1. Overview of the 2026 Tax Reform Objectives and Policy Direction
On June 26 2025, President Bola Ahmed Tinubu signed four tax bills into law. The reforms are designed to simplify compliance, reduce the tax burden on individuals and small businesses, harmonise revenue administration, and improve Nigeria’s tax-to-GDP ratio. This article highlights the opportunities created by the new tax laws for small and medium-sized enterprises (SMEs). It first explores the statutory classification of small and medium-sized companies and the incentives available to each category and subsequently provides practical guidance on how businesses can access these incentives while avoiding common compliance pitfalls.
2. Small and Mid-Sized Companies
For tax purposes, the Nigeria Tax Act (NTA) 2025 classifies companies into two categories: “small companies” and “any other company.” Under Section 202 of the NTA, a small company is defined as one which earns an annual gross turnover not exceeding ₦50 million and holds total fixed assets not exceeding ₦250 million. Professional service providers, including lawyers, accountants, and consultants, are excluded from the small company classification regardless of turnover. The NTA does not create a separate statutory classification for mid-sized companies. For the purposes of this article, a mid-sized company refers to a company that does not qualify as a small company under section 202 and is consequently treated as ‘any other company’ under section 56(b) of the NTA.
