A Telecommunications Media And Technology Centric Assessment Of Nigeria’s Tax Reform Framework

INTRODUCTION

The enactment of the Nigeria Tax Act 2025 (NTA), together with its companion statutes, the Nigeria Tax Administration Act (NTAA), the Nigeria Revenue Service (Establishment) Act (NRSEA), and the Joint Revenue Board (Establishment) Act (JRBEA), marks the most far-reaching overhaul of Nigeria’s fiscal framework in over three decades. Beyond consolidation, these reforms represent a deliberate pivot from analogue, fragmented tax administration to a digitally enabled, substance-based revenue system aligned with modern economic realities.

This article provides a structured, TMT-focused appraisal of the new tax architecture, examining institutional changes, company classification, sector-specific reliefs, digital asset taxation, VAT fiscalisation, incentive redesign, and emerging compliance risks. It is intended as a practical and strategic guide for telecom operators, technology companies, investors, and advisers navigating Nigeria’s digitised revenue framework.

INSTITUTIONAL RE-ENGINEERING: FROM FIRS TO THE NIGERIA REVENUE SERVICE

A cornerstone of the reforms is the replacement of the Federal Inland Revenue Service (FIRS) with the Nigeria Revenue Service (NRS). This change is not cosmetic. The NRSEA establishes the NRS¹ as a technologically empowered authority with exclusive responsibility for federal tax administration, supported by real-time data capture, electronic reporting, and automated enforcement tools.

For TMT stakeholders, the NRS becomes the single federal interface for compliance across Companies Income Tax (CIT), Value Added Tax (VAT), Capital Gains Tax (CGT), and digital economy levies. Its mandate expressly contemplates technology-driven administration, including:

• deployment of a National Single Window for tax reporting;
• VAT fiscalisation through mandatory electronic invoicing; and
• enhanced information-gathering and transaction monitoring powers.

This institutional redesign is complemented by the Joint Revenue Board (JRB)², established under the JRBEA to harmonise tax administration across federal, state, and local governments. Historically, TMT operators, particularly telecoms and digital platforms, have borne the brunt of multiple taxation and regulatory overlap at subnational levels. The JRB’s coordination mandate is therefore critical to reducing duplicative levies, informal enforcement, and compliance uncertainty.

The reforms also introduce two notable accountability mechanisms: the Tax Appeal Tribunal³, with specialised jurisdiction over complex tax disputes, including those involving digital assets, and the Office of the Tax Ombud⁴. The Ombud provides an accessible channel for resolving administrative grievances, offering particular value to startups and SMEs that lack the resources for protracted litigation.⁵ 

COMPANY RECLASSIFICATION AND THE NEW STARTUP FISCAL LANDSCAPE

The NTA 2025 fundamentally restructures the classification of companies for tax purposes. The previous tripartite distinction between small, medium, and large companies is replaced with a binary system: small companies and other companies.

• Under section 202 of the NTA, a company qualifies as a small company where:
• it has a gross turnover of ₦50 million or less per annum; and

total fixed assets do not exceed ₦250 million. Eligible small companies enjoy full exemption from Companies Income Tax and Capital Gains Tax.⁶ This relief is automatic, flowing directly from statutory thresholds rather than discretionary certification or sectoral labelling.

For the technology ecosystem, this change is material. Early-stage software developers, app builders, and regional SaaS providers benefit from improved liquidity at precisely the stage where reinvestment in product development, talent acquisition, and market expansion is most critical. Unlike the Nigerian Startup Act, which hinges on regulatory designation, the NTA’s approach democratises access to relief and reduces administrative friction.

However, the Act expressly excludes companies providing professional services from this exemption, even where financial thresholds are met.⁷ This carve-out has significant implications for tech-adjacent businesses such as cybersecurity consultancies, managed services providers, and bespoke software development firms operating on a fee-for-service model. For such entities, structural decisions around productisation (converting custom services into standardised software products), licensing, and revenue models may now carry direct tax consequences.⁸

TELECOMMUNICATIONS

For the telecommunications sector, the 2025 reforms deliver long-awaited relief alongside administrative simplification. Most notably, the 5% excise duty on telecom services, covering voice, SMS, and data services, has been abolished. The excise duty, first introduced under the Finance Act 2020 and subsequently suspended, was widely criticised as regressive and counterproductive to digital inclusion.

Its removal lowers the cost base for operators and consumers alike, supporting broadband penetration and data affordability, both of which are foundational to Nigeria’s digital inclusion ambitions.

Equally significant is the consolidation of multiple sectoral levies into a single 4% Development Levy⁹ on assessable profits. This levy replaces, among others:

• the NITDA Levy;
• the NASENI Levy; and
• the Tertiary Education Tax.

While the aggregate rate is broadly comparable to the combined historical burden, consolidation simplifies compliance and reporting. Operators now deal with a single levy, a single base, and a unified remittance framework.

Importantly, the NTA ring-fences portions of the Development Levy for sectoral development, including dedicated allocations to ICT advancement and cybersecurity. This ensures continuity of funding for digital infrastructure and skills, notwithstanding the unification of collection.

Footnotes

1. Section 3(1) of the Nigeria Revenue Service (Establishment) Act, 2025.

2. Section 3(1) of the Joint Revenue Board of Nigeria (Establishment) Act, 2025.

3. Section 23(1) of the Joint Revenue Board of Nigeria (Establishment) Act, 2025.

4. Section 36(1) of the Joint Revenue Board of Nigeria (Establishment) Act, 2025.

5. Section 41(1) of the Joint Revenue Board of Nigeria (Establishment) Act, 2025.

6. Section 56(a) of the Nigeria Tax Act, 2025.

7. Section 202 of the Nigeria Tax Act, 2025.

8. Section 56(6) of the Nigeria Tax Act, 2025. (This section defines "small companies" but excludes those engaged in "professional services" from the 0% tax incentive, creating a significant distinction for tech firms.)

9. Section 59 of the Nigeria Tax Act, 2025.

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