The Federal Ministry of Finance has released the General Transition Guidelines for the Tax Acts 2025, signed by the Honourable Minister Taiwo Oyedele.
The guidelines are clear on one critical point that many small companies have already gotten wrong.
Section 10.1.2(3) states explicitly:
“A small or medium-sized company shall be subject to the tax rates and rules under the repealed laws for basis periods ending before 1st January 2026.”
And the interpretation section defines it plainly — under the repealed law, a small company is one with annual turnover not exceeding ₦25 million. The new ₦100 million threshold only applies to accounting periods ending after 1st January 2026.
Here is what that means in practice.
XYZ Ltd. had revenue of ₦95 million and profit of ₦15 million (after deducting allowable expenses) for the year ended 31 December 2025. They saw the ₦100 million small company threshold updated on the NRS previous digital filing platform (Tax Pro-Max) and filed with zero CIT — confident they qualified for the exemption.
They don’t.
Their 2025 basis period ended before 1st January 2026. The repealed law’s ₦25 million threshold applies. At ₦95 million revenue, they are not a small company under that law. The NRS will raise a desk review and reassess them at 20% CIT for Medium companies on the ₦15 million profit — that’s a ₦3 million tax bill, plus potential penalties and interest on any other issues uncovered in the review.
The bitter part? The guidelines were released after many companies had already filed in good faith, guided partly by what the NRS’s own digital platform displayed.
Section 14(3) of the guidelines does offer one protection — where any provision of the Acts is inconsistent, the conflict shall be resolved in favour of the taxpayer. Whether that argument holds against a straightforward threshold dispute remains to be tested.
There is also one exit provision worth noting. Section 10.1.2(4) allows a taxpayer to file using the new Acts for a pre-commencement period — but only with written approval from the relevant tax authority. That’s not automatic, and it’s not guaranteed.
What should you do right now?
If your company had a 31 December 2025 year-end and you filed using the new ₦100 million threshold without NRS written approval, your filing is likely to be reassessed. You need to review your exposure before the NRS does it for you.
A voluntary amendment now is almost always cheaper than a desk review later.
SOURCE: Cruz Wise Consulting via facebook.
