Nigeria is shaking up corporate tax rules with its 2025 Tax Act, targeting foreign companies accused of shifting profits overseas. The move aims to reclaim billions in lost revenue 💸 – and it’s got multinationals in tech, energy, and telecoms paying attention.
What’s Changing? 🧐
Royalty payments to parent companies abroad no longer count as tax-deductible expenses. Previously, firms could deduct up to 5% of earnings through brand licensing or IP fees. Tax consultant Akintunde Ogunsola explains: "This stopped fake deductions masking profit transfers".
Why Now? ⚖️
Authorities say loopholes let companies move ₦6.8 trillion ($16B) offshore last year alone. "Deductions must now prove real business value," says policy expert Solomon Arasah. The reforms align with global anti-tax-avoidance efforts led by the OECD.
Sector Impact 🔍
🛢️ Oil & gas firms: Higher compliance costs
📱 Tech giants: Revised licensing models
📡 Telecoms: Scrutiny on infrastructure fees
While investors watch closely, officials argue this levels the playing field for local businesses 🏗️. Will this boost Nigeria’s revenue? The 2026 budget projections suggest they’re betting on it.
