PS Offshore Nigeria Ltd v. Miden Systems Nigeria Ltd & Chasewood Ltd: Insights into the Federal High Court’s Decision on the Recognition and Enforcement of Foreign Arbitral Awards in Admiralty Matters

Introduction

The enforcement of foreign arbitral awards in maritime disputes involving Nigerian interests came under judicial scrutiny in PS Offshore Nigeria Ltd v. Miden Systems Nigeria Ltd & Chasewood Ltd.[1] The decision of the Federal High Court raises significant questions about the interaction between arbitration clauses in maritime contracts and the constitutional and statutory framework governing admiralty jurisdiction in Nigeria. This article provides an analytical overview of the Court’s reasoning, the legal framework within which the decision was reached, and the practical implications for maritime operators and contracting parties. It does not seek to advance an argument as to whether Section 20 of the AJA indeed renders the underlying arbitration clause in a maritime contract a nullity by extension foreign arbitral awards. Rather, its objective is to offer clarity and insight into the Court’s approach, situating the judgment within existing jurisprudence and highlighting the commercial realities that flow from it.

Background

PS Offshore Nigeria Ltd, as award creditor in a charterparty dispute, applied to enforce an arbitral award rendered by a sole arbitrator under the auspices of the Singapore Chamber of Maritime Arbitration. It sought an order of the Federal High Court recognising the award and granting leave to enforce it against the award debtors, Miden Systems Nigeria Limited and Chasewood Limited.

The award debtors resisted the application, contending that the award was contrary to public policy and that it effectively excluded the Court’s jurisdiction, contrary to Section 251(g) of the Constitution of the Federal Republic of Nigeria (1999, as amended) and Sections 19 and 20 of the Admiralty Jurisdiction Act (AJA).

The principal question before the Court was whether a foreign arbitral award arising from a charterparty dispute could be recognised and enforced in Nigeria despite the provisions of Section 20 of the AJA. The Court held that Section 20 of the AJA, which invalidates agreements that purport to oust the Court’s jurisdiction, restricts the enforceability of foreign arbitral awards in maritime transactions connected with Nigeria. Accordingly, the Court found that because Section 20 of the AJA prohibits agreements that exclude the Court’s jurisdiction in admiralty matters relating to Nigeria, the arbitration agreement in question was null and void.

Legal Analysis of the Court’s Decision

A court can only assume jurisdiction over a matter where it has been expressly authorized to do so by statute. Under the Constitution, exclusive jurisdiction in respect of matters concerning shipping and navigation, inland waterways designated as international waterways, and Federal Ports is vested in the Federal High Court of Nigeria.[2] In conformity with the Constitution, the Admiralty Jurisdiction Act vests exclusive jurisdiction in the Federal High Court over all admiralty causes and matters, whether of a civil or criminal nature.[3]

Having established that the Federal High Court is vested with jurisdiction to hear and determine admiralty causes or matters, it is necessary to consider whether the subject matter of the dispute falls within the scope of an admiralty matter.

Under the Act, a maritime claim is broadly classified into two categories: a proprietary maritime claim and a general maritime claim. A proprietary maritime claim includes, but is not limited to, claims relating to possession of a ship; title to or ownership of a ship or any share therein; a mortgage of a ship or of a share in a ship; and claims for the enforcement or satisfaction of a judgment delivered by the Court or any other court (including a foreign court) against a ship or other property in an admiralty proceeding in rem.[4]

Conversely, a general maritime claim encompasses, among other things, claims for damage caused by a ship; claims arising from loss of life or personal injury; claims for loss of or damage to cargo carried by a ship; and claims arising from agreements relating to the carriage of goods or passengers by sea, or to the use or hire of a ship, whether under a charterparty or otherwise.[5]

The dispute between the parties, having arisen from a charterparty agreement, can properly be characterised as a general maritime claim.

In the case under review, the Federal High Court was tasked with determining whether such a maritime claim ought to have been commenced before it notwithstanding the existence of an arbitration clause in the underlying agreement, and, by extension, whether a foreign arbitral award could be recognised and enforced where the matter had not been instituted before the Court. In resolving this issue, the Court was required to interpret and pronounce on Section 20 of the Admiralty Jurisdiction Act.

Section 20 provides that any agreement by parties to a cause, matter, or action which seeks to oust the jurisdiction of the Court shall be null and void where it relates to an admiralty matter under the Act.[6]

In arriving at its decision, the Court placed primary reliance on the judgment of the Court of Appeal in Fugro Subsea LLC v. Petrolog Limited.[7]  In Fugro Subsea LLC v. Petrology Limited, the Court of Appeal declined to stay proceedings pending arbitration. In that case, the appellant, a foreign-owned company, entered into a BIMCO Charter Party agreement with the respondent, an indigenous Nigerian oil and gas company and owner of the vessel DSV VINNICE. The parties also executed a Memorandum of Agreement. Clauses 34 and 12 of the respective contracts provided that any disputes arising therefrom were to be referred to arbitration in London.

Following an alleged breach arising from non-payment of hire, the respondent commenced an action by writ of summons and filed an ex parte application seeking leave to serve the appellant outside jurisdiction, as well as a Mareva injunction against the appellant’s assets within jurisdiction. The appellant applied for a stay of proceedings in favour of arbitration, but the trial court refused the application on the ground that the arbitration clause was null and void pursuant to Section 20 of the Admiralty Jurisdiction Act (AJA). The appellant appealed.

The Court of Appeal dismissed the appeal and affirmed the decision of the trial court. One of the issues before the appellate court was whether the appellant had challenged the trial court’s findings that the contract was an admiralty contract and that the arbitration clauses (Clause 12 of the MOA and Clause 34 of the BIMCO Charter Party) were null and void for purporting to oust the Court’s jurisdiction in the face of constitutional and statutory provisions. Although the Court resolved this issue against the appellant, it nevertheless proceeded to consider the merits.

In doing so, the Court relied on the dictum of Oputa JSC in Sonnar (Nig.) Ltd & Anor v. Partenreedri M.S. Nordwind & Anor, where it was emphasised that courts should not be quick to divest themselves of jurisdiction conferred by the Constitution and other laws merely because parties have chosen a foreign forum in their private agreement. The Court reiterated that jurisdiction is jealously guarded and cannot be removed by private contract in favour of a foreign forum, except by clear and unequivocal statutory words. It further observed that a court can only give effect to the parties’ contractual intentions where there are no statutory limitations.

In the case under review, the Court consequently dismissed the action, holding that the arbitral award could not be enforced because Section 20 of the AJA rendered the underlying arbitration clause null and void. Since the arbitration agreement was a nullity, the foreign arbitral award founded upon it was likewise unenforceable.

The Court’s reasoning underscores a firm commitment to safeguarding the admiralty jurisdiction of the Federal High Court. Nonetheless, uncertainty remains as to whether the Court would adopt a different approach in respect of an arbitration clause that does not designate a foreign forum. To date, there appears to be no definitive pronouncement from the Supreme Court on whether an arbitration clause incorporating a foreign jurisdiction clause effectively ousts the admiralty jurisdiction of Nigerian courts.

Practical Recommendations for Maritime Operators and Contracting Parties

  1. Reconsider Foreign Arbitration Clauses in Nigeria-Connected Maritime Contracts: Avoid assuming that a London or Singapore arbitration clause will automatically be upheld and enforceable in Nigeria.
  2. Consider Nigerian-Seated Arbitration as a Safer Alternative: Consider arbitration seated in Nigeria under Nigerian arbitration law.
  3. Conduct Enforcement Planning at Contract Formation Stage: The key commercial question is not where you arbitrate but where you will enforce. If enforcement is likely to occur in Nigeria (e.g., assets located in Nigeria, vessels calling Nigerian ports), then evaluate whether counterparties have attachable assets outside Nigeria.
  4. Review Existing Contracts: Companies currently operating under foreign arbitration clauses involving Nigerian maritime performance should renegotiate dispute resolution clauses where commercially feasible.
  5. Monitor Supreme Court Developments: The interpretation of Section 20 AJA could evolve. Monitor pending appeal or future Supreme Court clarification.

Conclusion

Until clarified by the Supreme Court, companies should proceed on the assumption that a foreign arbitration clause in a Nigeria-connected maritime contract carries significant enforcement risk in Nigeria. The safest approach for companies involved in Nigerian maritime activities is to align dispute resolution clauses with Nigeria’s constitutional and statutory admiralty framework.

 

Author

Olamilekan Fayemi

Associate

Email: [email protected]

 

____________________

Adeola Oyinlade & Co. is a leading Nigerian law firm specializing in admiralty and commercial arbitration. Renowned for high-stakes litigation, the firm provides top-tier services in the recognition and enforcement of foreign arbitral awards in Nigeria. Leveraging deep local expertise, we ensure seamless asset recovery and legal compliance for global maritime and corporate entities. You may reach out to us for more information and enquiries via [email protected] or call +234 802 686 0247 / +234 803 826 7683.

[1] Suit No: FHC/L/CS/079/2019, unreported.

[2] Section 251 (1) (g) of the Constitution of the Federal Republic of Nigeria 1999 (as amended)

[3] Section 19 Admiralty Jurisdiction Act 1991

[4] Section 2(2) of Admiralty Jurisdiction Act 1991

[5] Section 2(3) of Admiralty Jurisdiction Act 1991

[6] Section 20 of Admiralty Jurisdiction Act 1991

[7] [2021] LPELR-53133(CA), 67 – 74, paras E – E.

IP Enforcement by Customs and NAFDAC: Protecting Intellectual Property Rights in Nigeria

  1. Introduction

The enforcement of intellectual property (IP) rights in Nigeria increasingly relies on administrative and regulatory mechanisms operating alongside traditional civil remedies. The scale and sophistication of counterfeit trade particularly in pharmaceuticals, cosmetics, food products, and fast-moving consumer goods have exposed limitations in purely litigation-driven enforcement strategies. As a result, agencies with regulatory and border control mandates have assumed practical importance in preventing infringement and protecting brand integrity.

The National Agency for Food and Drug Administration and Control (NAFDAC) and the Nigeria Customs Service (NCS) institutions occupy central roles within this enforcement landscape. Although their primary statutory mandates concern public health regulation and border administration respectively, their enforcement activities frequently intersect with trademark protection and anti-counterfeiting measures.

This article examines the legal foundations of their authority, the mechanisms through which they enforce against infringing goods, and their practical contribution to intellectual property protection within Nigeria’s regulatory environment.

 

  1. Legal authority of Intellectual Property Enforcement

Nigeria’s intellectual property framework is primarily rooted in statutory regimes of governing trademarks,[1] copyright,[2] and patents,[3] supported by civil remedies and criminal sanctions. However, enforcement challenges arise from the prevalence of cross-border trade, informal distribution networks, and the increasing sophistication of counterfeit operations. Rights holders often face practical difficulties pursuing litigation against unidentified infringers operating within fragmented supply chains.

Nigeria’s obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) reinforce the need for administrative enforcement mechanisms, particularly border measures enabling the interception of counterfeit goods prior to market entry.[4] Consequently, agencies empowered with inspection, seizure, and regulatory oversight functions have become essential actors in the broader IP enforcement architecture.

 

  1. NAFDAC and Intellectual Property Enforcement

3.1 Statutory obligation and Institutional Role

NAFDAC derives its authority from the National Agency for Food and Drug Administration and Control Act[5] and related legislation regulating pharmaceuticals, processed foods, cosmetics, medical devices, and chemicals. Its principal mandate is the protection of public health through ensuring the safety, quality, and efficacy of regulated products.[6]

Although intellectual property protection is not expressly stated as a primary objective, the agency’s statutory prohibition of counterfeit and unregistered products positions it as a key enforcement actor against trademark infringement within regulated sectors.[7] Counterfeit goods typically rely on imitation branding and misrepresentation of origin, thereby implicating proprietary rights alongside regulatory violations.

 

3.2 Enforcement Mechanisms

  1. Pre-Market Control through Product Registration

Mandatory product registration provides an initial enforcement filter. Applicants must disclose detailed information concerning product identity, labelling, and branding with the relevant intellectual property authority. This process indirectly supports trademark protection by preventing unauthorized products from obtaining regulatory approval where branding appears misleading or deceptive.

 

  1. Market Surveillance and Enforcement Operations

NAFDAC conducts surveillance operations across distribution chains, including inspections of warehouses, retail outlets, and open markets known for the circulation of counterfeit pharmaceuticals and consumer goods.[8] Enforcement actions frequently involve seizure of infringing products, closure of facilities, and administrative sanctions. Such interventions disrupt counterfeit distribution networks and reinforce regulatory compliance.

  1. Investigation and Criminal Enforcement

Under counterfeit drug legislation, NAFDAC may investigate and prosecute offenders. The availability of criminal sanctions distinguishes regulatory enforcement from private civil remedies and enhances deterrence against organized counterfeit operations.

 

3.3 Practical Impact on IP Protection

NAFDAC’s enforcement activities generate significant practical and indirect benefits for intellectual property rights holders, particularly within highly regulated sectors. These impacts include the following:

  • Systematic removal of counterfeit and falsified goods from domestic markets through seizures, product recalls, and destruction exercises.
  • Disruption of illegal distribution and supply chains, including unauthorized importers, parallel traders, and informal market networks that facilitate IP infringement.
  • Reduction in market access for infringing products, thereby restoring competitive balance in favour of legitimate rights holders.
  • Preservation of trademark distinctiveness, by preventing brand dilution caused by widespread circulation of look-alike or deceptively similar products.
  • Protection of brand reputation and goodwill, particularly where counterfeit products pose health or safety risks that could otherwise be attributed to the genuine brand.
  • Reinforcement of consumer trust in registered and approved products, labels, and packaging associated with compliant IP owners.
  • Alignment of IP protection with public health objectives, reframing counterfeiting as a regulatory and health risk rather than a purely commercial dispute.
  • Regulatory validation of genuine products, through NAFDAC registration numbers, approved labeling, and quality certifications, which strengthens enforceability of IP claims.
  • Lower enforcement costs for IP rights holders, as regulatory actions reduce reliance on private investigations, civil litigation, and criminal complaints.
  • Faster enforcement outcomes, compared to court-based IP actions, due to NAFDAC’s administrative and executive powers.
  • Deterrence of repeat infringers, through sanctions, seizures, facility shutdowns, and public enforcement actions.

 

  1. Nigeria Customs Service and Border Enforcement

4.1 Legal Basis and Framework

The Nigeria Customs Service exercises statutory authority to regulate imports and exports, examine cargo, and prevent the entry of prohibited or unlawful goods.[9] Border enforcement represents a critical component of IP protection, particularly given Nigeria’s dependence on imported consumer products.

The Trade-Related Aspects of Intellectual Property Rights requires member states to provide procedures enabling customs authorities to suspend the release of suspected counterfeit trademark goods or pirated copyright goods.[10] Although Nigeria’s border enforcement regime continues to evolve, customs officers exercise seizure and detention powers consistent with these international obligations.

4.2 Enforcement Mechanisms

  1. Risk-Based Inspection

Customs employs risk management strategies to identify high-risk consignments based on shipment patterns, origin countries, and intelligence inputs. Collaboration with rights holders enhances officers’ ability to recognize authentic product features and identify counterfeit indicators.

  1. Seizure and Detention Powers

Where consignments raise suspicion of infringement or regulatory non-compliance, Customs may detain or seize goods pending investigation. Preventive interception at ports such as Apapa and Tin Can Island reduces the volume of infringing goods entering domestic supply chains.

  1. Collaboration with Technical Agencies

Customs frequently collaborates with NAFDAC and other regulatory bodies for technical assessment of seized products, particularly pharmaceuticals and regulated goods requiring laboratory verification. This interagency coordination demonstrates the complementary nature of border and domestic enforcement.

4.3 Practical Contribution to IP Protection

Border enforcement mechanisms, particularly through customs interception and port surveillance, offer distinct strategic advantages in the protection of intellectual property rights, especially in high-risk sectors such as pharmaceuticals and medical products. These advantages include:

  • Early disruption of large-scale counterfeit shipments, preventing infringing goods from entering domestic distribution channels before they reach wholesalers, retailers, or informal markets.
  • Interception at source or point of entry, which is more effective than downstream market raids where counterfeit goods are already widely dispersed.
  • Containment of infringement at scale, as a single customs seizure may eliminate thousands of infringing units in one enforcement action.
  • Reduction of enforcement and litigation costs for rights holders, by minimizing the need for extensive market surveillance, private investigations, and multiple infringement actions.
  • Preservation of evidentiary integrity, since goods seized at ports of entry are typically accompanied by shipping documents, invoices, and import records that strengthen subsequent enforcement or prosecution.
  1. Recommendations for Strengthening Enforcement
  2. Establishment of a formal intellectual property record system within Customs to facilitate proactive monitoring of registered trademarks.
  3. Deployment of digital authentication technologies enabling rapid verification of product legitimacy.
  4. Integration of IP registry databases with NAFDAC and Customs enforcement platforms.
  5. Enhanced specialised training programmes focused on counterfeit identification.
  6. Legislative clarification of administrative procedures governing border enforcement of intellectual property rights.

 

  1. Conclusion

Administrative enforcement by NAFDAC and the Nigeria Customs Service constitutes a critical component of Nigeria’s intellectual property protection framework. Through complementary regulatory and border enforcement mechanisms, both agencies contribute significantly to combating counterfeiting and safeguarding proprietary rights. Strengthening institutional coordination, technological capacity, and legal clarity will enhance the effectiveness of enforcement and reinforce confidence in Nigeria’s IP regime.

 

Author

Felicia Ayeomoni

Associate

Email: [email protected]

 

____________________

 

Adeola Oyinlade & Co. is a leading IP law firm in Lagos, Nigeria, providing expert services in Trademark, Patent, Design, and Copyright protection. We specialize in registration, portfolio management, and enforcement. As a licensed DPCO, we offer comprehensive legal solutions, ensuring robust protection and regulatory compliance for global and local intellectual property assets

You may reach out to us for more information and enquiries via [email protected] or call +234 802 686 0247 / +234 803 826 7683.

[1] Trademarks Act CAP T13 LFN, 2004.

[2] Copyright Act 2022 (Act No. 8 of 2022) CAP C28, LFN.

[3] Patents and Designs Act CAP P2 LFN, 2004.

[4] < https://www.afronomicslaw.org/taxonomy/term/695 >accessed 9th of February 2026.

[5]  National Agency for Food and Drug Administration and Control Act Cap N.1 LFN 2004.

[6] Section 5 (a) of the National Agency for Food and Drug Administration and Control Act, 2004.

[7] Section 5 of the National Agency for Food and Drug Administration and Control Act, 2004.

[8] < https://nafdac.gov.ng/update-on-the-ongoing-enforcement-operation-on-the-open-drug-markets-in-nigeria/ > accessed 9th of February, 2026.

[9] Section 4 of the Nigeria Customs Service Act, 2023.

[10]  Article 51 of the Trade-Related Aspects of Intellectual Property Rights, 1994.

New Tax Identification Rules in Nigeria: What Every Business Owner and Income Earner Needs to Know (NTAA 2025)

Introduction

Upon coming into force on 1st January 2026, Nigerians and foreign nationals with business interest in Nigeria have been seeking tax experts’ opinion on a number of emerging issues in the new

Introduction

Following their commencement on 1st January 2026, the four landmark tax reform bills signed into law by President Bola Tinubu in June 2025 have fundamentally modernised and overhauled Nigeria’s fiscal landscape. Designed to simplify and streamline the tax system, these laws—the Nigeria Tax Act (NTA) 2025, the Nigeria Tax Administration Act (NTAA) 2025, the Nigeria Revenue Service (Establishment) Act 2025, and the Joint Revenue Board (Establishment) Act 2025—have prompted significant interest from both Nigerians and foreign nationals with business interests in the country.

Prior to these laws taking effect, the law firm of Adeola Oyinlade & Co. took a proactive lead in public awareness, encouraging active engagement with the new provisions and providing expert insights into various legal inquiries. As stakeholders navigate this transition, we have deemed it necessary to provide structured responses to frequently asked questions regarding Tax Identification, as detailed in this article.

 

What is a Tax ID?

A Tax Identification is a unique identifier assigned to every individual or entity registered with the tax authorities to enable the government to track taxable activities and ensure compliance with tax obligations.[1]

 

Who Must Register for a Tax ID?

Sectional provisions of the new Act require the following persons and bodies to obtain a Tax ID:

  • All individuals or entities earning taxable income
  • Government bodies at all levels (federal, state, and local)[2]
  • Trusts, partnerships, and incorporated companies
  • Non-resident suppliers of goods, services, or digital content into Nigeria, non-residents deriving only passive investment income may not be required to register but must provide relevant information as prescribed by the Nigeria Revenue Service (NRS).[3]
  • Virtual Asset Service Providers (VASPs) offering exchange, custody, or management services related to virtual assets.[4]

Notably, the obligation to register applies regardless of whether the individual or entity currently owes taxes.

 

How Will Registration Work?

Registration will be carried out with the relevant tax authority:

  • For federal tax obligations: the Nigeria Revenue Service (NRS)—a new body created under the Nigeria Revenue Service (Establishment) Act, 2025.[5]
  • For state taxes: the State Internal Revenue Service (SIRS) of the relevant state.[6]

Each person or entity will be issued a single, unique Tax ID. Duplicate or multiple registrations are expressly prohibited, and in cases where duplication occurs, the law mandates that the records must be merged immediately.[7]

Furthermore, where a person fails to register voluntarily, the tax authority is empowered to register the person by default based on available data and notify them thereafter.[8]

 

Where Must the Tax ID be Used?

The Act mandates the use of the Tax ID across a broad range of financial, commercial, and official activities, including:[9]

  • All tax compliance activities: filing returns, making payments, submitting notices, and all correspondence with tax authorities.
  • Business transactions: all documents prepared, issued, or submitted in respect of any transaction must state the Tax ID.
  • Government contracts: a valid Tax ID is a precondition for entering into contracts with any federal or state ministry, department, agency, or local government.
  • Financial services: banks, insurance companies, stockbrokers, and other financial institutions must make a Tax ID a precondition for opening any new account or operating an existing account.

 

Changes in Information Must be Reported

The Act imposes a new duty to notify the relevant tax authority within 30 days of any material change in personal or business particulars, including:[10]

  • Change of name or contact details
  • Change in beneficial ownership or shareholding
  • Sale, merger, or acquisition of a business
  • Death, dissolution, or winding-up of an entity
  • Change of trustee or beneficiary in the case of trusts

Failure to notify changes attracts an administrative penalty of ₦100,000 for the first month and ₦50,000 for each subsequent month of non-compliance.[11]

 

Suspension, Deregistration, or Reinstatement of Tax ID

Where a business suspends operations temporarily, it may within 30 days of such temporary cessation apply for suspension of its Tax ID and the relevant tax authority shall classify it as dormant and place in suspension.[12] Where operations are permanently ceased through closure, dissolution, or death, the Act requires formal deregistration of the Tax ID.[13]

Importantly, if operations resume in the future, the business or individual may be eligible to reactivate the same Tax ID, subject to proper notification and approval.[14]

 

What Happens if You Fail to Comply?

The Act provides for a wide range of administrative and legal consequences in cases of non-compliance, including:

  • Monetary penalties and enforcement actions
  • Restriction from accessing government services or contracts
  • Inability to open or operate regulated financial accounts
  • Increased risk of audit or investigation

 

Practical Steps for Compliance

  • Verify Tax ID status: Confirm that you, your business entities, and all income sources are properly registered
  • Review compliance history: Ensure all returns are filed and payments current
  • Update information: Notify tax authorities of any changes in the past year
  • Establish internal controls: Develop protocols for tracking changes and maintaining accurate records
  • Tax Professionals: Engage the services of tax experts and professionals

 

Conclusion

The Nigeria Tax Administration Act (NTAA) 2025 introduces a modernized framework for tax identification, centralizing the registration process to enhance transparency and revenue collection. Under the new regime, the Tax Identification Number (TIN) serves as the mandatory primary identifier for all taxable persons—including individuals, incorporated entities, and foreign nationals with Nigerian business interests.

Key changes include the integration of the TIN with other national identity databases and stricter enforcement of its use in opening corporate bank accounts and executing government contracts. This article examines the statutory requirements for obtaining a TIN, the transition from legacy systems, and the compliance implications for stakeholders under the 2025 reforms.

 

Author

Felicia Ayeomoni

Associate

Email: [email protected]

__________________________________

Adeola Oyinlade & Co. is a premier tax law firm in Nigeria, providing expert tax advisory, compliance, and litigation services. We navigate the Nigeria Tax Act 2025 to optimize corporate tax, VAT, and withholding tax for global and local clients. Our tax lawyers deliver strategic solutions for tax planning and regulatory disputes, ensuring cross-border fiscal efficiency.

You may reach out to us for more information and enquiries via [email protected] or call +234 802 686 0247 / +234 803 826 7683.

[1] Section 4 of the Nigeria Tax Administration Act, 2025

[2] Section 5 of the Nigeria Tax Administration Act, 2025

[3] Section 6 of the Nigeria Tax Administration Act, 2025

[4] Section 25, Fifth Schedule of the Nigeria Tax Administration Act, 2025

[5] Section 3(1) of the Nigeria Tax Administration Act, 2025

[6] Section 3(2) of the Nigeria Tax Administration Act, 2025

[7] Section 7 (6) of the Nigeria Tax Administration Act, 2025

[8] Section 7 (3) of the Nigeria Tax Administration Act, 2025.

[9] Section 8 of the Nigeria Tax Administration Act, 2025

[10] Section 9 of the Nigeria Tax Administration Act, 2025

[11] Section 112 of the Nigeria Tax Administration Act, 2025

[12] Section 10 (1) (2) of the Nigeria Tax Administration Act, 2025

[13] Section 10 (3) (4) of the Nigeria Tax Administration Act, 2025

[14] Section 10 (6) of the Nigeria Tax Administration Act, 2025

Understanding the New Data Protection Compliance Audit Regime in Nigeria

Introduction

One of the key compliance mechanisms introduced under the NDPA is the requirement for certain data controllers and data processors to conduct periodic compliance audits and file Compliance Audit Returns (CAR) with the Nigeria Data Protection Commission (NDPC).

This article provides an overview of the new data protection compliance audit regime in Nigeria, with particular focus on the obligations surrounding the filing of Compliance Audit Returns. We examine who qualifies as a Data Controller or Data Processor of Major Importance, the timelines and penalties associated with CAR filings, the classification framework established by the NDPC, applicable exemptions, statutory filing fees, and practical steps organizations can take to achieve compliance.

Data Controllers and Processors required to file Nigeria Data Protection Act Compliance Audit Return

Data controllers and Data processors of major importance are expected to file CAR on an annual basis. In the case of a Data controller or a Data processor of major importance that was established before the 12th day of June, 2023, it must file its CAR not later than 31st of March each year. In the case of a Data controller or Data processor of major importance established after the 12th day of June 2023, it must file CAR not later than fifteen (15) months after its establishment and must subsequently file its CAR annually. Where a Data controller or Data processor fails to file its CAR as and when due, it shall pay, in addition to the stipulated filing fee, an administrative penalty, which shall be 50% of the stipulated CAR filing fee.[1]

Data Controllers and Data Processors of Major Importance must register with the NDPC within six months of the NDPA’s commencement or within six months of attaining the status of a Data Controller or Data Processor of Major Importance as such.[2]

 

Designation of Data Controllers and Data Processors of Major Importance

A Data controller or Data processor of major importance is a data controller or data processor who either processes the personal data of more than Two-Hundred (200) data subjects in six (6) months; or carries out commercial ICT services on any digital device which has storage capacity for personal data; or processes personal data as an organization or a service provider in anyone of the following sectors: Aviation, Communication, Education, Electric Power, Export and Import, Financial, Health, Hospitality, Insurance, Oil and Gas, Tourism, E-Commerce  and Public Service.[3]

 

Classification of Data Controllers and Data Processors of Major Importance

The NDPA classifies data controllers and data processors of major importance into three (3) levels or categories of major data processing, namely:

  1. Ultra-High Level (UHL): Data controller and data processor in this category are required to register once and file CAR annually. These includes Commercial banks operating at national or regional level, Telecommunication companies, Insurance companies, Multinational companies, Electricity distribution companies, Oil and Gas companies, Public social media App developers and proprietors, Public e-mail App developers and proprietors, Communication devices manufacturers, Payment gateway service providers, Fintechs and Organizations that process personal data of over Five-Thousand (5,000) data subjects in six (6) months.
  2. Extra-High Level (EHL): Data controllers and data processors in this category are also required to register once and file CAR annually. These includes Ministries, Departments and Agencies (MDAs) of government, Micro Finance Banks, Higher Institutions, Hospitals providing tertiary or secondary medical services, Mortgage Banks and organizations that process personal data of over One-Thousand (1,000) data subjects but less than Five-Thousand (5,000) within six (6) months.
  3. Ordinary-High Level (OHL): Data controllers and data processors in this category are required to renew their registration with the NDPC on an annual basis and not required to file annual CAR when it renews its registration annually. These includes Primary and Secondary Schools, Corporate Training Service Providers, Primary Health Centres, Independent Medical Laboratories, Hotels and Guest Houses with less than fifty (50) suites, Processors who process sensitive personal of more than Two-Hundred (200) data subjects for commercial purposes and organizations that process personal data of over Two-Hundred (200) data subjects but less than One-Thousand (1000) within six (6) months.[4]

Data Controllers that are Not of Major Importance

  1. Traders or artisans who do not transmit personal data as a trade or business object to other data controllers or processors that may process the transmitted personal data for their business goals.
  2. Traders with less than fifteen (15) employees, or Artisans who do not keep any specific filing system of personal data relating to their customers except routine phone contacts files, receipts data, contact addresses and electronic mail addresses.
  3. A Community of Friends, Professionals or People of Common Interest who interact on Social Media Platforms.[5]

Data Controllers and Data Processors of Major Importance Exempted from Registration

The following categories of data controllers of major importance are exempted from registration: Community-Based Associations, Faith-Based Organizations, Foreign Embassies and High Commissions, Judicial establishments or bodies carrying out adjudicatory functions and Multigovernmental Organizations.[6]

NDPA Compliance Audit Returns Filing Fee (Statutory Fee)

A data controller or a data processor within the categories of UHL and EHL are required to file CAR through a Data Protection Compliance Organization (DPCO) licensed by the NDPC.

  1. Ultra-High Level – UHL
  2. 50,000 data subjects and above – N 1, 000, 000
  3. 25,000-49,999 data subjects – N 750, 000
  4. below 25,000 data subjects – N 500, 000
  5. Extra-High Level – EHL
  6. 10,000 data subjects and above –N 250, 000
  7. 5,000-2,500 data subjects – N 200, 000
  8. below 2,500 data subjects – N 100, 000[7]

Steps for Compliance

  1. Determine if your organization qualifies as a Data Controller or Processor of Major Importance.
  2. Appoint a licensed firm to perform the audit, which assesses data processing activities, privacy policies, and consent methods.
  3. Ensure the DPCO files the final audit return with the NDPC before the March 31st deadline.

Conclusion

The NDPA Compliance Audit Return regime reinforces accountability and sound data governance among Data Controllers and Data Processors of Major Importance in Nigeria. Organizations must understand their classification, comply with registration and filing timelines, and engage licensed Data Protection Compliance Organizations to avoid penalties. Timely compliance not only ensures regulatory adherence but also promotes trust, reduces data protection risks, and strengthens overall data management practices.

Author

Olamilekan Fayemi

Associate

Email: [email protected]

____________________

Adeola Oyinlade & Co. is a premier Data Protection and Privacy law firm in Nigeria, providing expert compliance with the NDPA and NDPR. As a licensed DPCO, our data privacy lawyers deliver DPIAs, privacy audits, and data processing agreements. We specialize in cross-border data transfers, data breach management, and IT law, offering rigorous regulatory advisory to safeguard digital assets and enforce privacy rights within Nigeria’s evolving digital economy.

You may reach out to us for more information and enquiries via [email protected] or call +234 802 686 0247 / +234 803 826 7683.

[1] Article 10 of Nigeria Data Protection Act-General Application and Implementation Directive 2025

[2] Section 44 of Nigeria Data Protection Act 2023

[3] Article 8 of Nigeria Data Protection Act-General Application and Implementation Directive 2025

[4] Schedule 7 of Nigeria Data Protection Act-General Application and Implementation Directive 2025

[5] Schedule 7 of Nigeria Data Protection Act-General Application and Implementation Directive 2025

[6] Section 44(6) of Nigeria Data Protection Act 2023

[7] Schedule 10 of Nigeria Data Protection Act-General Application and Implementation Directive 2025

Call for Submissions: The 2026 Adeola Oyinlade & Co. National Essay Competition for Law Students [Exciting Prizes] – Deadline Extended

Description

The annual Adeola Oyinlade & Co. National Essay Competition is organized and sponsored by Adeola Oyinlade & Co., a leading full-service law firm in Nigeria. The competition is designed to challenge the analytical abilities of law students, encouraging them to discuss complex legal topics within the framework of Nigerian law and propose sustainable legal solutions.

Topic (2026)

Freedom of Speech versus Content Moderation in the Digital Era: Striking the Balance in Nigerian Law.

Rationale: The digital space has significantly expanded opportunities for free expression while simultaneously raising concerns regarding misinformation and harmful content. Do current Nigerian laws strike an appropriate balance between freedom of speech and necessary regulation? Or has content moderation become a tool for censorship and the suppression of dissent? Participants are expected to evaluate these competing interests under the Nigerian legal framework.

Eligibility

The competition is open to 100 – 500 level law students currently enrolled in any Nigerian tertiary institution (Federal, State, or Private).

  • Note: This competition is specifically for undergraduate law students. Separate competitions for law graduates and students of the Nigerian Law School will be announced later in the year.

Submission Guidelines

  1. Individual Basis: Submissions must be made by individuals. Co-authorship is not permitted.
  2. Originality: All essays must be original and entirely written by the applicant. Plagiarism is strictly prohibited.
  3. One Entry: Entrants are limited to one submission each.
  4. Word Count: Essays must not exceed 1,500 words (excluding footnotes).
  5. No Graphics: Submissions must not include pictures or other graphical illustrations.
  6. Formatting: Submissions must be in Microsoft Word format.
    • Font: Times New Roman, Size 12.
    • Spacing: Double-spaced.
    • Alignment: Justified.
  7. Referencing: All essays must be appropriately referenced using the OSCOLA style.
  8. Submission Process: Email your essay to [email protected].
    • Subject Line: The 2026 Adeola Oyinlade & Co. National Essay Competition for Law Students in All Tertiary Institutions in Nigeria.
  9. Updates: Please follow Adeola Oyinlade & Co. on LinkedIn for announcements and competition updates.

Deadline

All essays must be submitted by 12:00 Midnight (WAT) on March 15, 2026 (Deadline Extended). Late submissions will not be considered.

Evaluation Criteria

Essays will be judged based on:

  • Originality and depth of analysis.
  • Clarity of expression and relevance to the theme.
  • Spelling, grammar, and strict conformity to contest rules.
  • Note: AI-generated content will be disqualified upon detection.

Prizes

Four cash prize categories and five award levels:

  • Winner: ₦300,000.00 + Internship at Adeola Oyinlade & Co. + Publication on Mondaq and the firm’s official website.
  • First Runner-up: ₦200,000.00 + Internship at Adeola Oyinlade & Co.
  • Second Runner-up: ₦100,000.00 + Internship at Adeola Oyinlade & Co.
  • 4th – 10th Entrants: ₦50,000.00 each + Internship at Adeola Oyinlade & Co.
  • Certificate of Participation: Awarded to all participants who submit entries conforming to the guidelines.

Merit, Not Popularity

This competition is strictly based on the merit of the submissions. No aspect of the judging process requires voting, post-sharing, or social media “likes.”

Enquiries

For further information, please contact Busola Ogundele (Practice Administrator) at 0814 198 3314 or email [email protected].

A Legal Analysis of the Securities and Exchange Commission’s Revised Minimum Capital Framework for Capital Market Operators in Nigeria

Introduction

On 16 January 2026, the Securities and Exchange Commission (“SEC” or “the Commission”) issued Circular No. 26-1 pursuant to its regulatory powers under the Investments and Securities Act, 2025. The Circular introduces a comprehensive revision of the Minimum Capital Requirements (MCR) applicable to all categories of entities regulated within the Nigerian capital market.

This regulatory intervention represents a significant shift in the capital adequacy regime governing capital market operations and reflects the Commission’s strategic response to evolving market risks, increased product complexity, and the emergence of new asset classes, including digital and commodity-based instruments.

Statutory and Regulatory Basis

The authority of the SEC to prescribe minimum capital thresholds derives from its statutory mandate under the Investments and Securities Act, 2025, which empowers the Commission to regulate, develop, and maintain orderly capital markets in Nigeria. In exercising this mandate, the Commission is obligated to ensure investor protection, market integrity, and systemic stability.

Circular No. 26-1 constitutes a subordinate regulatory instrument intended to operationalize these statutory objectives by recalibrating capital requirements in line with contemporary market realities.

Policy Objectives of the Revised Minimum Capital Regime

The revised MCR framework is designed to achieve several interrelated regulatory objectives. These include strengthening the financial soundness and operational resilience of market operators, aligning capital requirements with the scope, complexity, and risk exposure of regulated activities, and enhancing market stability through systemic risk mitigation.

Additionally, the framework seeks to facilitate innovation and orderly market development, particularly in emerging segments such as financial technology, virtual assets, and commodity markets, while maintaining adequate safeguards for investors.

Scope of Application

The Circular applies broadly to all entities regulated by the SEC, without limitation. These include core and non-core capital market operators, market infrastructure institutions, capital market consultants, fintech operators, virtual asset service providers (VASPs), and commodity market intermediaries. The expansive scope reflects the Commission’s intention to adopt a holistic, market-wide approach to capital adequacy regulation.

Revised Minimum Capital Requirements for Core Market Operators

Under the revised framework, substantial increases have been introduced for core regulated functions, including brokerage, dealing, inter-dealer brokerage, and fund and portfolio management services. Brokerage firms engaged in client execution, proprietary trading, margin lending, and advisory services are now subject to materially higher capital thresholds, reflecting the heightened risks associated with such activities.

Fund and portfolio managers are stratified into tiers based on the scope of their operations, assets under management (AuM), and exposure to foreign instruments. Tier 1 portfolio managers with full-scope operations and significant exposure to collective investment schemes and alternative investment funds are required to maintain a minimum capital of ₦5 billion. Notably, the Circular introduces an additional prudential safeguard by mandating that any fund or portfolio manager with assets exceeding ₦100 billion must hold capital equivalent to at least ten per cent of its NAV or AuM.

Capital Requirements for Non-Core Operators and Market Infrastructure Institutions

Non-core regulated functions, including issuing houses, registrars, trustees, underwriters, and rating agencies, are similarly affected by the revised MCR. Issuing houses offering underwriting services are now required to maintain a minimum capital of ₦7 billion, a significant increase from the previous ₦200 million threshold.

Market infrastructure institutions are subject to some of the highest capital requirements under the revised regime. Central Counter Parties (CCPs), composite securities exchanges, and clearing and settlement companies are required to maintain capital levels commensurate with their systemic importance and the potential contagion risks associated with their operations.

Regulation of Fintechs, Virtual Assets, and Commodity Market Intermediaries

A notable feature of Circular No. 26-1 is the formal incorporation of capital requirements for fintech operators and virtual asset service providers. Categories such as robo-advisers, crowdfunding intermediaries, digital asset exchanges, custodians, token issuers, and real-world asset tokenization platforms are now expressly regulated with defined capital thresholds.

The Circular also prescribes revised capital requirements for commodity market intermediaries, including collateral management companies, warehousing operators, and commodities brokers and dealers, with tiered thresholds based on operational scale and geographic reach.

Compliance Timeline and Transitional Arrangements

All regulated entities are required to comply with the revised minimum capital requirements on or before 30 June 2027. The Circular provides that entities failing to meet the prescribed thresholds within the stipulated period may be subject to regulatory sanctions, including suspension or withdrawal of registration.

However, the Commission retains discretion to approve transitional arrangements on a case-by-case basis, subject to application and justification by affected entities. Further regulatory guidance on compliance procedures and capital verification is expected to be issued separately.

Legal and Regulatory Implications

The revised MCR framework signals a decisive shift towards a more risk-sensitive and prudentially robust regulatory regime. While the increased capital thresholds may drive consolidation within the capital market and raise barriers to entry for smaller operators, they are likely to enhance market confidence, investor protection, and systemic stability over the long term.

From a legal perspective, regulated entities must proactively reassess their capital structures, licensing scope, and operational models to ensure continued compliance with the SEC’s evolving regulatory expectations.

Recommended Immediate Actions

  1. Conduct a gap analysis between current capital levels and revised MCR
  2. Review license scope to confirm alignment with capital capacity
  3. Engage financial advisers on recapitalization or restructuring options
  4. Prepare compliance roadmaps ahead of the 30 June 2027 deadline
  5. Consider applying for transitional arrangements, where necessary

Conclusion

Circular No. 26-1 represents a landmark regulatory development in Nigeria’s capital market landscape. By aligning capital requirements with modern risk profiles and expanding regulatory coverage to emerging market segments, the SEC has reaffirmed its commitment to fostering a resilient, transparent, and investor-protective capital market framework.

The revised Minimum Capital for regulated entities are set out below. All capital figures are stated in Nigerian Naira (₦).

 

 

Regulated Entities 2015 MC (₦) Revised MC (₦)
A) CORE REGULATED FUNCTIONS:    
Brokerage Services:
Broker (client execution only) 200.00 million 600 million
Dealer   (proprietary trading only) 100.00 million 1.00 billion
Broker-Dealer

· client     execution,             proprietary             trading, margin/securities lending and advisory services.

 300.00 million 2.00 billion
Sub-Broker (Digital) 10.00 million 100.00 million
Sub-Broker (Corporate) 10.00 million 50.00 million

 

Sub-Broker (Individual) 2.00 million 10.00 million
Inter-Dealer Broker 50.00 million 2.00 billion
Fund/Portfolio Management Services:
Tier 1 –Portfolio Managers (Full Scope)

·     Management of Collective Investment Schemes (CIS) and Alternative Investment Funds (Private Equity, Venture Capital, Infrastructure Funds etc.) above ₦20.00 billion Net Asset Value (NAV).

·     Discretionary and Non-Discretionary Private Portfolio Management Services above ₦20.00 billion Assets under Management (AuM).

·     Exposure to foreign instruments up to 40% of the NAV.

Note – Any Fund and Portfolio Manager with NAV/AuM of more than ₦100.00 billion should have a minimum of 10% of the NAV/AuM as capital.

  

 

 

 

 

 

150.00 million

  

 

 

 

 

 

5.00 billion
Tier 2 –Fund/Portfolio Managers (Limited Scope)

·     Management of CIS with limited pooled fund creation of not more than 10 times the required capital (₦20.00 billion) on Net Asset Value (NAV).

·     Discretionary and Non-Discretionary Private Portfolio Management Services of not more than

₦20.00 billion.

·     Exposure to foreign instruments of not more than 20% of the NAV.

  

 

 

 

150.00 million

  

 

 

 

2.00 billion
Tier 3 – Alternative Investment Fund Managers:    
Private Equity Fund Manager 150.00 million 500.00 million
Venture Capital Fund Manager 20.00 million 200.00 million

 

 

Regulated Entities 2015 MC (₦) Revised MC (₦)
B)  NON-CORE REGULATED FUNCTIONS:    
Issuing House:
Tier 1 – Issuing House

·     Non-Interest Finance services

·     Advisory & Arrangement services

·     No underwriting

  

200.00 million

  

2.00 billion
Tier 2 –Issuing House with Underwriting

·     Offers a ‘one-stop-shop’ for issuers.

·     Provide underwriting services.

·     Renders advisory and product development services.

  

200.00 million

  

7.00 billion
     
Rating Agency 150.00 million 500 million
Registrar 150.00 million 2.5 billion
Trustees 300.00 million 2.00 billion
Underwriters 200.00 million 5.00 billion
Investment Adviser (Corporate) 5.00 million 50.00 million
Investment Adviser (Individual) 2.00 million 10.00 million
     
C) Market Infrastructure:    
Central Counter Party (CCP) 5.00 billion 10.00 billion
Clearing and Settlement Company (CSC) 200.00 million 5.00 billion
Composite Securities Exchange

· Trading and Listing of all types securities.

 500.00 million 10.00 billion
Non-Composite Securities Exchange

· Focus on a single type of security, commodity or financial product.

 500.00 million 5.00 billion
Trade Repository 100.00 million 150.00 million
     
D) Consultants:    
Capital Market Consultant (Corporate) 5.00 million 25.00 million
Capital Market Consultant (Individual) 0.5 million 2.00 million
Capital Market Consultant (Partnership) 2.00 million 10.00 million
     
E)   Fintechs:    
Robo Adviser 10.00 million 100.00 million
Crowd Funding Intermediary 100.00 million 200.00 million

 

 

Regulated Entities 2015 MCR

(₦)

 Revised MCR

(₦)
F)    Virtual Asset Service Providers:    
Ancillary    Virtual                 Assets                 Service                 Providers

(AVASPs)

 N/A 300.00 million
Digital Assets Offering Platform (DAOP) 500.00 million 1.00 billion
Digital Assets Intermediary (DAI) N/A 500.00 million
Digital Assets Platform Operator (DAPO) (including

Token issuers)

 N/A 500.00 million
Real-world Assets Tokenization and Offering

Platform (RATOP)

 N/A 1.00 billion
Digital Assets Exchange (DAX) 500.00 million 2.00 billion
Digital Assets Custodian 500.00 million 2.00 billion
     
G) Commodity Market Intermediaries:    
Collateral Management Company (CMC):
Tier 1 – Local/ Regional Operations 50.00 million 200.00 million
Tier 2 – National/International reach 50.00 million 500.00 million
     
Commodities Broker/Dealer 10.00 million 50.00 million
Commodities Broker 7.00 million 30.00 million
Commodities Dealer 3.00 million 20.00 million
Warehousing Operators 50.00 million 500.00 million
     
H) OTHER ENTITIES    
Custodian of Securities (Bank) 200.00 million As prescribed by the CBN
Non-Bank Custodian – 50.00 billion + 0.1% of AUC
Dealing Member Banks 200.00 million As prescribed by the CBN
Nominee Company 0.001 million 5 million
Receiving Banker (Banker to an Issue) 200.00 million N/A

 

Author

Olamilekan Fayemi

Associate

Email: [email protected]

____________________

Adeola Oyinlade & Co. is a premier full-service law firm and a multi-year recipient of The Lawyers Global “Nigeria Law Firm of the Year” award, distinguished by its deep-seated expertise in navigating the complexities of the Nigerian capital market and the evolving regulatory landscape of the Securities and Exchange Commission (SEC). With an elite team specializing in corporate finance, securities law, and statutory compliance, the firm provides strategic advisory to Capital Market Operators (CMOs) and multinational entities, ensuring that innovative business models are seamlessly integrated within Nigeria’s rigorous legal and minimum capital frameworks.

You may reach out to us for more information and enquiries via [email protected] or call +234 802 686 0247 / +234 803 826 7683.

NOTICE OF FILING: Application for Enforcement of Fundamental Rights in the Matter of Domingos Simões Pereira & Ors v. Republic of Guinea-Bissau

LAGOS, NIGERIA – January 9, 2026 – The law firm of Adeola Oyinlade & Co has officially filed an application before the ECOWAS Community Court of Justice in Abuja (Suit No: EWC/CCJ/APP), seeking the enforcement of the fundamental rights of Mr. Domingos Simões Pereira and four other citizens currently detained in the Republic of Guinea-Bissau.

The legal action follows the events of November 2025 in Guinea-Bissau, which resulted in the military detention of Mr. Pereira, leader of the PAIGC and President of the National People’s Assembly, along with several associates. The suit alleges that the continued detention of these individuals without adherence to due process constitutes a violation of the African Charter on Human and Peoples’ Rights and the Revised ECOWAS Treaty.

The legal team representing the applicants is led by Mr. Adeola Austin Oyinlade, Senior Partner of the firm. Mr. Oyinlade is a human right and international law expert.

 

Nature of the Application

The suit, filed under the regional Court’s human rights jurisdiction, seeks the following reliefs:

  • A declaration that the arrest and continued detention of the applicants constitute a violation of their rights to personal liberty.
  • An order for the immediate release of Mr. Domingos Simões Pereira and four other persons detained in connection with the events of late November.
  • Injunctions restraining the Government of Guinea-Bissau from further violation of the applicants’ fundamental rights.

While some opposition members have since been released, Mr. Pereira remains in custody alongside Octávio Lopes – an elected deputy in the 11th Legislature and PAIGC Party Lawyer, Roberto Mbesba, Marciano Indi – an elected deputy in the 11th Legislature under the PAIGC and ECOWAS Member of Parliament – detained on the 2nd of December 2025, and Augusto Nansambe – PAIGC party lawyer brutally assaulted and detained on the 28 of December 2025.

Their detention has sparked widespread concern across West Africa and the international community.

  • ECOWAS Intervention: The Economic Community of West African States (ECOWAS) has condemned the coup, called for restoration of constitutional order, and initiated diplomatic efforts to secure the release of detainees.
  • Heads of State Engagement: Leaders from Senegal, Nigeria, and Ghana have publicly urged Guinea-Bissau’s Military junta to respect democratic principles and human rights.
  • United Nations Response: The UN has expressed alarm over the suspension of democratic processes and the detention being challenged, calling for immediate release of political detainees and a return to civilian rule.

 

Statement from Adeola Oyinlade & Co.

“Adeola Oyinlade & Co. confirms that it has formally approached the ECOWAS Court of Justice on behalf of Mr. Domingos Simões Pereira and four other detained individuals following the events of November 2025 in Guinea-Bissau.

Our application seeks the Court’s intervention to review the legal basis of their ongoing detention and asks for the protection of their fundamental human rights as guaranteed under the African Charter on Human and Peoples’ Rights and the Revised ECOWAS Treaty.

At Adeola Oyinlade & Co., we are committed to defending fundamental rights and will pursue every available remedy at the ECOWAS Court of Justice to secure their immediate release. This case is not only about Mr. Pereira—it is about safeguarding the dignity and freedom of all citizens in West Africa.” said Mr. Adeola Austin Oyinlade.

 

About Adeola Oyinlade & Co

Adeola Oyinlade & Co is a full-service corporate law firm based in Lagos, Nigeria, providing wide-ranging legal services to local and international clients. The firm’s practice includes human rights law, international law, and Dispute Resolution, with a commitment to advancing the rule of law across Africa.

Note: This statement is issued solely for the purpose of public information on a matter of significant regional interest.

 

Media Contact:

Busola Ogundele

Practice & Communications Officer

Adeola Oyinlade & Co

Email: [email protected]

Understanding the Essential Contracts Every Small and Medium-Sized Business Needs in Nigeria

Running a small or medium-sized business requires juggling countless priorities, and legal documentation often takes a back seat to more immediate operational concerns. However, having the right contracts in place is fundamental to protecting your business interests, preventing disputes, and establishing clear professional relationships.

In Nigeria, many small and medium-sized enterprises (SMEs) operate informally without adequate contractual documentation. This exposes them to legal risks, partner disputes, and compliance penalties. Whether you run a tech startup, retail business, or Service Company, having well-drafted contracts is critical for operational clarity, investor confidence, and long-term sustainability. This article outlines the essential contracts every small and medium-sized business (SME) in Nigeria should have to operate safely and efficiently.

  1. Partnership Agreement

A Partnership Agreement is crucial, even where it is not legally mandated. This internal document defines ownership structure, management powers, profit sharing, and procedures for resolving disputes or ownership changes.

Under Sections 761–766 of the Companies and Allied Matters Act (CAMA) 2020, partnerships and Limited Liability Partnerships (LLPs) must have clear internal governance arrangements. Without this, your business defaults to partnership law provisions that may not reflect your intentions such as equal profit distribution or dissolution upon a partner’s exit.

Key provisions in a partnership agreement:

  • Ownership percentages and capital contributions
  • Profit and loss allocation
  • Voting rights and management structure
  • Procedures for adding or removing members
  • Exit strategies and buyout provisions
  • Dispute resolution mechanisms

This document should be established at formation and updated as your business circumstances evolve.

  1. Employment Agreements and Offer Letters

Clear employment documentation protects both your business and your employees by establishing expectations from the outset. While most employment is “at-will,” written agreements should outline compensation, responsibilities, benefits, and termination conditions.

For key personnel and executives, more comprehensive contracts may include specific performance metrics, non-compete provisions (where enforceable), and severance terms.

Essential elements include:

  • Position, duties, and reporting structure
  • Compensation, bonuses, and benefits package
  • Work schedule and location requirements
  • Confidentiality obligations
  • Intellectual property assignment
  • Termination conditions and notice requirements
  1. Independent Contractor Agreements

Many businesses utilize independent contractors for specialized work, but misclassification carries significant legal consequences. A properly drafted independent contractor agreement clarifies the working relationship and helps demonstrate that the worker is genuinely independent rather than an employee.

This distinction is critical for tax withholding, benefits eligibility, and liability purposes.

Critical provisions in an independent contractor agreement:

  • Detailed scope of work and deliverables
  • Payment structure and schedule
  • Project timelines and milestones
  • Intellectual property ownership
  • Confidentiality requirements
  • Independent contractor status confirmation
  • Termination provisions
  • Indemnification clauses

The agreement must reflect the actual working relationship. If you control when, where, and how work is performed, the worker may legally be classified as an employee regardless of contractual language.

  1. Client Service Agreements

Every client engagement should be governed by a written agreement that clearly defines the services provided, deliverables, timelines, and compensation. This prevents scope expansion, payment disputes, and misaligned expectations.

Client service agreements establish a professional framework and provide crucial protection if disputes arise regarding deliverables or payment.

Core components in a client service agreement includes:

  • Detailed scope of services
  • Specific deliverables and deadlines
  • Payment terms, rates, and schedule
  • Expense reimbursement policies
  • Revision and change order procedures
  • Cancellation and refund terms
  • Dispute resolution process
  • Governing law and jurisdiction

For ongoing client relationships, consider implementing a master services agreement with project-specific statements of work.

 

  1. Non-Disclosure Agreements (NDAs)

When sharing sensitive business information with potential investors, partners, employees, or vendors, a non-disclosure agreement protects your confidential information from unauthorized disclosure or misuse. NDAs are particularly important when discussing proprietary processes, trade secrets, client lists, financial data, or strategic plans.

NDAs can be mutual (both parties share confidential information) or unilateral (one party discloses information). Select the appropriate structure based on your business relationship.

An NDA typically includes the following:

  • Clear definition of confidential information
  • Permitted and prohibited uses
  • Duration of confidentiality obligations
  • Standard exceptions (publicly available information, independently developed material)
  • Return or destruction requirements for confidential materials
  • Remedies for breach
  • Governing law
  1. Vendor and Supplier Agreements

Written agreements with vendors and suppliers prevent misunderstandings regarding pricing, delivery schedules, quality standards, and payment terms. These agreements are especially important for relationships involving consistent supply chains or where product quality directly impacts your operations.

Without clear written terms, your business is vulnerable to unexpected price increases, quality inconsistencies, delivery delays, and disputes over warranties or defects.

Important terms in a Vendor and Supplier agreement includes:

  • Product or service specifications and quality standards
  • Pricing structure and payment terms
  • Delivery schedules and shipping responsibilities
  • Minimum order requirements or purchase commitments
  • Warranty provisions and defect remedies
  • indemnification
  • Termination procedures
  • Force majeure clauses

 

  1. Commercial Lease Agreement

If you lease commercial space, your lease represents one of your most significant ongoing financial obligations. Commercial leases typically favor landlords and often place substantial responsibilities and costs on tenants. Given their complexity and long-term financial implications, commercial leases should always be reviewed by legal counsel before execution.

The terms negotiated at lease inception can significantly impact your operations and profitability for years to come.

Critical terms to review and negotiate in a commercial lease agreement includes:

  • Base rent
  • Tenant improvement allowances and construction responsibilities
  • Permitted uses and restrictions
  • Maintenance and repair obligations
  • Insurance requirements
  • Sublease and assignment rights
  • Renewal options and terms
  • Early termination provisions

 

  1. 8. Intellectual Property Assignment Agreements

If your business creates original content, software, designs, or inventions, you must ensure your business actually owns these assets. Under copyright law, work created by employees within their employment scope typically belongs to the employer through the “work for hire” doctrine. However, this does not automatically apply to independent contractors.

Without proper IP assignment agreements, you may discover that critical business assets, your website, logo, software, or product designs are legally owned by the freelancer who created them rather than your company.

Key provisions in Intellectual Assignment Agreements are:

  • Comprehensive assignment of all intellectual property rights
  • Work for hire language where applicable
  • Obligation to assist with registrations and enforcement actions
  • Carve-outs for previous works and third-party materials
  • Post-relationship obligations
  1. Terms of Service and Privacy Policy (For Online Businesses)

If your business operates a website, collects customer information, or conducts e-commerce, you need terms of service and a privacy policy. These are often legally required, particularly if you collect data from individuals under the Nigeria Data Protection Act, 2023.

Your terms of service establish the rules for using your website or services, while your privacy policy explains data collection, use, and protection practices. Both documents can limit liability and provide grounds for terminating problematic users.

The Terms of service should address:

  • Acceptable use policies
  • Account registration and security requirements
  • Intellectual property ownership
  • Warranty disclaimers
  • Limitation of liability
  • Dispute resolution and arbitration provisions
  • Governing law

While Privacy policies should explain:

  • Information collection methods and types
  • Data usage purposes
  • Third-party data sharing practices
  • User rights regarding data access and deletion
  • Security measures implemented
  • Cookie usage and tracking technologies

These documents must be easily accessible on your website and updated as your practices or applicable laws change.

Conclusion

Every business no matter its size needs a robust legal framework to thrive. Contracts provide certainty, accountability, and protection in commercial relationships.  While online templates can serve as a starting point, each contract should be customized to reflect your industry, operational model, and compliance obligations. Engaging a legal professional ensures your agreements are enforceable, compliant with Nigerian laws, and tailored to protect your specific business interests.

 

Author

Felicia Ayeomoni

Associate

Email: [email protected]

____________________

Consistently ranked as a Tier 1 full-service law firm and recognized as the ‘Nigerian Law Firm of the Year’ in 2024 and 2025, Adeola Oyinlade & Co. is a leading practice known for providing specialized legal support to SMEs and startups through a dedicated desk covering business formation, compliance, IP protection, contracting, and funding advisory.

The law firm also advises a vast number of multinational and domestic companies. You may reach out to us for more information and enquiries via [email protected] or call +234 802 686 0247 / +234 803 826 7683.

Making Arbitration Clauses Work: Practical Steps And Key Considerations Under Nigeria’s Arbitration Framework

 

  1. Introduction

Arbitration continues to be a preferred dispute-resolution mechanism for commercial parties seeking confidentiality, speed, and procedural autonomy. With the enactment of the Arbitration and Mediation Act 2023 (“AMA”), Nigeria has modernised its arbitral framework, aligning domestic practice with international standards.

Understanding how to give effect to an arbitration clause under the AMA is essential to managing commercial and legal risk. In practice, enforcement can arise in a range of situations from resisting court proceedings to ensuring that an arbitral award is ultimately recognised. This article explores the key stages of enforcement under the AMA, explains the procedural framework that supports it, and outlines practical considerations that contracting parties should bear in mind when negotiating or invoking arbitration clauses.

  1. The Legislative Context

Prior to the AMA, arbitration in Nigeria was governed by the Arbitration and Conciliation Act 1988 (“ACA”). While the ACA served as a foundational statute, its provisions no longer reflected global best practice. The AMA, which repeals the ACA, introduces several significant innovations:

  • Mandatory referral to arbitration: Courts are now required to refer disputes to arbitration where a valid arbitration agreement exists, save where the agreement is void, inoperative, or incapable of being performed.[1]
  • Recognition of emergency arbitrators and interim measures: the AMA enable urgent relief before a full tribunal is constituted.[2]
  • The Award Review Tribunal (ART): An optional mechanism allowing limited review of arbitral awards if parties have so agreed.[3]
  • Revised enforcement provisions: The AMA consolidates the recognition and enforcement of both domestic and foreign awards, implementing the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (“NYC”).[4]

These developments collectively strengthen the credibility and enforceability of arbitration in Nigeria and enhance the attractiveness of Nigeria as an arbitral seat.

  1. When Enforcement Arises

In practice, the enforcement of an arbitration clause typically arises in two scenarios:

3.1 Stay or referral of court proceedings
Where one party commences litigation despite an arbitration clause, the other party may apply for a stay to halt the proceeding and apply for a referral to arbitration. Under AMA, the court shall refer the matter to arbitration unless the arbitration agreement is void, inoperative, or incapable of performance.[5]

3.2 Initiation of arbitration proceedings
Where a dispute arises and the counter-party declines to participate in arbitration, the initiating party may rely on the clause to commence proceedings in accordance with the agreed institutional or ad hoc rules, and the tribunal may proceed ex parte where notice has been properly served.

  1. Enforcing the Clause: Procedural Overview

Step 1: Confirmation of the existence and validity of the arbitration clause

Before seeking to enforce an arbitration agreement, it is important to confirm that a valid and binding clause actually exists between the parties. The AMA requires that an arbitration agreement be in writing, whether contained in a contract, an exchange of correspondence, or any record that evidences the parties’ consent.[6] This written formality ensures clarity and reduces disputes about whether the parties intended to arbitrate.

Equally significant is the principle of separability, codified in the AMA. Under this rule, an arbitration clause is treated as legally distinct from the main contract in which it appears.[7] This means that even if the substantive contract is alleged to be invalid, rescinded, or terminated, the arbitration clause may survive and continue to bind the parties. In practice, separability preserves the tribunal’s jurisdiction and prevents parties from evading arbitration simply by challenging the underlying contract.

Step 2: Assessing timing and scope

Before invoking an arbitration clause, it is important to ensure that the dispute in question actually falls within the scope of the clause. The tribunal’s jurisdiction is derived solely from the parties’ agreement, and any claim that lies outside its terms may not be referable to arbitration. Parties should therefore review the wording of the clause carefully, particularly where it distinguishes between contractual and non-contractual claims or limits arbitration to specified issues.

Step 3: Application for stay or referral to arbitration

Where court proceedings have been commenced in breach of an arbitration agreement, the proper course is to apply for a stay of proceedings and a referral to arbitration. The application must be made in writing before the appropriate High Court and supported by evidence of the underlying contract and the arbitration clause.

Under section 5 of the AMA, once the court is satisfied that a valid and operative arbitration agreement exists, it is obliged to stay the proceedings and refer the dispute to arbitration. The court’s discretion in this regard is limited, it cannot inquire into the merits of the dispute but may only determine whether the arbitration agreement is void, inoperative, or incapable of being performed.

Step 4: Commence or respond to arbitration

Once the court has referred the matter to arbitration or where no court proceedings have been initiated a party may proceed to commence arbitration in accordance with the procedure agreed in the contract or under the applicable institutional rules. Where the agreement is silent, the AMA provides a default mechanism, presuming the appointment of a sole arbitrator under unless the parties agree otherwise.[8]

Upon constitution, the arbitral tribunal acquires jurisdiction to determine all matters submitted to it, including any challenge to its own competence. This reflects the principle of competence-competence, which empowers the tribunal to rule on its own jurisdiction, including any objection to the existence or validity of the arbitration agreement.[9]

In practical terms, this step underscores the importance of timely participation. A party served with a notice of arbitration should engage promptly either by appointing its arbitrator or responding to the notice to ensure that its procedural and jurisdictional rights are preserved under the AMA framework

Step 5: Enforcement of the arbitral award

At the conclusion of the arbitration, the resulting award is final and binding on the parties. An arbitral award may be recognised and enforced by the court in the same manner as a judgment of that court.[10] This provision ensures that arbitration outcomes carry the same legal weight as judicial decisions, thereby giving practical effect to party autonomy.

For foreign arbitral awards, the AMA adopts and codifies the New York Convention (1958) framework, providing for recognition and enforcement in Nigeria, subject only to the limited grounds for refusal under the Convention such as incapacity, invalidity of the arbitration agreement, lack of proper notice, or contravention of public policy.[11]

  1. Recommended Best Practices under the AMA

In light of the statutory changes introduced by the AMA, the following recommendations represent widely recognised best practices in the drafting and enforcement of arbitration clauses:

5.1 Clarity of drafting
Arbitration clauses should be precise, identifying the seat, applicable procedural rules, number of arbitrators, and language. A well-defined clause reduces the likelihood of preliminary disputes over jurisdiction.

5.2 Timely invocation of arbitration
Where court proceedings are commenced, early reliance on the arbitration clause ensures compliance with section 5 of AMA and maintains procedural efficiency.

5.3 Consideration of the arbitral seat
The seat determines the procedural law governing the arbitration and the extent of court supervision. Section 32 of AMA provides a default seat where none is stated, but express selection remains best practice.

5.4 Record-keeping and procedural compliance
Retention of the arbitration agreement, notices, and communications facilitates enforcement and demonstrates adherence to due process.

5.5 Interim and emergency measures
The AMA empowers emergency arbitrators and courts to grant interim measures. These tools can be instrumental in preserving assets or evidence before the tribunal is fully constituted.

5.6 Preparation for enforcement
Ensuring compliance with the AMA promotes smooth recognition and enforcement of awards. This includes maintaining certified copies of the arbitration agreement and award, and complying with translation or authentication requirements.

  1. Key Considerations

Although the AMA modernises Nigeria’s arbitration framework and strengthens judicial support for arbitration, parties should remain alert to certain practical and legal considerations that may affect the effectiveness of their arbitration agreements and awards.

6.1 Validity and scope of the arbitration clause

The enforceability of an arbitration agreement depends first on its validity. Ambiguous drafting or failure to comply with the writing requirement under section 2 of AMA may render a clause void or inoperative. Parties should therefore ensure that the clause is clearly expressed, covers the intended range of disputes, and is consistent with the governing law of the contract. A poorly drafted clause may invite jurisdictional challenges or delay enforcement.
6.2 Non-arbitrable subject matter
Not all disputes can be resolved by arbitration. Matters involving public policy, criminal liability, or certain statutory rights such as those relating to matrimonial causes or taxation are generally excluded from arbitration. Before including an arbitration clause, parties should confirm that the subject matter of their potential disputes is legally arbitrable under Nigerian law to avoid invalidity or wasted proceedings.

6.3 Waiver through litigation

Under the AMA, parties must invoke their arbitration rights promptly. Active or substantive participation in court proceedings without first seeking a stay may be viewed as a waiver of the right to arbitrate. This underscores the need for early procedural strategy: once a dispute arises, parties should decide at the outset whether to pursue arbitration or litigation and act consistently with that choice.
6.4 Timing of jurisdictional challenges

The AMA allows arbitral tribunals to rule on their own jurisdiction, but jurisdictional objections must be raised without undue delay. Failing to challenge the tribunal’s authority at the appropriate stage may preclude the party from raising the issue later, including at the enforcement stage. Timely objections therefore preserve procedural rights and prevent unintended submission to jurisdiction.

6.5 Enforcement obstacles
Even under the improved enforcement framework of the AMA, practical hurdles may still arise. These include difficulties in serving foreign parties, authenticating or certifying awards, and resistance to enforcement on public policy grounds. Successful enforcement depends on procedural diligence such as maintaining proper records, obtaining certified copies of key documents, and ensuring compliance with both domestic and international enforcement requirements.

  1. Conclusion

The Arbitration and Mediation Act 2023 represents a significant advancement in Nigeria’s dispute-resolution framework. Its provisions enhance judicial support for arbitration and align local practice with global standards. By adopting clear arbitration clauses, observing procedural timelines, and maintaining compliance with the Act’s requirements, parties can better secure the efficiency and finality that arbitration is designed to provide.

Author

Felicia Ayeomoni

Associate

Email: [email protected]

____________________

Consistently ranked as the “Nigerian Law Firm of the Year” (2024 & 2025) and Tier 1 law firm by The Lawyers Global, Adeola Oyinlade & Co handles the most complex, high-stakes international arbitrations and domestic disputes. Renowned for high-level commercial arbitration, the law firm provide arbitration services as lead or co-counsel in energy, Oil & Gas, FinTech, transport, and manufacturing sectors for multinational and domestic companies. You may reach out to us for more information and enquiries via [email protected] or call +234 802 686 0247 / +234 803 826 7683.

[1] Arbitration and Mediation Act, 2023 section 5(1) .

[2] Arbitration and Mediation Act, 2023 sections 16 & 19.

[3] Arbitration and Mediation Act, 2023 section 56.

[4] Arbitration and Mediation Act, 2023 section 57-60.

[5] Arbitration and Mediation Act, 2023 section 5(1).

[6] Arbitration and Mediation Act, 2023 section 2(2).

[7] Arbitration and Mediation Act, 2023 section 14(2).

[8] Arbitration and Mediation Act, 2023 section 6(2).

[9] Arbitration and Mediation Act, 2023 section 14.

[10] Arbitration and Mediation Act, 2023 section 57.

[11] Arbitration and Mediation Act, 2023 section 60.

Understanding Personal Income Tax Under the Nigerian Tax Act 2025

 

  1. Introduction

The Nigeria Tax Act, 2025 (“the Act”) was signed into law on June 26, 2025, and is set to take effect from January 1, 2026. This new legislation marks a major reform of Nigeria’s tax system. It repeals several existing tax laws, including the Personal Income Tax Act, and consolidates all major tax provisions into a single, comprehensive statute.

In this article, we focus on the personal income tax aspects of the Act. Specifically, we examine the new tax rates, the allowable deductions, and how taxable income is determined under the updated framework. The aim is to explain these provisions in clear and practical terms, highlighting what they mean for individual taxpayers in Nigeria.

  1. Scope of Application

The law applies to individuals whose income is considered to arise in Nigeria, whether or not that income is actually received or brought into the country.[1] In other words, if you earn money that is connected to Nigeria in some way, you may be required to pay tax on it even if the payment happens abroad.

2.1 Who is considered a resident individual?

An individual is regarded as a resident for tax purposes in a particular year if any of the following apply:[2]

  • Domicile: The person’s permanent home is in Nigeria. This means Nigeria is where the person ultimately intends to live and return to, even if they temporarily live elsewhere.
  • Permanent home in Nigeria: The person has a permanent place available for personal or family use in Nigeria, such as a house or apartment whether owned or rented.
  • Habitual abode: The person regularly lives in Nigeria or spends most of their time here.
  • Economic and family ties: The person has strong business or financial interests in Nigeria, or their immediate family (spouse, children, dependents) live in Nigeria.
  • Physical presence: The person spends a total of 183 days or more in Nigeria during any 12-month period. These days don’t have to be consecutive they can add up over multiple visits.
  • Diplomatic service: Nigerian diplomats or diplomatic agents serving abroad are still treated as residents for tax purposes.

A resident individual, therefore, is someone whose life, work, or family is substantially tied to Nigeria.

  • What about non-residents?

People who are not resident in Nigeria are only taxed on income that is earned in or derived from Nigeria.[3]
For example, if a foreign consultant provides services to a Nigerian company and is paid for that work, that income is taxable in Nigeria. However, if the same person earns income from a source outside Nigeria that has nothing to do with Nigeria, that income is not taxable by Nigeria.

  1. TAXABLE INCOME

Section 4 of the Act defines the income, profits, or gains that are chargeable to tax. For individuals, taxable income includes several categories as outlined in the relevant provisions of the law.

3.1 Employment income: covers all forms of compensation or rewards received in respect of employment. This includes salaries, wages, fees, allowances, compensations, bonuses, premiums, benefits, or any other perquisites granted by an employer to an employee.[4]

3.2 Business and professional income: includes profits or gains derived from any trade, business, profession, or vocation.[5]

3.3 Investment income is also taxable under the Act. This includes dividends, premiums, charges, or annuities; royalties, fees, rents, or interest arising from the use, exploitation, or occupation of any property; and income, profits, or gains from the disposal or lending of securities.[6]

3.4 Capital gains: these are gains accruing to any person in a year of assessment, which are chargeable to tax from the disposal of certain assets.[7] Section 34 further defines chargeable assets to include all types of property, shares, options, rights, debts, digital or virtual assets, and incorporeal property, making it clear that both tangible and intangible assets are covered.

3.5 Pension income is also taxable and it includes any pension, annuity, or similar periodic payment received by an individual.[8]

3.6 Other taxable income sources: These include fees, dues, allowances, or remuneration for services rendered; discounts or rebates; disposal of money or money instruments; prizes, winnings, honoraria, grants, or awards; as well as profits or gains from the disposal of property, fixed assets, or from transactions in digital or virtual assets.[9]

  1. Exempted income

Section 163 lists the types of income that are exempt from tax under Chapter Two of the Act. Key exemptions for individuals include:

4.1 Income from Exempt Organizations
Profits or gains from educational, religious, or charitable activities of a public nature, provided the income is not from a trade or business.

4.2 Certain Investment Income
Dividends from approved collective investment schemes, dividends from wholly export-oriented businesses, and income such as dividends, interest, rent, or royalties earned abroad and brought into Nigeria through approved channels.

4.3 Pensions and Retirement Benefits
Income from pension funds created under the Pension Reform Act, pensions or gratuities paid in line with the Act, and wound or disability pensions paid to members of the armed forces.

4.4 Compensation
Death gratuities or compensation for injury, and redundancy or severance payments that are capital in nature.

4.5 Minimum Wage Earners
Income from employment is exempt where the person earns the national minimum wage or less.

4.6 Military Wages and Salaries
Wages and salaries paid to members of the armed forces are exempt.

4.7 Agricultural Income
Income from agricultural businesses is exempt for the first five years after the business begins.

4.8. Export Profits
Profits from goods or services exported from Nigeria are exempt if the proceeds are brought back through official channels (excluding petroleum operations).

  1. Exempted gains

Section 163(2) also identifies certain gains that are not taxable:

5.1 Principal Private Residence
Gains from selling one’s main home and the land around it (up to one acre) are exempt, once in a lifetime.

5.2 Personal Chattels
Gains from selling personal belongings worth ₦5,000,000 or less, or up to three times the national minimum wage, are exempt.

5.3 Motor Vehicles
Up to two private or non-commercial vehicles per year are exempt from capital gains tax.

5.4 Gifts
Gains from giving or receiving assets as gifts (other than through inheritance) are exempt.

5.5 Personal Injury Compensation
Compensation up to ₦50,000,000 for personal injury, professional loss, or loss of employment is exempt. Only the excess above ₦50,000,000 is taxable.

5.6 Pension Fund Disposals
Gains from investments made by approved pension or retirement funds are exempt.

5.7 Military Decorations
Gains from selling medals or decorations awarded for bravery or service are exempt if they were not bought for money.

  1. ELIGIBLE DEDUCTIONS

Section 30(2)(a) defines eligible deductions as payments made by an individual in a year of assessment in respect of the following:

6.1 National Housing Fund Contributions
Contributions made under the National Housing Fund are deductible.

6.2. National Health Insurance Scheme Contributions
Contributions made under the National Health Insurance Scheme are deductible.

6.3 Pension Contributions
Contributions made under the Pension Reform Act are deductible.

6.4 Interest on Housing Loans
Interest paid on loans taken for developing an owner-occupied residential house is deductible.

6.5 Life Insurance and Annuity Premiums
Any annuity or premium paid in the year preceding the year of assessment for insurance on the individual’s life or that of their spouse, or for a deferred annuity contract, is deductible.

6.6 Rent Relief
Twenty percent (20%) of annual rent paid, up to a maximum of ₦500,000 (whichever is lower), is deductible, provided the actual amount of rent paid is accurately declared: An individual paying ₦3,000,000 annual rent is entitled to a 20% deduction (₦600,000), but since the amount exceeds the ₦500,000 cap, the deductible amount is ₦500,000.

 

  1. PERSONAL INCOME TAX RATES AND BAND

The Fourth Schedule of the Personal Income Tax Act sets out how personal income tax is calculated in Nigeria.[10] The tax is imposed on chargeable income, which is the portion of a person’s income that remains after all applicable relief allowances and exemptions have been deducted under Section 30(1) of the Act.

The Fourth Schedule establishes six progressive tax bands, meaning that the more you earn, the higher the rate of tax you pay on the additional income not on your entire income. The bands are as follows:

Band 1: First ₦800,000 at 0%

The first ₦800,000 of annual income is completely tax-free.
For example, if an individual earns ₦700,000 in a year, they will pay no tax at all since the entire income falls below the ₦800,000 threshold.

Band 2: Next ₦2,200,000 at 15%

Income that exceeds ₦800,000 but does not go beyond ₦3,000,000 is taxed at 15%.
For instance, if an individual earns ₦1,200,000 in a year, the first ₦800,000 is tax-free, while the remaining ₦400,000 is taxed at 15%. This gives a total tax of ₦60,000.
If the individual earns ₦3,000,000, the first ₦800,000 remains tax-free, and the next ₦2,200,000 is taxed at 15%, resulting in ₦330,000 in tax.

Band 3: Next ₦9,000,000 at 18%

Income above ₦3,000,000 and up to ₦12,000,000 is taxed at 18%.
For example, if someone earns ₦6,000,000 in a year, the first ₦800,000 is tax-free, the next ₦2,200,000 is taxed at 15% (₦330,000), and the remaining ₦3,000,000 is taxed at 18% (₦540,000). This brings the total tax payable to ₦870,000.

Band 4: Next ₦13,000,000 at 21%

Income above ₦12,000,000 and up to ₦25,000,000 is taxed at 21%.
For instance, if an individual earns ₦15,000,000 annually, the first ₦800,000 is tax-free, the next ₦2,200,000 is taxed at 15% (₦330,000), the following ₦9,000,000 is taxed at 18% (₦1,620,000), and the remaining ₦3,000,000 is taxed at 21% (₦630,000). Altogether, the person will pay ₦2,580,000 in tax.

Band 5: Next ₦25,000,000 at 23%

Income that exceeds ₦25,000,000 but does not go beyond ₦50,000,000 is taxed at 23%.
For example, if an individual earns ₦40,000,000 annually, the first ₦800,000 is tax-free, the next ₦2,200,000 is taxed at 15% (₦330,000), the following ₦9,000,000 is taxed at 18% (₦1,620,000), the next ₦13,000,000 is taxed at 21% (₦2,730,000), and the remaining ₦15,000,000 is taxed at 23% (₦3,450,000). The total tax payable in this case amounts to ₦8,130,000.

Band 6: Above ₦50,000,000 at 25%

Any income exceeding ₦50,000,000 is taxed at 25%.
For example, if an individual earns ₦60,000,000 in a year, the first ₦800,000 is tax-free, the next ₦2,200,000 is taxed at 15% (₦330,000), the following ₦9,000,000 is taxed at 18% (₦1,620,000), the next ₦13,000,000 is taxed at 21% (₦2,730,000), and the next ₦25,000,000 is taxed at 23% (₦5,750,000). The remaining ₦10,000,000 (which exceeds ₦50,000,000) is taxed at 25%, giving ₦2,500,000. In total, the tax payable on ₦60,000,000 amounts to ₦12,930,000.

  1. Computation of Chargeable Income

Total income as an individual’s taxable income minus total deductions.[11]

Taxable income includes:

  • Profits from trade, business, or profession;
  • Employment income;
  • Investment income;
  • Income from any other source; and
  • Chargeable gains from asset disposals.

Total deductions include:

  • Losses;
  • Capital allowances;
  • Tax-exempt income; and
  • Income already taxed at source as final tax.

Thus, chargeable income is what remains after deducting all eligible deductions from total income.[12]

  1. Conclusion

The Nigeria Tax Act, 2025 consolidates personal income tax rules into a single framework, outlining clear tax rates, deductions, and exemptions for individuals. It provides a structured basis for determining taxable income and ensures consistency in the application of personal income tax from January 1, 2026.

Author

Felicia Ayeomoni

Associate

Email: [email protected]

____________________

Consistently ranked as the “Nigerian Law Firm of the Year” (2024 & 2025) and Tier 1 law firm by The Lawyers Global, Adeola Oyinlade & Co is recognized as a top provider of tax law services in Nigeria for its lawyers ability to handle both tax advisory (structuring transactions) and tax litigation (disputes with the FIRS now called Nigeria Revenue Service- NRS or State Internal revenue Services). You may reach out to us for more information and enquiries via [email protected] or call +234 802 686 0247 / +234 803 826 7683.

[1] The Nigeria Tax Act 2025, section 12.

[2] The Nigeria Tax Act 2025, section 202.

[3] The Nigeria Tax Act 2025, section 17 (1).

[4] The Nigeria Tax Act 2025, section 13 (1).

[5] The Nigeria Tax Act 2025, section 4 (1) (a).

[6] The Nigeria Tax Act 2025, section 4 (1) (b), (c), (q).

[7] The Nigeria Tax Act 2025, section 33.

[8] The Nigeria Tax Act 2025, section 4 (2) (b).

[9] The Nigeria Tax Act 2025, section 4 (1).

[10] The Nigeria Tax Act 2025, section 58.

[11] The Nigeria Tax Act 2025, section 28.

[12] The Nigeria Tax Act 2025, section 30.

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