KEY LEGAL AND REGULATORY CHANGES AND DEVELOPMENTS EVERY COMPANY SHOULD PREPARE FOR IN 2026.

As we draw nearer to the close of 2025, Nigerian businesses stand at the threshold of one of the most significant regulatory transitions. A number of legislative reforms enacted in 2025 will take effect from 1^st January 2026, fundamentally reshaping the tax landscape, capital markets regulation, compliance expectations, and corporate governance standards. This newsletter builds on our previous updates and provides a consolidated, forward‑looking analysis of the key legal and regulatory developments companies must prepare for in 2026. Particularly, emphasis is placed on the Nigeria Tax Reform Acts 2025, the Investment and Securities Act 2025, and other material legal changes that will directly affect the daily operations, governance, financing, and compliance posture of companies doing business in Nigeria.

Our objective is not only to highlight what has changed thus far, but also to be proactive in outlining what companies should be doing presentlyto remain compliant and resilient in the year ahead.

Nigeria’s 2025 Tax Reform Act: 2026 Implementation

With an expected commencement date of 1^st January 2026, the Nigeria Tax Reform Acts represent the most significant change to Nigeria’s tax system in decades. Companies should now be focused on practical readiness to ensure a smooth transition. The areas in focus are as follows:

Key Reminders

1. Expanded tax net: Companies effectively managed or controlled from Nigeria may now be treated as Nigerian companies for tax purposes.
2. Higher effective tax burden: Capital Gains Tax for companies has increased to 30%, and a 4% Development Levy now applies to most medium and large-scale companies.
3. Minimum Effective Tax Rate (15%): Multinational groups and large domestic groups must reassess structures to avoid unexpected top‑up taxes.
4. Indirect share transfers: Offshore disposals of Nigerian assets are now taxable, impacting M&A and restructuring strategies.
5. VAT reforms: Input VAT recovery has been expanded, but mandatory e‑invoicing and fiscalisation will require system upgrades ahead of 2026.
6. Stricter enforcement: Increased penalties, enhanced reporting obligations, and better inter‑agency coordination signal a more aggressive compliance environment.
7. Personal Income Tax: The Act introduces revised Personal Income Tax rates ranging from 0% to 25%, with income up to ₦800,000exempt from tax. The progressive tax bands apply increasing rates of 15% to 23% as income rises, with income above ₦50 million taxed at 25%. This structure provides meaningful relief for low-income earners while ensuring that higher-income individuals contribute a proportionately greater share of tax.

Companies are advised to finalize impact assessments, update tax strategies, upgrade accounting and resource planning systems, and train finance and tax teams for the new compliance regime.

The Investment and Securities Act (ISA) 2025: What to Keep in View

The Investment and Securities Act has already been extensively discussed in prior updates. However, as the year 2026 approaches, companies should focus on the practical implications of the new regime:

1. Stronger SEC oversight: The SEC now wields broader supervisory and enforcement powers over public companies and market operators.
2. Digital assets are now securities: Virtual assets, cryptocurrencies, NFTs, and related investment products fall under SEC regulation.
3. Cashless capital market: Cash transactions are prohibited, reinforcing AML and transparency requirements.
4. Corporate actions under scrutiny: Mergers, takeovers, restructurings, and similar transactions require prior SEC approval.
5. Whistleblower protections: Companies must be mindful of enhanced protections and sanctions linked to victimization.

Beyond specific statutes, a few major trends are emerging across Nigeria’s regulatory landscape, such as:

• Technology-driven compliance: Regulators are increasingly relying on real-time data, electronic records, automated reporting, and digital payment infrastructure. In this context, the rollout of the National Payment Stack (NPS) by NIBSS is particularly significant. NPS replaces the NIBSS Instant Payment (NIP) system with a real-time, ISO 20022-compliant payment rail that enables end-to-end payment traceability, richer transaction data, and enhanced security through digital signatures and multi-layer authentication. In line with the Central Bank of Nigeria’s directive for full ISO 20022 adoption by 31^st October 2025, NPS strengthens transparency, supports regulatory oversight, and accelerates automation across banks and the fintech space.
• Greater transparency expectations: From tax filings to capital market activities, disclosure and traceability are no longer optional.

As companies prepare for the year 2026, key priorities include conducting comprehensive legal and tax impact assessments, upgrading systems to meet VAT and reporting requirements, reviewing group and cross-border structures under the new tax rules, strengthening governance and compliance frameworks, and engaging early with regulators and advisers to manage transition risks.

The reforms coming into force in the year 2026 are no longer theoretical. For companies, the conversation has moved from what the law says to how prepared the business truly is. While these changes introduce additional compliance burdens, they also present opportunities for well‑prepared companies to enhance credibility, attract investment, and achieve sustainable growth. Companies that have acted proactively in 2025 by aligning strategy, systems, and governance with the new legal directives will be best positioned to navigate the transition and thrive in the year 2026 and beyond.

We will continue to provide insights on the latest tax reforms and regulations in the year 2026 in order to proffer guidance in ensuring a productive and fulfilling 2026.