Planning to Work or Hire in Nigeria? Here’s What the New 2025 Tax Law Means for You

July 29, 2025

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If Nigeria is on your radar this year whether you’re hiring, relocating, or expanding operations there’s a big update you need to know.

Nigeria just changed its tax laws.

Not just a little tweak. This is one of the biggest updates in years, and it affects expatriates, foreign employers, and global companies across industries.

But don’t worry. We’ve turned it into an easy, skimmable guide.

Let’s walk you through what changed, who it affects, and what you need to do without the stress.

First, What’s Actually New?

Here’s the short and simple version:

A new Nigeria Tax Act (NTA) combines several older tax laws
There is now a 4% Development Levy on company profits
Individuals, including expats, now get a ₦800,000 tax-free income allowance
The top personal income tax rate has increased slightly to 25%
Large companies are expected to meet a minimum 15% effective tax rate
Monthly tax filings are now digital and more consistent
Every employee and employer must have a Tax Identification Number (TIN)

For Expatriates in Nigeria: Here’s What to Know

If you’re working in Nigeria or planning to relocate, here’s how the new law might affect you.

1. You Might Pay Less Tax

If you earn ₦800,000 or less per year, you won’t pay personal income tax. This is especially good news for junior or mid-level roles, including expats.

2. Higher Incomes Will See Slightly More Deductions

The top tax rate is now 25 percent, up from 24. If you’re in a high-paying or executive role, expect a small increase in deductions.

3. You’ll Need a TIN

Whether you are employed directly or through an Employer of Record (EOR), you now need a Tax Identification Number. Your employer or EOR provider should help with this, but be sure it’s in place.

4. Staying More Than 183 Days? You’re a Tax Resident

If you spend 183 days or more in Nigeria within a year, you’re considered a tax resident. That means Nigeria may tax you on income earned outside the country. If you stay less than that, only your Nigerian income is affected.

5. Some Perks You Shouldn’t Miss

You can now claim up to ₦500,000 in rent relief
Severance or redundancy payments are tax-free up to ₦50 million
All tax filing is digital, which means less paperwork and more speed

For Global Companies and EORs: What You Should Know

If you’re hiring in Nigeria through an EOR or setting up your own entity, here’s what matters most.

1. Your Tax Rate Just Got an Extra 4 Percent

Companies still pay 30 percent corporate income tax. But now there’s a 4 percent Development Levy on top of that. While this replaces older levies, it does increase your overall tax cost slightly.

2. Large Groups Must Review Global Tax Structure

If your overall group tax rate falls below 15 percent, Nigeria may require a top-up tax. This affects multinationals and global companies. It’s worth a conversation with your finance or legal team.

3. Monthly Filing Is Now the Standard

Your team or EOR provider must now file VAT, PAYE, and other returns monthly and online. Make sure your systems are ready for this pace.

4. The Expatriate Employment Levy Is Suspended (For Now)

The proposed levy of ₦10,000 to ₦15,000 per expat was suspended in 2024. It’s not currently active, but it could return. Stay informed.

For Energy, Infrastructure, and Industrial Firms

If you’re in oil and gas, construction, or manufacturing, there are extra opportunities to reduce your tax burden.

1. Oil and Gas Projects Get Tax Credits

Projects that improve operational efficiency may qualify for a 20 percent tax credit. This is especially useful for upstream and deepwater operators.

2. Gas Infrastructure Investments Get a 25 Percent Tax Rebate

There is a strong incentive to invest in gas infrastructure. This rebate is designed to attract more projects in the sector.

3. You Can Recover More Input VAT

If you’re importing equipment or materials, you may now recover more of the VAT paid. Just make sure your documentation is in order.

Quick Checklist: What to Do Next

Here’s a short to-do list for staying compliant and avoiding surprises:

Make sure everyone including expats has a valid TIN
Adjust payroll systems to match the new income tax brackets
Review your group’s global tax structure if you’re a multinational
Confirm that monthly e-filing processes are in place
Look into sector-specific tax credits if applicable

Final Thoughts from Kaph Global

We know tax updates aren’t always exciting. But this one affects real people, real teams, and real goals.

At Kaph Global, we support global companies and professionals working in Nigeria. Whether you’re hiring through an EOR, bringing in expatriates, or handling your compliance strategy, we’re here to make it easier.