Nigeria Tax Act corporate restructuring is now a practical concern for every company planning a share sale, merger or group reorganisation, because the Act changes the tax cost of each route. This article from The Law Suite examines what those changes mean for business sustainability.
Abstract: Nigeria Tax Act corporate restructuring
Tax is one of the key costs of doing business; it is therefore critical that the tax implications of any restructuring are known before it is undertaken. Tax rules strongly affect which restructuring route is cheapest, fastest and least risky. The Nigeria Tax Act 2025 changes several core tax rules in ways that directly alter the business and legal risk of restructuring. Companies must understand these changes to avoid unexpected tax bills, protect cash flow and keep restructuring plans aligned with long term sustainability goals.
This article examines the provisions that matter for Nigeria Tax Act corporate restructuring, explores how they change common restructuring choices and sets out practical steps companies should take to protect business sustainability and cash flow while remaining compliant.
Introduction to the tax reform
In a bid to streamline revenue administration, enhance compliance, strengthen intergovernmental coordination and reposition the tax system to support inclusive growth, President Bola Ahmed Tinubu, on 26 June 2025, signed into law four major tax reform bills, marking a significant change in Nigeria’s tax landscape. These laws are:
- Nigeria Tax Act, 2025. It repeals outdated laws and consolidates the Personal Income Tax Act, the Capital Gains Tax Act, the Value Added Tax Act, the Companies Income Tax Act and the Stamp Duties Act into a single unified framework.
- Nigeria Tax Administration Act, 2025. It establishes a single framework for assessing, collecting and accounting for taxes across all levels of government.
- Nigeria Revenue Service (Establishment) Act, 2025. It replaces the Federal Inland Revenue Service (FIRS) with the autonomous Nigeria Revenue Service (NRS), having broader powers.
- Joint Revenue Board (Establishment) Act, 2025. It establishes the Joint Revenue Board (JRB), the Tax Appeal Tribunal and the Office of the Tax Ombudsman.
This article focuses on Nigeria Tax Act corporate restructuring, that is, the provisions of the Nigeria Tax Act that affect how companies reorganise. Although enacted in June 2025, the Acts took effect on 1 January 2026.
Key provisions that affect Nigeria Tax Act corporate restructuring
The following are the key changes introduced by the Nigeria Tax Act (NTA) and their potential impact on Nigeria Tax Act corporate restructuring.
The NTA increases the Capital Gains Tax (CGT) rate for companies from 10% to 30%. This aligns the CGT rate with the Companies Income Tax rate and removes the tax arbitrage previously enjoyed in classifying receipts as chargeable gains rather than trading income. In restructuring, this increases the cost of share swaps, disposals and spin offs, except where the transaction qualifies for relief as a reorganisation. For example, a company selling a subsidiary as part of a reorganisation will now face a significantly higher tax burden on the gain. Further, chargeable assets under the NTA include all types of property, including shares, options, rights, debts, digital assets, intangible property and foreign currencies.
Section 57 of the NTA introduces a minimum effective tax rate (ETR) of 15% of the net income of a company. The NTA defines net income as the profit before tax as reported in the Audited Financial Statements (AFS), excluding franked investment income and unrealised gains and losses. The provision applies to companies with an aggregate turnover of ₦50 billion or more, and to companies that are members of a multinational enterprise (MNE) group with an aggregate turnover of atleast….Continue reading.
Authorship and review
Original work by Abdulazeez Karimat Opeyemi, Intern, as part of the TLS Virtual Internship Programme 2025. Supervised by Prince I. Nwafuru, Managing Partner. Reviewed and revised by Emeka Lawrence Okwuokie, Associate.
