The Federal Inland Revenue Service (FIRS) has clarified that the newly introduced 4% Development Levy is not an additional tax burden on Nigerian companies but rather a consolidation of several existing levies under the country’s new tax framework.

In a statement released on Wednesday, the agency explained that the levy created under the Nigeria Tax Act (NTA) 2025 harmonizes multiple sector-specific charges that businesses previously paid separately. These include the Tertiary Education Tax, NITDA Levy, NASENI Levy, and the Police Trust Fund Levy.

According to FIRS, merging these fragmented levies into one unified 4% charge will simplify compliance, reduce administrative costs, and provide companies with clearer expectations regarding tax obligations.

The levy is charged on assessable profits, though small companies and non-resident firms are exempt under the new law. Officials say the reform is part of a broader effort to streamline the tax system and enhance Nigeria’s ease of doing business.

The clarification comes amid public concerns that the levy represented a fresh financial strain on companies. FIRS insists the reform is intended to bring predictability and transparency, not additional burden.

The 2025 Tax Reform Acts, introduced this year, mark one of the most sweeping overhauls of Nigeria’s tax structure in decades, affecting corporate taxation, capital gains, and multiple development-related charges. Visit www.jocomms.com for more news.