Nigeria’s tax landscape shifted dramatically in 2025. The new tax act introduced tiered VAT rates and progressive corporate income tax brackets. Your accounting software needs to adapt quickly.
Understanding Nigeria’s New Tax Structure
Nigeria Revenue Service implemented sweeping changes affecting how businesses calculate taxes. Standard VAT increased to 7.5%, but that’s just the beginning. Luxury goods now carry a 15% rate, whilst essential items remain exempt at 0%.
Corporate Income Tax follows a progressive model. Small enterprises with turnover below ₦25 million pay nothing. Medium-sized firms between ₦25-100 million face a 20% rate. Large corporations above ₦100 million are taxed at 30%.
Why This Matters for Your Business
Manual tax calculations invite errors. A single mistake in determining whether your client falls into the medium or large CIT (Corporate Income Tax) bracket costs money and damages trust. Multiplying this across hundreds of transactions monthly becomes unsustainable.
Traditional approaches store a single rate per country. Nigeria’s multi-tiered system breaks this model. You need dynamic rate selection based on transaction context; product category for VAT, annual turnover for CIT.
How Globatax API Solves Nigeria Tax Compliance
We’ve engineered our Africa tax rates API endpoint to handle Nigeria’s complexity seamlessly. Request the appropriate rate, receive the correct percentage. No spreadsheets. No manual updates when regulations change.
VAT Rate Queries
Fetch rates by category:
GET /v2/africa_sales_tax/NGA/vat
Returns all VAT categories with current rates:
{
"country": "Nigeria",
"country_code": "NGA",
"vat_rates": [
{
"category": "Standard",
"rate": 7.50,
"currency": "NGN"
},
{
"category": "Exempt",
"rate": 0.00,
"currency": "NGN"
},
{
"category": "Luxury",
"rate": 15.00,
"currency": "NGN"
}
]
}
Corporate Income Tax Queries
Determine the correct CIT bracket:
GET /v2/africa_sales_tax/NGA/cit
Returns all CIT brackets with thresholds:
{
"country": "Nigeria",
"country_code": "NGA",
"cit_rates": [
{
"category": "Small",
"rate": 0.00,
"threshold_min": 0.00,
"threshold_max": 25000000.00,
"currency": "NGN"
},
{
"category": "Medium",
"rate": 20.00,
"threshold_min": 25000000.01,
"threshold_max": 100000000.00,
"currency": "NGN"
},
{
"category": "Large",
"rate": 30.00,
"threshold_min": 100000000.01,
"threshold_max": null,
"currency": "NGN"
}
]
}
Real-World Application Scenarios
E-commerce Platform: Customer purchases luxury perfume in Lagos. Your system calls the VAT endpoint, identifies the luxury category, applies 15% automatically. Receipt generation happens in milliseconds.
Accounting Software: Client’s annual turnover hits ₦85 million. Your quarterly tax calculator queries the CIT endpoint, matches the amount against thresholds, applies the 20% medium-rate bracket. Year-end filings become straightforward.
Payroll System: Processing employee benefits subject to VAT. Standard rate applies for most services. Medical benefits fall under exempt. One API call returns both rates for accurate deduction calculations.
Beyond Nigeria - Pan-African Coverage
Nigeria represents our most sophisticated implementation, but the API covers all 54 African nations. Request rates for Kenya, South Africa, Ghana, Egypt; any market where you operate.
GET /v2/africa_sales_tax
Returns detailed tax data for every African country. Single integration. Continental reach.
Integration Takes Minutes
Standard REST API. JSON responses. No proprietary formats or complex authentication schemes. If your system can make HTTP requests, you’re ready.
Staying Current Without Manual Updates
Tax laws change. Rates adjust. Thresholds shift. Our system tracks these modifications across all African jurisdictions. Your integration receives updated rates automatically.
When Nigeria announces the next revision; and they will; you won’t scramble to update hardcoded values. The API reflects changes the moment they take effect.
Common Implementation Patterns
Transaction-Level Queries: Call the API at checkout or invoice generation. Real-time rate lookup ensures accuracy.
Periodic Caching: Fetch rates daily or weekly. Store locally for performance. Balance freshness against API call volume.
Webhook Notifications: Subscribe to rate change alerts. Update your cache proactively when regulations shift.
Practical Considerations for Developers
Error Handling: Tax systems demand reliability. Implement fallback logic. Cache the last known good rate. Log failures for investigation.
Testing: Use sandbox endpoints during development. Verify your logic handles all three VAT categories and CIT brackets correctly before production deployment.
Documentation: Keep transaction records showing which rate applied and when. Audit trails protect you during tax reviews.
Nigeria Tax Act Compliance Made Simple
Progressive tax structures shouldn’t require progressive complexity in your codebase. Query the endpoint. Receive the rate. Apply it. Focus your engineering resources on features that differentiate your product.
Accounting software serving Nigerian businesses needs accurate, up-to-date tax rates. E-commerce platforms operating in Lagos require instant VAT calculations. Payroll systems processing benefits demand correct categorisation.
Global Tax API reliably delivers this foundation; you build the innovation on top.
Getting Started
Visit Globatax’s API documentation for complete API reference and authentication details. Test endpoints are available immediately. Production access requires an API key; sign up takes two minutes.
Nigeria’s tax complexity becomes your competitive advantage when you automate it properly. Whilst competitors manually update spreadsheets, your system calculates correct rates automatically.
Tax compliance transforms from liability to capability.
