Golfgators How the New Tax Reform Impacts You and Your Enterprise -Prof Oyedokun.pptx

Being a Webinar Paper Presented at a Session Organised by Golfgators on Saturday, October 25, 2025.

1. How the New Tax Reform Impacts You and Your Enterprise Being a Webinar Paper Presented at a Session Organised by Golfgators on Saturday, October 25, 2025. Prof. Godwin Emmanuel Oyedokun Professor of Accounting and Financial Development Department of Management & Accounting Faculty of Management and Social Sciences Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors)

2. ND (Fin), HND (Acct.), BSc. (Acct. Ed), BSc (Acct & Fin.), LLB., LLM, MBA (Acct. & Fin.), MSc. (Acct.), MSc. (Bus & Econs ), Ph.D. (Acct), Ph.D. (Fin), Ph.D. (Forensic Acct.), CFA, CFE, ACS, ACIS, ACIArb (UK), FBR, MNIM, FCA, FCTI, FCIB, FCNA, FCFIP, FCE, FERP, FFAR, FPD-CR, FNIOAIM, FCCrFA , FCCFI, FICA, FCECFI, FTPL, JP Prof. Godwin Emmanuel Oyedokun Professor of Accounting and Financial Development Department of Management & Accounting Faculty of Management and Social Sciences Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors)

3. How the New Tax Reform Impacts You and Your Enterprise

4. Contents

5. Introduction The Dawn of a New Tax Era in Nigeria June 26, 2025: four landmark Tax Reform Acts signed. A unified tax framework replaces outdated laws, effective January 1, 2026, aiming to broaden the tax base, modernize administration, increase revenue, and support sustainable growth. A focused to understand implications for personal and business taxes, and craft practical compliance and planning steps

6. Four Pillars of the Reform Nigeria Tax Act (NTA) Consolidates PIT, CIT, VAT, CGT, stamp duties; expands digital, non-resident and CFC rules. Nigeria Tax Administration Act (NTAA) Streamlines compliance, e-filing, dispute resolution, audits and transparency standards. Nigeria Revenue Service(Establishment Act (NRSA) Creates a new federal tax authority with clarified roles, autonomy and accountability. Joint Revenue Service(Establishment Act (JRBA) Harmonizes federal, state and local revenue roles to reduce duplication and improve collection.

7. Personal Income Tax Overhaul —Individual New Bands & Rates Tax-exempt up to ₦800K; top marginal rate increased to 25% — affects middle and high earners. Capital Gains CGT merged into personal income tax rates (up to 25%). Plan for higher taxes on disposals. Residency Rules Sharper residency tests: residents taxed on worldwide income; non-residents on Nigeria-source only. Allowances Rent allowance replaces CRA — employers and employees must retain proof of rent payments.

8. Corporate Tax Changes : Businesses Small Company Relief Small companies ( ≤₦ 50M turnover & ≤₦250M assets) may be exempt from CIT, CGT and Development Levy — confirm eligibility. Capital Gains for Companies Company CGT rate increased to 30% — impacts disposals, M&A pricing and exit strategies. Development Levy & VAT 4% Development Levy replaces multiple levies; VAT set at 7.5% with broader taxable supplies (digital services included). Minimum ETR Large companies face a 15% Minimum Effective Tax Rate with top-up taxes for shortfalls revisit tax planning.

9. Other Reform Areas — Digital, Compliance & Sector Measures Digital/Virtual Assets: explicit capture of crypto, NFTs and platform income — expect reporting guidelines and third-party data checks. Compliance Digitalization: e-registration, mandatory e-filing, automated audits, and enhanced data exchange across agencies. Sector Measures : targeted levies for banks (FX/windfall) and adjustments for oil & gas royalties — review sector-specific compliance.

10. Impacts for Individuals & Professionals Take-home Pay & PAYE New bands change net pay; employees should re-evaluate budgeting and employers must update payroll immediately. Worldwide Income Risk Remote workers and expatriates must check residency tests—foreign income may now be taxable in Nigeria. New Income Types Gig, platform and digital asset earnings now explicit—maintain records and issue invoices where applicable. Compliance Expectation Increased filing rigour and potential automated audits—keep digital records, receipts, and third-party confirmations.

11. Impacts for Entrepreneurs & Business Owners Review Company Classification Confirm whether you qualify as a small company to access exemptions; update turnover and asset reporting. ETR & Global Rules Multinationals must model top-up tax exposure; consider restructuring, pricing, and transfer pricing documentation. Digital Operations Ensure VAT compliance on digital sales, tighten e-invoicing and platform reporting to avoid penalties. Incentives Explore clarified incentives for digital exports, investment credits and performance-based reliefs—apply proactively.

12. Why This Matters — Business & Personal Consequences Cash Flow & Pricing: new levies and higher effective taxation may compress margins—review pricing and supply contracts. Payroll & Compliance: employers must update PAYE systems, communicate net-pay changes, and retain rent proofs. Investment & Exits: higher CGT exposure affects valuations, earnouts, and M&A structuring—model post-tax returns. Digital Revenue Risk: startups, freelancers and platforms must map taxable flows and collect proper documentation. Immediate action items: run quick tax-impact scenarios, update accounting rules, and communicate changes to staff/customers.

13. Practical Next Steps by Stakeholder — Action Checklist Employees Update payroll tables, request documentation for rent allowances, review benefits and pension tax treatment. SMEs Confirm TIN/registration, assess small-company thresholds, revise VAT invoicing and pricing clauses in contracts. Tech & Freelancers Classify digital revenues, capture platform receipts, automate invoices and hold required records for audits. Investors & Banks Re-model valuations for higher CGT, provision for FX/windfall levies, update treasury and pricing strategies. Final recommendations: conduct a rapid tax-impact audit, engage advisors to interpret regulations when gazetted, invest in digital accounting, and communicate changes to stakeholders early.

14. Compliance Checklist: Immediate, Short-Term, and Mid-Term Planning A structured approach ensures readiness for the new regulatory requirements. Immediate (7–30 Days) Subscribe to FIRS and tax advisory updates. Obtain and confirm official law/gazette effective dates. Run a quick impact assessment (payroll/cash-flow scenarios). 30 Days Action Plan Update payroll systems; educate HR on PAYE changes. Revisit VAT invoicing templates; ensure VAT registration compliance. Verify TINs for all relevant directors and owners. 60–90 Days Action Plan Conduct formal tax health-check or external diagnostic. Amend contracts and pricing clauses to reflect new tax allocation. Review transfer-pricing documentation for global minimum tax provisions.

15. Best Practices for Seamless Tax Compliance Synchronize Identifiers Keep TINs, CAC (Corporate Affairs Commission), and tax registrations synchronized to avoid audit triggers. Frequent Reconciliation Move to monthly or quarterly reconciliations for VAT and PAYE to minimize year-end surprises. Embrace Digitalization Utilize electronic invoicing and maintain e-archives. New rules reward digital-ready taxpayers. Board-Level Oversight Allocate a director responsible for tax strategy and compliance to ensure executive accountability. SME Bookkeeping Centralize bookkeeping and adopt a simple cloud accounting tool for quick generation of statutory reports. These practices enhance transparency and significantly reduce exposure to penalties and complex audits.

16. Compliance Strategies for Businesses and Individuals Mandatory Requirements TIN Registration: Mandatory for all business transactions and tax filings. Digital Adoption: Implement digital invoicing and VAT fiscalisation systems early to avoid penalties. Comprehensive Digitization: All tax filings, payments, and reporting are moving to digital platforms. Dispute Resolution: The new Tax Ombud Office and upgraded Tax Appeal Tribunal improve the efficiency of resolving disputes. Maintain accurate records of capital expenditures to leverage the Economic Development Incentive (EDI) — offering a 5% annual tax credit on qualifying capital expenditure.

17. Sector Watch: Anticipating Industry-Specific Tax Changes The reforms introduce targeted obligations across various sectors, requiring tailored preparation. Tech & Digital Platforms Expect direct reporting, withholding obligations on platform payouts, and potential VAT on cross-border supplies. Banks & Finance Focus on windfall/FX levies, reporting on forex gains, and new documentation requirements for financial transactions. Oil & Gas / Extractives Royalty and petroleum profit tax changes necessitate renegotiating Joint Venture (JV) terms and careful budgeting for new tax liabilities. Trade & Manufacturing Watch closely for changes to input tax recovery mechanisms and any new industry reliefs or credits introduced by the government.

18. Sector-Specific Implications and Opportunities Digital Economy & ICT Firms must comply with new tax rules aligned with global standards, including obligations for Digital Service Providers (DSP). Financial Institutions Prepare for potential windfall tax proposals and updated withholding tax regulations, demanding rigorous financial modeling. Mining & Petroleum New royalty and investment incentives, alongside formalized tax structures, offer both challenges and opportunities for optimization. Free Zone Entities Export tax exemptions are retained until 2028, but expect new VAT and withholding tax rules on services rendered within the zones.

19. Leveraging Incentives & Managing Tax Costs The reforms introduce new ways to reduce tax burdens through strategic investment and compliance. Economic Development Incentive (EDI) Replaces Pioneer Status. Offers a 5% annual tax credit on qualifying capital expenditure (Capex) for up to 5 years. Zero-Rated VAT Expansion Expanded list includes food, books, and medical supplies, creating opportunities to optimize input VAT recovery. Stamp Duty Changes Fixed at ₦1,000 for agreements under ₦1 million; exemptions for employee contracts and goods sales contracts. CFC Rules & Foreign Profits Stricter Controlled Foreign Company (CFC) rules and taxation on undistributed foreign profits demand international restructuring reviews. Gaming & Lottery New taxation on lottery and gaming profits under the corporate tax regime—plan financial projections accordingly.

20. Practical Strategies to Minimize Risk Maximize Incentives and Credits Structure investments to capture early-adopter credits, industry-specific allowances, and any retained or reworked capped reliefs. Tax-Efficient Compensation Shift remuneration to tax-favored benefits (within legal limits) or approved pension contributions to optimize personal tax exposure. Timing of Transactions Strategically defer or accelerate asset disposals based on the effective date of capital gains changes to minimize liability. Document Everything Maintain impeccable digital-first records—invoices, contracts, and bank statements—to significantly reduce audit exposures under automated enforcement.

21. Real-World Impact: Case Examples & Adaptation Tips MSME Tax Exemption Small businesses with ₦40M turnover are now fully exempt from CIT and CGT, significantly easing cash flow and compliance burden. Multinational ETR Large multinationals must ensure a 15% minimum Effective Tax Rate (ETR) , or face a potential top-up tax. Entrepreneurial Contracts Review contracts for stamp duty implications and update accounting systems for mandated digital tax compliance. Digital Economy Players Mandatory VAT e-invoicing and compliance with an expanded tax base on digital services require immediate system changes. Engage tax professionals early to navigate transitional challenges and optimize tax planning under the new laws.

22. Conclusion & Recommendations for Success Nigeria’s 2025 tax reforms usher in a new era of transparency and modernization. Adaptation is key. 1 Verify the Final Law Always confirm the final text published in the National Gazette and FIRS circulars before making permanent structural changes. 2 Immediate System Updates Update payroll and accounting systems now to ensure instant compliance once effective dates are gazetted, avoiding operational backlog. 3 Quantify Impact Run a short tax impact audit to quantify cash-flow implications across PIT, VAT, CIT, and any special levies. 4 Strategic Consultation Engage a tax adviser for one-time restructuring where capital gains or cross-border rules could materially change outcomes. 5 Communicate Proactively Inform staff and customers about net pay and price changes to reduce confusion and manage expectations. 6 Risk Management The risk of non-compliance is higher due to more stringent digital filing and record-keeping. Early preparation will pay off.

23. Take Away Proactive compliance and strategic use of incentives can turn challenges into competitive advantages in Nigeria's evolving fiscal landscape. For Professionals (Employees, Consultants) Update assumptions on personal tax for next year. Examine non-salary incomes and residency rules. Communicate changes with employer or financial advisor. For Entrepreneurs & Business Owners Revisit business structure and tax planning (esp. cross-border/digital income). Update accounting/ERP/compliance systems. Consider changed thresholds for “small business”. Let’s prepare today to thrive in Nigeria’s evolving fiscal environment.

24. Prof. Godwin Emmanuel Oyedokun Professor of Accounting & Financial Development Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors) [email protected]; [email protected] [phone] & 2348055863944