Nigeria’s 2025 tax law ties income-tax relief for qualifying charities, religious bodies and educational organizations to where profits or gains come from, leaving small revenue projects under a broad statutory test.
The Nigeria Tax Act, 2025 limits the exemption to an organization’s profits or gains from activities outside what the law calls “trade or business.” It identifies income-generating ventures as falling within that category but sets no express minimum threshold in its wording for a project’s size, revenue or duration. How officials will classify a particular small activity remains a matter of interpretation.
The law’s test has two parts: an organization must qualify as being of “public character,” and the profits or gains must meet the separate tax-exemption condition. Public character requires registration under Nigerian law and bars sharing profits with members or promoters. The Act took effect Jan. 1, 2026.
A Federal Inland Revenue Service circular dated April 11, 2022, addressed nonprofit tax treatment under earlier laws, including the Companies Income Tax Act and Value Added Tax Act. The 2025 law repealed several earlier tax statutes but preserves prior circulars only where they are consistent with its provisions. The circular’s precise application under the current law is not established by the cited provisions.
BusinessDay reported Sept. 2, 2026, that Kings Heritage Missionary operated a fish pond and garri-processing venture to help fund its work. The outlet said the organization cared for more than 100 children and supported seven university students. Its report did not say the Nigeria Revenue Service had assessed tax on the ventures. Gabriel Adeyemi, the organization’s director, told BusinessDay it sought ventures “aside from the donations gotten from people.”
The Federal Ministry of Finance said its June 18, 2026, transition guidelines covered tax exemptions and record-keeping, but its announcement did not set out a specific test for small nonprofit ventures. BusinessDay’s editorial board has argued that clearer rules could deter businesses from using nonprofit structures to avoid tax, while warning that complex compliance could burden small charities.
The Act authorizes the Nigeria Revenue Service, with the finance minister’s approval, to issue regulations to implement the law.
