisions.
Key Highlights from Nigeria's New Tax Laws (Deloitte Nigeria Analysis)
Summary of major changes from the four landmark tax reform acts signed in 2025 (effective primarily from January 2026), based on Deloitte Nigeria's technical and industry insights.
- Increased threshold for small companies — Higher revenue threshold with added fixed asset criterion; medium-sized companies no longer recognized.
- Full VAT recoverability — Input VAT on all purchases (including services) now recoverable, potentially lowering net VAT but increasing corporate tax.
- New 4% Development Levy — Consolidates multiple existing levies (e.g., Tertiary Education Tax), reducing administrative burden.
- Progressive Personal Income Tax changes — Exemption for earnings below minimum wage; higher progressive rates for high earners (around ₦50m+).
- Revised minimum tax rules — 0.5% turnover minimum tax removed for loss-making companies; new 15% minimum ETR for large/high-revenue entities (e.g., ₦20bn+ threshold).
- GloBE/Pillar 2 alignment — Top-up tax for multinationals if group ETR below 15%.
- Higher Capital Gains Tax — CGT rate aligned with corporate income tax at 30% (from 10%).
- Enhanced technology deployment — VAT fiscalisation, mandatory e-invoicing, and National Single Window initiative.
- Stricter free zone incentives — Tighter conditions for export processing zone benefits on sales to customs territory.
- Overhauled stamp duties — Clearer guidance on dutiable instruments and responsible parties.
- Non-deductible expenses — Expenses/assets without VAT/import duty no longer allowable.
- Higher penalties — Stricter penalties and provisions to deter non-compliance.
- Upstream petroleum changes — Removal of 1% retention on qualifying capital expenditure for annual allowances.
- New Economic Development Incentive — Replaces Pioneer Status with a more robust tax credit framework.
- Tax Ombud & Tribunal — New independent Tax Ombud for mediation; reestablished Tax Appeal Tribunal for all taxes.
Frequently Asked Questions
Who is exempt from paying income tax?
Individuals (including Business Name owners) earning ₦800,000 or less annually are fully exempt from Personal Income Tax (PIT). Small companies (turnover ≤₦100 million and fixed assets ≤₦250 million) are exempt from CIT, CGT, and the Development Levy.
What is the new Development Levy?
A consolidated 4% levy on assessable profits for non-small Limited Liability Companies, replacing previous levies (Tertiary Education Tax, NASENI, IT Levy, Police Trust Fund, etc.).
Is a Taxpayer Identification Number (TIN) mandatory?
Yes. All individuals, Business Names, and companies must obtain and use a valid TIN for tax compliance, banking, and official transactions.
Are bank transfers, deposits, or account balances taxed?
No. Moving money between accounts, deposits, withdrawals, or holding balances is not taxable—only earned income and profits are subject to tax.
What are the new Personal Income Tax (PIT) rates?
Progressive bands (annual income):
• Up to ₦800,000: 0%
• Next portions: 15–21%
• Above ₦50 million: 25%.
Is severance or compensation for loss of employment taxable?
Exempt up to ₦50 million; any amount above is taxed under progressive PIT rates.
Are gains from cryptocurrency or digital assets taxable?
Yes. Profits from crypto, NFTs, and other digital assets are treated as income or capital gains and are taxable.
Is there relief for rent paid by individuals?
Yes—from 2026, individuals can claim 20% of annual rent paid as tax relief, capped at ₦500,000 (requires proof of payment).
Are pensions or retirement benefits taxable?
No. Approved pension contributions and retirement benefits remain fully tax-exempt.
Are salaries of military personnel taxable?
No. Salaries and certain disability pensions for armed forces members are exempt.
Can input VAT now be fully recovered?
Yes. Businesses can claim input VAT on all purchases (including services and fixed assets) directly related to taxable supplies.
What is the difference between an Enterprise (Business Name) and a Limited Liability Company?
A Business Name (enterprise/sole proprietorship) has no separate legal entity—the owner and business are one, with unlimited personal liability. A Limited Liability Company (Ltd) is a separate legal entity with limited shareholder liability (personal assets protected).
How are Enterprises (Business Names) taxed under the 2026 laws?
Profits are treated as the owner's personal income and taxed under progressive Personal Income Tax (PIT) rates: 0% on first ₦800,000, then 15–25% on higher bands. No separate corporate tax applies.
How are Limited Liability Companies taxed under the 2026 laws?
Taxed separately under Companies Income Tax (CIT) on profits. Small companies (turnover ≤₦100 million + fixed assets ≤₦250 million) often pay 0% CIT and are exempt from the Development Levy.
Which is better for small businesses: Business Name or Limited Company?
For very small operations (profit < ₦800,000): Business Name is simpler and effectively tax-free. For growing businesses: Limited Company offers liability protection, potential 0% CIT, easier access to funding, and greater credibility.
Can I convert my Business Name to a Limited Company?
Yes. Under CAMA 2020, you can re-register or upgrade to a Limited Liability Company as your business scales.
Is annual tax filing mandatory even if no tax is due?
Yes—all individuals and companies must file annual returns (even if exempt or nil liability) via the Nigeria Revenue Service (NRS) portal.
What is the deadline for companies to file annual tax returns?
Companies must file CIT and other annual returns by March 31 each year.
What is the deadline for individuals to file annual tax returns?
Individuals (including self-employed/Business Name owners) must file PIT returns by June 30 each year.
When are VAT returns due?
VAT-registered entities must file monthly returns and remit by the 21st day of the following month. E-invoicing is mandatory from 2026.
What are the deadlines for PAYE (employee tax) filings?
Employers remit PAYE monthly (varies by state, typically 10th–21st of next month) and file annual employee returns by January 31.
What happens if I miss a tax filing deadline?
Penalties include fixed charges, interest on unpaid tax, potential audits, and restrictions on obtaining Tax Clearance Certificates (needed for contracts, loans, etc.).
Download Session Summary
A concise PDF summary of the key highlights and insights shared during the 2025 alumni tax session.
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