A firm of chartered accountants, Stransact Chartered Accountants, in collaboration with Nigeria Revenue Service (NRS), yesterday held a seminar to enlighten corporate taxpayers and business owners on how to navigate the country’s new tax landscape.
Speakers at the a one-day seminar/workshop for corporate taxpayers and business owners, which held in Lagos, explored the 2025 Tax Reform Act, looking at key changes and implications. The seminar had as its theme: “Navigating Nigeria’s New Tax Landscape: Understanding the 2025 Tax Reform Acts and Mandatory E-Invoicing for Taxpayers.”
While the effective date of the Tax Laws is set for January 1, 2026, participants at the event said that seminar/workshop like that offered opportunity for participants to look at key changes and implications.
“The event opened my eyes to reliefs that come with the new tax laws, as HR manager, I have learnt of the rent relief, some on mortgages and I can sensitise my colleagues on them and they can earn more when the law comes into effect,” said a Human Resource specialist at Lekoil, Ifeanyi Ndukwe.
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Also at the event, three-session panelists discussed: Mandatory E-Invoicing: Understanding the FIRS Electronic Fiscal System (EFS) and Merchant Buyer Solution (FIRSMBS); 2025 Tax Reform Act: Navigating Compliance Challenges and Future Outlook; and Practical Aspects of E-Invoicing Compliance: Integration, Data, Requirements, and Transaction Models.
One of the panelists’ sessions, they noted that the 30 percent fund required by the new tax law to be deposited in a Nigerian bank escrow account is no additional cost for oil and gas companies, but to ensure the funds are kept.
“The extra cost is just a misconception in my own opinion, the new law is to ensure that 30 percent of the fund is kept with a Nigeria bank which can develop our country,” Gabriel Ogunjemilusi, former FIRS director.
He explained that the 30 per cent is from existing funds mostly kept in foreign escrow accounts by the companies.
Under the new tax law, decommissioning/abandonment costs are deductible only if at least 30 percent of the fund is deposited in escrow with an accredited Nigerian bank.
In the Petroleum Industry Act 2021, the establishment of a Decommissioning Fund was enacted.
Operators are obligated to establish a dedicated Decommissioning and Abandonment Fund with an independent financial institution. The purpose of this fund is to ensure that sufficient resources are available exclusively for decommissioning activities in Nigeria.
“It was assumed that they could take it offshore. So, all of them then that way the law is given making them make provision and take the money offshore and keep it in other countries’ banking sectors,” Ogunjemilusi said.
As Nigeria currently experiences a wave of divestments by international oil companies (IOCs), an increased attention is being directed towards the decommissioning of ageing infrastructure.
“The PIA already provided that it should be funded, but by insisting on Nigerian banks, you are able to trace if it’s actually been funded. And in practice, many Nigerian players who are now predominant are struggling to fund it,” Kehinde Kajesumo, deputy director, head treaties & international tax policy, FIRS said.
Kajesumo explained that the law is to ensure the security of the environment of oil production, and also to ensure that the money will be available when it is needed in the future.
Also, discussions on the rent relief of 20 percent of annual rent paid, subject to a maximum of N500,000 sparked questions on who gets it between married couples who pay rent together.
Kajesumo said that the FIRS will provide more clarity on the rent relief provision, including how it applies when couples jointly pay rent.
