The Nigeria Tax Administration Act 2025: What to Expect from 26 January 2026

By P.L. Osakwe

When the National Assembly passed the Nigeria Tax Administration Act (NTAA) 2025 as part of the sweeping Tax Reform Acts, it was clear that the law was not designed for cosmetic change. Instead, it was meant to overhaul the way Nigeria collects, manages, and enforces taxes, from a scattered, manual-heavy system into a unified, digitally driven framework.
Unlike some of the other Acts in the 2025 tax reforms that came into effect immediately, the NTAA will commence on 26 January 2026. This deliberate delay is strategic, to give both the tax authorities and taxpayers a fair runway to prepare for the massive shift it brings.

1. Why the NTAA Matters

For decades, Nigeria’s tax administration has been spread across multiple laws, agencies, and manual processes. The NTAA consolidates and streamlines these rules, setting uniform procedures for tax assessment, filing, payment, enforcement, and dispute resolution.

The core philosophy is “one country, one tax administration system”, even though tax collection will still be shared between the federal, state, and local governments.

2. Key Features of the NTAA

Here are the headline changes Nigerians should expect from January 2026:

a. Centralisation under the Nigeria Revenue Service (NRS)

The NTAA legally backs the creation of the Nigeria Revenue Service, replacing the Federal Inland Revenue Service (FIRS). The NRS will coordinate federal taxes, support states on joint collection, and integrate data from multiple revenue agencies.

b. Digital-First Tax Administration

Mandatory e-filing of tax returns for companies above a set threshold.

Automated withholding and remittance for VAT, PAYE, and other indirect taxes.

Real-time verification of tax payments through integrated bank and fintech systems.

c. Standardised Enforcement Powers

Tax officers will operate under uniform rules for audits, penalties, and enforcement actions, reducing the confusion caused by conflicting laws.

d. Dispute Resolution Reform

A more accessible Tax Appeal Tribunal system is introduced, with faster timelines and digital hearing options to reduce the backlog of tax disputes.

e. Transparency and Accountability

The Act mandates annual public reports on tax collection performance, leakages, and compliance rates, a major step towards restoring taxpayer trust.

3. Why the Commencement is Delayed

The NTAA is complex. Starting it too soon could lead to chaos, especially given the digital infrastructure and training required. The 26 January 2026 start date allows:

Government to set up the NRS, integrate data systems, and train staff.

Businesses to adapt to new filing requirements and update accounting systems.

Banks and fintechs to implement payment integration and e-tax compliance tools.

States to align their tax collection processes for joint administration.

4. What Taxpayers Should Do Before 2026

If you are a business owner, professional, or even a regular salaried employee, the NTAA affects you. Here’s how to prepare:

Educate yourself on your rights and obligations under the new law.

Audit your records now, accurate bookkeeping will be critical in a digital audit environment.

Adopt accounting software that can integrate with e-tax systems.

Engage tax professionals early to avoid compliance mistakes once the Act takes effect.

5. Potential Impact

If implemented well, the NTAA could:

□ Increase Nigeria’s tax-to-GDP ratio without necessarily raising tax rates, simply by improving compliance.
■ Reduce opportunities for corruption by digitising payment and enforcement.
□ Boost investor confidence by making tax administration predictable and transparent.

However, its success will depend heavily on execution, especially the readiness of government infrastructure and the digital literacy of taxpayers.

Conclusion

The Nigeria Tax Administration Act 2025 is more than a new law, it’s a new mindset for Nigeria’s tax system. By 26 January 2026, the era of scattered, paper-heavy, opaque tax processes should give way to a more integrated, digital, and transparent framework.

The challenge is clear: preparation must be intentional. For government, this is a test of administrative capacity. For taxpayers, it’s an opportunity to align early and avoid penalties. If both sides get it right, this could mark the beginning of a fairer, more efficient tax system for Nigeria.