Nigerian years that straddle 1 January 2026
How a firm handles a Nigerian client's tax period that began before 1 January 2026, why Achekam refuses it, and how to compute and record it outside.
By Achekam · · 4 min read · For Accountants & audit firms in Nigeria
Nigeria's tax reform has a clean start date: 1 January 2026. Company accounting years rarely do. A client with a 30 June year end began its current year on 1 July 2025, half a year before the new Act commenced, and will close it half a year after. A 31 March company is in the same position, and so is every other company whose year does not begin on 1 January.
For those clients, the question is not only what the new law says but which law applies to which part of the year. This article explains the commencement rule, why Achekam refuses to compute these periods, how to work them outside the system, and what to tell clients about the following year.
When the Act commenced
The Nigeria Tax Act 2025 commenced on 1 January 2026. It repeals a long list of earlier laws, among them the Companies Income Tax Act, the Personal Income Tax Act, the Capital Gains Tax Act, the Petroleum Profits Tax Act, the Stamp Duties Act and the VAT Act.
From 1 January 2026, a small company pays 0% company income tax and every other company pays 30%, and companies other than small and non-resident companies pay a Development Levy of 4% of assessable profits.
The implementation has been uneven. Two official texts of the 2025 tax Acts exist, the version gazetted by FIRS and the National Assembly's own copy of January 2026, and some figures differ between them. That adds a second layer of uncertainty for the first years under the new law.
Periods before it stay under the repealed laws
Tax periods before 1 January 2026 stay under the repealed laws. For a period that falls entirely before that date, the answer is simple: the old law applies.
A straddling year is harder. Part of the year falls before commencement and part after, and the old and new regimes differ on rates, levies and reliefs. How a straddling basis period is treated is a question for the transition provisions and the NRS's guidance, and the firm should read both before computing anything. The NRS Information Circular No. 2026/01 explains how companies work out assessable and total profits, basis periods, capital allowances, losses and the 4% development levy under the Nigeria Tax Act, and is the place to start.
Achekam refuses periods that straddle the date
Achekam holds no Nigerian tax rule for periods before 1 January 2026 and refuses to compute those periods. Its company tax and levy rules resolve on the period's first day. A year that began on 1 July 2025 therefore resolves to a date for which Achekam holds no rule, and the whole period is refused.
That refusal is deliberate. Rather than apply new-law rules to a period that began under the old law, or guess at an apportionment, Achekam stops and leaves the computation to a person. It is better to know the system will not compute a straddling year than to discover later that it computed one wrongly.
Even for periods wholly after commencement, there is a further condition: as shipped, Achekam computes no Nigerian tax figure, because the tax rules ship awaiting approval by Achekam's platform administrators and firms cannot approve them.
| Client's year begins | Wholly under | In Achekam |
|---|---|---|
| Before 1 January 2026 and ends before it | The repealed laws | Refused |
| Before 1 January 2026 and ends after it | Straddles both | Refused |
| On or after 1 January 2026 | The Nigeria Tax Act 2025 | Computed once rules are approved |
Computing outside and recording
For each straddling client, compute the return in the firm's own workbook:
- Identify the client's basis period and the dates either side of commencement.
- Read the transition provisions and the NRS guidance, and decide how the period is to be treated.
- Record that decision, its reasons and the sources relied on in a file note.
- Compute the tax on that basis, with every figure traced to the accounts.
- Have the computation reviewed by a second person and approved by a partner.
- Agree the result with the client before filing.
Every Nigerian company, including a small one, must file an annual self-assessment return, due within 6 months after its year end for a company in business more than 18 months. The straddling year's return is due on the usual timetable, so the extra analysis has to fit inside it.
Keep the workbook, the file note and the client's approval in the client's folder in the Document Centre, the vault with a folder per client where staff keep versions and search. Filing happens outside Achekam in any case: a person files on Rev360 and uploads the portal's receipt for someone else to verify.
Telling clients what changes next year
The straddling year is a one-off. The client's next year begins after 1 January 2026 and falls wholly under the new Act. Use the straddling year's work to prepare the client for that:
- explain the new rate structure and whether the client is likely to be a small company;
- explain the Development Levy and whether it will apply;
- flag any contested figures that may affect the client;
- agree what records the new regime will need, so that the next return is straightforward.
The new-law computation itself is covered in Nigerian company income tax from 2026, and the contested figures in when Nigeria's two tax texts disagree.
A list to make now
List every Nigerian company client whose year began before 1 January 2026 and ends after it. Put each one's return due date beside it, decide who will compute it outside Achekam, and schedule the review early enough to leave time for the transition analysis.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
