Automated Market Makers (AMMs) are a decentralizedDecentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal.
Click to read more → exchangeBusinesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies.
Click to read more → protocol that allows users to trade cryptocurrencies without needing traditional order books.   Instead of relying on buy and sell orders placed by users, AMMs use smart contracts and liquidityLiquidity indicates how easy it is to convert a cryptocurrency into cashCash is the most liquid form of money: physical coins and banknotes in the most narrow sense of the term.
Click to read more → quickly — and whether this can be achieved without the assetAssets are the resources that an organization can use to generate revenue or benefit.
Click to read more →’s value suffering.
Click to read more → pools to facilitate trades.   If the term “Virtual Automated Market Makers (vAMMs)” has emerged since my last update, it could refer to an evolution or extension of the AMM concept with additional virtual or programmable features.    These decentralized exchange protocols utilize liquidity pools and algorithms to enable users to trade digitalDigital technologies are these electronic tools that have the ability to generate, store or even process data.
Click to read more → assets directly from their wallets. Popular examples include Uniswap […]
Click to read more →In 2025, the Nigerian government passed a landmark set of tax laws aimed at overhauling the country’s tax system.

These reforms were designed to simplify tax laws, modernise tax administration, expand the tax base, improve compliance, and create a more business‑friendly environment.

Collectively, the reforms consist of four main legal instruments:

• Nigeria Tax Bill (Ease of Doing Business)
• Nigeria Tax Administration Bill
• Nigeria Revenue Service (Establishment) Bill
• Joint Revenue Board (Establishment) Bill

These were all signed into law by Bola Tinubu in June 2025 and are scheduled to come into effect from 1 January 2026.

Why the Reform Was Needed

Nigeria has had one of the lowest tax‑to‑GDP ratios globally (around 10‑11%), which limits government revenue and places heavy borrowing burdens on the state.

The tax system had become fragmented, with overlapping laws, multiple agencies, and complex compliance requirements.

Many businesses and individuals found tax compliance burdensome, unpredictable and inefficient.
The reform aims to:

• Consolidate tax laws into one document, reducing legal complexity.
• Replace the existing Federal Inland Revenue Service (FIRS) with a new entity, the Nigeria Revenue Service (NRS) under a clearer mandate.
• Harmonise tax administration between federal, state and local governments via the Joint Revenue Board.
• Update tax‑sharing formulas (especially for Value Added Tax) and other fiscal tools to incentivise productivity and broaden the tax base.

Key Features of the Reform Bill

Here are some of the major changes introduced:

ConsolidationConsolidation in trading is when a crypto asset trades between two levels, and the market shows indecisiveness about the next move.
Click to read more → of Tax Laws

The Nigeria Tax Act (formerly the Nigeria Tax Bill) repeals several existing tax statutes (e.g., Companies Income Tax Act, Personal Income Tax Act, CapitalCapital is most commonly defined as the large sum of money you would use to invest.
Click to read more → GainsGains refer to an increase in value or profit.
Click to read more → Tax Act, Value Added Tax Act) and combines them into a single framework.

This reduces duplication, ambiguities and conflicts among tax laws.

Creation of the Nigeria Revenue Service (NRS)

The new law replaces FIRS, establishing the NRS as a more autonomous, performance‑oriented body responsible not just for tax but also non‑tax revenues, with improved oversight and accountabilityAccountability is the requirement or readiness to assume responsibility for one's actions.
Click to read more →.

Joint Revenue Board and Tax Appeal Mechanisms

A formal structure is created to harmonise federal, state and local revenue‑sharing, reduce multiple taxation and streamline tax disputes via a Tax Appeal Tribunal and Tax Ombudsman.

Revised VAT Sharing Formula

The sharing of Value Added Tax (VAT) revenue is restructured: the Federal Government will take 10%, States 55%, and Local Governments 35%, with allocationAllocation is the allotment of equityEquity is the funds that would be returned to a company's shareholders if all of the company's assets were dissolved and all debts were paid off in the event of liquidation.
Click to read more → or tokens that may be earned, bought, or reserved for a specific team, group, investor, institution, or another similar entity.
Click to read more → based partly on consumption rather than origin.

This is intended to reward states with higher economic activity and consumption levels.

Exemptions and Incentives for Small Businesses

One key gain: businesses with annual turnover under ₦50 million may enjoy full exemption from Corporate Income Tax, making compliance simpler for micro‑enterprises.

Corporate Income Tax Rate Adjustments

The reform signals a reduction in the Corporate Income Tax (CIT) rate: for example, one report shows a drop from 30% to 27.5% in 2025, with intention to move to 25%.

Progressive Personal Income Tax Changes & Digital Reporting

The new laws aim to expand the tax base (including the informal digital economy), improve digital tax filing, and bring in a single Tax Identification Number (TIN) for individuals and companies.

Effective Date and Transition

Although signed in 2025, the reforms are slated to start from 1 January 2026 to allow time for transition, system implementation and stakeholder adjustment.

What It Means for You

For Individuals

• You may benefit from clearer and simpler tax laws; a single consolidated law reduces confusion.
• Digital tax reporting and a unified TIN make compliance easier.
• If you earn income via digital platforms, remote work or services, you’ll likely fall more clearly within the tax net.
• The VAT sharing and consumption‑based allocation may indirectly affect state revenue levels and local taxes.

For Businesses

• Small businesses (under ₦50 million turnover) have relief from CIT, reducing tax burden and encouraging formalisation.
• The consolidated law simplifies compliance, one main act instead of many.
• The NRS and harmonised administration may reduce multiple tax points and overlapping obligations.
• Businesses should prepare for tighter compliance, digital filings, and possibly new obligations if they expand.
• States that encourage consumption and economic activity may benefit from higher revenue under the new sharing formula.

Challenges and Considerations

• While simplification is promised, the transition may involve system upgrades, staff retraining, and changes in tax authority procedures.
• Some proposals faced resistance (e.g., increased VAT to 12.5% was initially proposed but retained at 7.5% for now).
• States with lower economic activity worry about reduced revenue if allocation shifts heavily toward consumption or productivity‑based sharing. Regional concerns remain.
• Compliance: Businesses and individuals will need to adapt to digital filing, single TIN, and possibly new auditAn audit is a process where developers inspect the underlying codeThe action of coding is to write programming statements for a program.
  Click to read more → and/or algorithmA process or set of rules to be followed in problem-solving or calculation operations, usually by a computer.
  Click to read more → that compose systems and applications.
  Click to read more → or enforcement regimes.
• Timing: Though reforms kick in 2026, some preparatory obligations may begin earlier; taxpayers should monitor regulatory updates.

Timeline Summary

• October 2024: President Tinubu submits the tax reform bills to the National Assembly.
• March 2025: House of Representatives passes the bills (with some changes).
• May 2025: Senate passes the bills.
• June 2025: President signs the four bills into law.
• 1 January 2026: The reforms take effect.

Conclusion

The new tax reform bill in Nigeria marks a major turning point for the country’s fiscal framework. It aims to modernise tax administration, simplify laws, expand the tax base, incentivise small businesses, enhance compliance and improve investor confidence.

For both individuals and businesses, the message is clear: prepare now. Check your tax status, ensure you’re registered, consider how the new laws may impact your tax obligations or opportunities, upgrade systems for digital compliance, and monitor state‑specific implications (especially under the new VAT sharing rules).

If implemented well, these reforms could enhance transparency, fairness and revenue‑mobilisation, enabling Nigeria to reduce dependency on oil, broaden its formal economy and lay a stronger foundation for future growth.