In July 2025, the Federal Competition and Consumer Protection Commission (FCCPC) introduced the Digital Electronic Online, Non-Traditional Consumer Lending Regulations (DEON Consumer Lending Regulations) 2025. These rules are designed to bring greater transparency, accountability, and consumer protection into a market that has grown rapidly but often without sufficient oversight.
For business leaders, investors, and fintech operators, the regulations are not just about compliance—they reshape how digital lending will work in Nigeria for years to come. Below is a clear analysis of the new framework, its opportunities, and its challenges.
Mandatory Re-Registration and High Compliance Costs
Every digital lender and service provider currently operating must re-register with the FCCPC within 90 days from July 24, 2025. This implies that the deadline for compliance is November 5, 2025. Once registration is granted, approvals are valid until December 31 of the third calendar year and must be renewed by March 31 of the following year.
The cost of re-registration is significant. Beyond the ₦100,000 non-refundable application fee, lenders must pay ₦1,000,000 for registration and approval, which covers two software applications. Each additional application, up to five in total, attracts a fee of ₦500,000. Renewals also come with an annual levy of ₦500,000 after the first three-year cycle.
While this system may help the FCCPC sanitize the market and eliminate rogue operators, it risks excluding smaller or emerging players who cannot shoulder such heavy financial obligations. The effect could be a consolidation of the sector around larger, better-capitalized firms.
Clearer Rules on Interest Rates, Terms, and Consumer Protection
One of the most consumer-friendly provisions requires lenders to disclose all interest rates, repayment terms, and associated fees in plain English before a loan is issued. These details must also be published prominently on fintech websites.
The FCCPC has also reserved the right to periodically review interest rates to prevent exploitative practices. However, the lack of a defined benchmark for what counts as “exploitative” leaves room for regulatory discretion, which may create uncertainty for operators.
Regulatory Overlap with the Central Bank of Nigeria
Not all financial institutions are subject to the same requirements. Banks licensed under the Banks and Other Financial Institutions Act are fully exempt. However, microfinance banks and finance companies, even though they are already regulated by the Central Bank of Nigeria (CBN), must still obtain a waiver from the FCCPC before engaging in digital lending.
This dual oversight introduces regulatory duplication. Microfinance banks already comply with strict CBN rules, adding another approval process could result in inefficiency without delivering proportional benefits to consumers.
Tightened Control of Partnerships and Vendor Relationships
Another striking aspect of the new regulations is the level of scrutiny over partnerships. Digital lenders must now obtain FCCPC approval before entering into agreements related to consumer lending, including vendor contracts. Any amendments to these agreements will also require FCCPC consent. Unauthorized service-level agreements are outright prohibited.
While this move seeks to ensure accountability across the lending value chain, it may also slow down business operations. For fintechs that depend on rapid innovation cycles, the requirement for pre-approval could become a bureaucratic bottleneck.
Approval Timelines and Reporting Demands
The FCCPC has committed to processing complete applications within 30 days. However, it retains discretion to extend the timeline if it chooses, which creates some uncertainty for lenders eager to move quickly in a competitive market.
Compliance does not stop at registration. Lenders and their vendors must submit annual returns that detail lending transactions, consumer interactions, and complaint resolutions. In addition, bi-annual reports must capture transaction numbers, loan values, interest collected, fees charged, and complaint outcomes. The FCCPC also has the authority to demand access to documents at any time, which lenders must provide within 48 hours.
For larger, established companies, these reporting requirements may be manageable. But for smaller fintech startups, the administrative burden could prove overwhelming without significant investment in compliance infrastructure.
Severe Penalties for Non-Compliance
The FCCPC has backed these rules with some of the toughest penalties seen in Nigeria’s fintech sector. Companies found in breach could face fines of up to ₦100,000,000 or one percent of their previous year’s turnover, whichever is higher. Individuals—whether directors, managers, or employees—could face fines of up to ₦50,000,000 and disqualification from holding similar positions for up to five years. Beyond financial penalties, sanctions may include suspension, delisting, or even outright revocation of a lender’s approval.
Such measures are clearly meant to act as a deterrent and align Nigeria’s practices with global standards. However, to be effective, the FCCPC will need to ensure that enforcement is proportionate to the seriousness of violations, rather than becoming a revenue-generation tool.
Consumer-Centric Obligations for Lenders
The regulations also set out strict obligations that redefine how lenders interact with customers. Loan disbursements can only be made upon the explicit request of consumers, eliminating automatic or pre-authorized lending. Data protection rules, in line with the Nigeria Data Protection Act 2023, forbid lenders from accessing sensitive information such as call logs, contact lists, or photo galleries.
Consumer complaints must be resolved within 24 hours. If that is not possible, lenders must communicate a resolution timeline within 48 hours. Channels for lodging complaints must be visible and accessible.
Record-keeping is another area of focus. Lenders must maintain their records for at least five years and produce them within 48 hours when requested by regulators. These provisions strengthen accountability and trust but may stretch the operational capacity of smaller firms.
Striking the Right Balance
The DEON Consumer Lending Regulations 2025 are a bold attempt to professionalize digital lending in Nigeria. They place consumer protection at the heart of lending practices, enforce transparency in loan terms, and introduce severe consequences for misconduct.
Yet, the framework also comes with risks. The combination of steep registration fees, heavy reporting obligations, and dual oversight between the FCCPC and CBN could discourage smaller fintechs from entering or surviving the market. This might unintentionally reduce financial inclusion, leaving consumers with fewer lending options.
For decision-makers, the key takeaway is clear: compliance is non-negotiable. Re-registration must be prioritized, disclosures must be transparent, and complaint-handling systems must be robust. At the same time, there is a strong case for engaging regulators to ensure that enforcement remains fair, proportionate, and supportive of innovation in Nigeria’s fintech sector.
Artificial intelligence (AI) is no longer a passing twenty-first century trend; it has emerged as a defining force that is fundamentally reshaping global economies, transforming industries, and reimagining how organizations operate. Far beyond automating routine tasks, AI is enabling new forms of value creation: powering advanced analytics, enhancing customer experiences, streamlining operations, and unlocking innovative business models. Companies that view AI as a core strategic driver, rather than a peripheral add-on, are positioning themselves to lead in this rapidly evolving landscape.
However, becoming an AI-first organization requires far more than adopting new technologies. It calls for a fundamental rethinking of organizational structures, decision-making processes, and workplace culture to ensure that AI is woven into the very fabric of business strategy. When implemented with clarity, purpose, and accountability, AI can deliver exponential productivity gains, accelerate innovation cycles, and support long-term, sustainable growth. Yet, this transformation must rest on solid foundations of ethical governance, transparency, and responsible use, ensuring that AI functions as a trusted partner to human ingenuity rather than a disruptive force.
The Core Foundations of an AI-First Organization
To move beyond hype and create lasting impact, organizations must build around five interdependent pillars: data, strategy, talent, culture, and governance.
1. Data
High-quality, accessible, and ethically managed data is the raw material for AI. Businesses need robust governance frameworks to ensure data integrity, security, and responsible use, while minimizing risks such as bias and privacy breaches. Well-structured data systems make it possible for AI models to generate reliable insights that can shape better decisions.
2. Strategy
AI must align with the overall vision of the business. This means identifying areas where AI can deliver the greatest impact, integrating these initiatives into long-term goals, and scaling solutions in manageable stages. Without this alignment, AI risks being reduced to isolated pilot projects with limited effect.
3. Talent
An AI-first workforce blends technical expertise with domain knowledge. This involves upskilling employees, hiring specialists, and creating cross-functional teams capable of turning strategy into execution. Middle managers in particular play a vital role in bridging leadership’s vision with operational realities.
4. Culture
A thriving AI-first culture promotes experimentation, collaboration, and continuous learning. Employees are encouraged to see AI not as a replacement, but as a tool that amplifies human potential. Such a culture fosters innovation and adaptability across the organization.
5. Governance Responsible AI deployment requires clear oversight. Establishing ethics boards, monitoring models for bias, and ensuring compliance with regulations build trust both internally and externally. Strong governance reduces risk while safeguarding long-term credibility.
Together, these pillars provide the structure needed to manage complexity and maximize the value AI brings.
Principles for Effective AI Implementation
For organizations to integrate AI successfully, they must follow guiding principles that balance innovation with responsibility:
AI should empower, not replace. Thoughtful integration ensures AI supports human judgment and enhances decision-making, rather than undermining it.
Start small, grow steadily. Pilot AI in specific areas—such as automating routine workflows or improving analytics—before scaling enterprise-wide. Incremental wins build confidence and capability.
Redefine productivity. AI enables outcome-driven work by automating repetitive tasks, reducing errors, and allowing employees to focus on higher-value activities. Success should be measured by results, not hours at a desk.
Use AI to strengthen connections. Beyond efficiency, AI can foster collaboration—whether through real-time communication, shared analytics, or feedback systems that connect teams across functions and geographies.
These principles ensure AI is applied with purpose, building systems that improve performance while preserving human oversight.
Overcoming Barriers: The African Perspective
In emerging markets, particularly in Africa, the shift to AI-first organizations carries unique urgency. While digital economies are expanding, barriers such as limited infrastructure, high internet costs, and fragmented regional integration hinder progress. For example, intra-African data exchange is often more difficult than exchanges with international partners, restricting innovation and trade.
To fully capture AI’s potential, African nations and businesses must collaborate to strengthen regional infrastructure, expand internet access, develop local data centers, and invest in digital skills. With the right policies and investments, AI could transform sectors such as agriculture, healthcare, and finance—unlocking vast economic value while narrowing the global digital divide.
Conclusion
Becoming an AI-first organization is less about technology and more about leadership, mindset, and discipline. With strong foundations, principled implementation, and proactive strategies, businesses can position themselves at the forefront of the AI-driven future.
The journey begins with small, focused steps. Align AI with outcomes, foster collaboration, and ensure governance keeps pace with innovation. For organizations ready to act, AI can serve as a catalyst for unified growth and long-term resilience.
Written by Adeola Osifeko LLB, BL, LLM, ACIS, ABR. She can be reached on 07074453571
The convergence of law and technology is reshaping the global legal landscape, with Virtual Reality (VR) emerging as a transformative tool in common law jurisdictions. From immersive courtroom simulations to advanced dispute resolution platforms, VR is revolutionising how legal professionals learn, litigate, and deliver justice.
In Nigeria, Africa’s largest common law system by population, VR presents a unique opportunity to modernise legal practice, enhance judicial efficiency, and expand access to justice. The Evidence (Amendment) Act 2023 (The Amended Act) has updated Nigeria’s legal framework to accommodate technological advancements, including electronic records and digital signatures, providing a robust foundation for VR’s integration into judicial processes.1 This article explores global VR applications in legal practice, proposes implementation models for Nigeria, and examines the legal and ethical considerations under the amended Evidence Act to ensure VR’s effective adoption.
1. From Gaming to the Gavel: How Common Law Jurisdictions Are Using Virtual Reality
Technology is not merely enhancing legal tools—it is redefining the practice of law. In common law jurisdictions, VR is being integrated into judicial processes, legal education, and evidence presentation, offering valuable lessons for Nigeria.
In June 2022, the UK Ministry of Justice launched a pioneering VR training initiative aimed at improving the capabilities of magistrates and legal aid professionals in managing domestic abuse cases.2 This program formed part of a wider strategy to strengthen the family court system’s approach to domestic violence, aligning with the objectives of the Cafcass Domestic Abuse Learning and Improvement Plan.2B The VR training was designed to deepen participants’ understanding of domestic abuse dynamics and enhance their skills in navigating related legal proceedings.
Similarly, the University of Westminster’s Virtual Courtroom Project, evaluated through the JUSTICE virtual trial experiments, illustrates the transformative potential of VR in legal education and courtroom simulation. These trials enabled jurors, witnesses, and observers to participate in realistic courtroom environments remotely, fostering improved comprehension of courtroom roles, clearer sightlines, and synchronized document viewing. Respondents reported that the VR-enabled interactions closely mirrored the dynamics of physical trials, enhancing both procedural understanding and advocacy skills.3
In the United States, the historic use of VR occurred in the landmark case of State of Florida v. Miguel Rodriguez Albisu on December 14, 2024, when Broward County Judge Andrew Siegel donned an Oculus Quest 2 headset to view a virtual reality simulation of the incident from the defendant’s perspective—believed to be the first time VR was formally introduced into a criminal hearing in American courtrooms. Also, a study by the University of South Australia supports this innovation, showing that VR, through 3D headsets, enhances jury comprehension by immersing them in crime scenes, such as car crashes or violent incidents. Developed with input from legal professionals and law enforcement, these VR simulations improve the precision of evidence presentation, enabling jurors to make better-informed decisions. The increasing use of VR in courtroom settings and legal training highlights its capacity to modernise justice delivery in the digital age—presenting a forward-looking model that Nigeria could adapt and implement.5
These global precedents highlight VR’s versatility in judicial and educational settings. For Nigeria, the Amended Act provides a legal framework for admitting VR-generated electronic records as evidence, facilitating courtroom integration.6
2. Beyond the Bar: VR as a Tool for Legal Education and Continuing Professional Development
VR can democratise legal education in Nigeria, equipping young lawyers with practical skills before they’re assimilated into professional practice. By simulating real-world scenarios, VR addresses disparities in training opportunities across regions.
Globally, legal education is embracing innovation through VR, offering immersive, simulation-based learning experiences that mirror the demands of real-world legal practice. Much like the U.S. shift toward practical skill-building in the NextGen Bar Exam, VR is being integrated into law school curricula to develop key competencies such as advocacy, client counseling, and dispute resolution.
By placing students in curated, role-play scenarios, VR enables them to apply legal principles in dynamic contexts while receiving immediate, iterative feedback. This approach not only reinforces core lawyering skills but also supports the formation of professional identity, helping students see themselves as future practitioners.
As experiential learning becomes central to legal education, VR emerges as a powerful pedagogical tool—enhancing realism, promoting reflective practice, and surpassing traditional, lecture-based instruction in preparing students to meet the complex challenges of modern legal practice.7 These tools provide experiential learning that traditional methods cannot replicate.
In Nigeria, the Nigerian Law School/Continuing Legal Education (CLE) authorities can also leverage VR to standardise training. By partnering with edtech firms, law schools in Yola, Enugu, and Abuja could develop VR-based legal clinics and trial simulations, enabling students to practise advocacy in simulated disputes/trials. The Amended Act 2023 supports this by recognising electronic records, such as VR-generated training materials, as admissible documents, provided they meet authentication requirements.8 This legal backing ensures that VR-based educational tools can be seamlessly integrated into Nigeria’s legal curriculum.
3. Virtual Adjudication: Dispute Resolution in the Age of Immersive Technology
VR’s immersive neutrality can enhance Alternative Dispute Resolution (ADR), litigation, and court processes, particularly in emotionally charged disputes. By creating virtual environments that reduce anxiety and improve focus, VR offers a novel approach to dispute resolution.
The UK Civil Justice Council (CJC) has recommended the adoption of VR to improve the court experience for victims of domestic abuse by providing immersive environments that reduce intimidation and enhance understanding of courtroom procedures. According to BBC, it’s being used to enhance judicial understanding of domestic abuse victims’ experiences in family courts. A VR film titled Through the Eyes of Another, developed by Police and Crime Commissioners from Cleveland, Durham, and Northumbria in collaboration with Teesside University, immerses viewers in the journey of an abusive relationship. The resource, based on real victim testimonies and endorsed by former Supreme Court President Baroness Hale, aims to humanise court proceedings by helping judges and court staff better grasp the psychological impact of abuse. It is described as a transformative, empathetic judicial training tool9 demonstrating VR’s potential to enhance access to justice.
In Nigeria, the Lagos Multi-Door Courthouse (LMDC) and National Industrial Court of Nigeria (NICN) could adopt VR mediation rooms for tenancy disputes or trade, labour disputes respectively. The Amended Act supports this by recognising information in electronic form, such as VR mediation records, as equivalent to written documents, provided they are accessible for subsequent reference.10 Additionally, the Amended Act allows electronically deposed affidavits, facilitating remote VR-based mediation.11 These provisions enable Nigeria to implement VR in ADR, making justice more accessible, especially in remote areas.12
4. Judicial Innovation in Nigeria: From e-Filing to Immersive Justice
Nigeria’s judiciary has recently embraced technology in phases, from e-filing to virtual hearings. VR represents the next frontier in this digital evolution, with the Amended Act providing a legal foundation for its adoption.
Pilot programmes in courts like the Federal High Court or Lagos State Judiciary could test VR in criminal and civil trials. For instance, VR reconstructions could enhance evidence presentation in land/property and construction disputes or accident cases in factories, making complex evidence more accessible to judges. The Amended Act deems electronic records, such as VR-generated simulations, admissible as documents if authentication conditions are met, ensuring their reliability in court.13 Partnerships with LegalTech startups could develop VR-integrated evidence platforms, which aligns with the Amended Act, empowering the Minister of Justice to prescribe conditions for admitting new classes of evidence.14
VR can also address Nigeria’s case backlog by streamlining pre-trial processes. Virtual pre-trial or case management conferences, supported by the provisions of the Amended Act, allow for audio-visual proceedings, which could reduce physical court appearances, saving time and resources.15 The National Industrial Court’s adoption of virtual hearings demonstrates the judiciary’s readiness for VR adoption.
5. Legal and Ethical Considerations: What Must Be in Place for VR to Thrive
VR’s adoption in Nigeria must be grounded in a formidable legal and ethical framework to ensure procedural fairness and public trust. The Evidence (Amendment) Act 2023 provides a starting point, which requires further regulatory clarity needed in areas such as:
Standards for authentication and integrity of VR-based evidence or simulations
Guidelines for admissibility of immersive or reconstructed experiences in court
Judicial protocols for the use of headsets or virtual environments during hearings
Safeguards against prejudicial impact and bias in immersive presentations
Privacy and data protection for individuals involved in VR-based legal education or proceedings
Until such specific procedural rules and evidentiary standards are developed—possibly through amendments to court practice directions—VR’s use in Nigerian legal practice will remain experimental and limited in formal settings.
The Amended Act outlines authentication requirements for electronic records, which implications extend to VR simulations, including verifying digital signatures.16 The rules of Courts must establish guidelines to ensure VR evidence meets these standards, balancing probative value against risks of manipulation. a safeguard crucial for maintaining the security and credibility of VR-generated evidence. 17 In parallel, ethical guidelines must be established—especially for non-litigious uses such as mediation and client consultations—to ensure data privacy, informed consent, and responsible use. Accordingly, the development of certification standards for VR tools, as contemplated by the Act, should include rigorous testing for accuracy, reliability, and neutrality, to prevent unintended bias or unfair influence in judicial outcomes.18
The Nigerian Bar Association (NBA) and National Judicial Council (NJC) should collaborate with technology experts to develop these frameworks, ensuring VR’s integration aligns with Nigeria’s legal and cultural context.
While VR offers transformative potential, its integration into courtrooms raises significant challenges that Nigeria must address to ensure fairness and reliability. The historic use of VR in State of Florida v Miguel Rodriguez Albisu, underscores both the promise and pitfalls of VR evidence.19
A key challenge is ensuring the accuracy and authenticity of VR simulations. As Judge Scott Schlegel noted, “How do we ensure the data used to create these environments is complete and untampered with? What expertise is needed to verify the accuracy of a VR recreation? In Nigeria, courts must establish protocols to validate VR data, aligning with requirement that electronic records meet specific conditions for admissibility.20
Furthermore, expert testimony may be required to authenticate VR simulations, ensuring they are not manipulated to favour one party. Additionally, VR’s immersive nature can evoke strong emotional responses, potentially overshadowing factual evidence and introducing bias. Different viewing angles or headset adjustments may lead to inconsistent interpretations with a judge, complicating fair adjudication.
Practical considerations include accessibility and cost. VR headsets and software require significant investment, which may strain Nigeria’s judicial budget. Ensuring equitable access for all parties, including indigent litigants, is critical to prevent disparities in justice delivery.21 Cybersecurity is another concern, as VR data could be vulnerable to hacking or unauthorized access, necessitating robust protection protocols under authentication requirements of the Amended Act.22
Courts must also train judges, lawyers, and staff to use VR effectively, as inadequate training could undermine its benefits. Nigeria can address these challenges by developing clear admissibility rules, investing in training, and partnering with technology experts to create cost-effective, secure VR solutions.
7. Conclusion: A Call for Strategic Adoption—Leadership from the Bar and the Bench
VR’s integration into Nigeria’s legal system is a strategic imperative to enhance justice delivery in a digitally evolving world. The Evidence (Amendment) Act 2023 provides foundational legal framework for adopting VR, recognising electronic records and audio-visual proceedings as valid components of judicial processes.
The NBA, its sections and fora should integrate VR pilots into CPD programmes, offering workshops to familiarise lawyers with immersive technologies. The judiciary also should conduct VR awareness workshops and sandbox trials to test applications in real-world settings.
At the 19th International Business Law Conference in July, the NBA-SBL featured a fringe show exploring how virtual reality (VR) can be deployed in legal practice. Building on this, the ongoing NBA Conference continues the conversation, with the breakout plenary session on 25 August addressing both the advantages and challenges of deploying VR. Introducing a dedicated “FutureTech and the Law” track in the NBA Section on Business Law’s Annual Conference would further enrich these discussions, providing a structured platform for dialogue on VR’s role in shaping the future of legal practice. By leveraging the Evidence (Amendment) Act 2023, Nigeria can position itself as a promoter of judicial innovation in Africa, ensuring equitable access to justice and preparing legal professionals for a technology-driven future.
Endnotes
1. Evidence (Amendment) Act 2023, ss 84(a)–84(d) & 255.
2B. The Cafcass Domestic Abuse Learning and Improvement Plan, initiated in response to the 2020 Ministry of Justice’s Expert Panel on Harm in the Family Courts report, is a comprehensive strategy by the Children and Family Court Advisory and Support Service (Cafcass) to improve its response to domestic abuse in family court proceedings
8. Mitch Zamoff, ‘The Seven Essential Law School Simulation Courses’ (2024) 2024 Utah L Rev 997. Also find out more about NextGen Bar Exams here: https://nextgenbarexam.ncbex.org/
On June 26, 2025, President Bola Ahmed Tinubu signed into law four significant tax reform bills collectively referred to as “the Reform Acts.” The first, the Nigeria Tax Act (NTA) also called the Ease of Doing Business Act seeks to streamline the country’s previously fragmented tax regulations. Complementing this is the Nigeria Tax Administration Act (NTAA), which seeks to harmonize legal and operational procedures for tax administration across all levels of government: federal, state, and local. The third, the Nigeria Revenue Service Act (NRSA), replaces the existing Federal Inland Revenue Service Act and establishes a more autonomous, performance-driven national tax authority called the Nigerian Revenue Service. Lastly, the Joint Revenue Board Act (JRBA) creates a formal governance structure to improve coordination and cooperation among tax authorities nationwide. These reforms represent one of the most extensive restructurings of Nigeria’s tax system in decades and are set to take effect on January 1, 2026.
The reforms are designed to streamline compliance, promote fairness, and boost revenue collection, while fostering economic growth. At the same time, these new laws signal the beginning of a more complex regulatory environment—marked by increased scrutiny and the need for strategic adjustments by businesses operating in Nigeria. Here’s what technology, fintechs, healthtechs/life sciences & media/creative arts entrepreneurs and business owners should know.
Consolidation, Repeal, and Update of Nigeria’s Tax Laws
As part of the broader goals of the Nigerian Tax Reforms, the NTA consolidates key fiscal laws into one cohesive framework. It repeals and integrates the core provisions of several major tax statutes, including the Capital Gains Tax Act, Companies Income Tax Act, Personal Income Tax Act, Stamp Duties Act, and Value Added Tax Act. Additionally, it introduces amendments to other important laws such as the Petroleum Industry Act and the Tertiary Education Trust Fund (Establishment, etc.) Act. One notable change is the revocation of the 2021 VAT (Modification) Order. The overarching aim is to simplify Nigeria’s tax landscape, reduce redundancies, and promote clarity for businesses navigating the tax environment.
Creation and Role of the Nigeria Revenue Service (NRS)
A significant institutional shift introduced by the reforms is the replacement of the Federal Inland Revenue Service (FIRS) with a newly established Nigeria Revenue Service (NRS). This development, formalized through the NRSA, marks the beginning of a more autonomous and efficiency-driven tax authority. The NRS not only assumes responsibility for tax collection but is also tasked with overseeing the administration of non-tax revenue. The agency is expected to introduce a standardized legal and administrative approach across the country to ensure consistency and improve compliance in revenue collection.
The New Tax Landscape for Businesses
For businesses, several changes will reshape how taxes are paid and managed. A key update is the introduction of a tax on profits from foreign subsidiaries that could have been paid out as dividends but weren’t, affecting Nigerian companies with overseas operations.
Another major shift involves Value Added Tax (VAT). While the rate remains unchanged at 7.5%, the rules around recovery of VAT have been expanded. Businesses can now recover VAT on all purchases, including services and fixed assets, as long as they relate to taxable sales. This reduces costs for businesses offering respite for many companies by lowering overall operating costs.
Additionally, certain essential items i.e goods and services such as basic food, medical products, educational materials, electricity, and non-oil/gas exports are now zero-rated for VAT, meaning businesses selling these can recover VAT costs, improving cash flow and cost savings.
What Individuals and Employers Should Watch
On the individual side, the government has toughened penalties for tax non-compliance. Failing to file tax returns now comes with steeper penalties- ₦100,000 for the first month rising to ₦530,000 in the second month. This puts pressure on both individuals and businesses to meet deadlines and maintain accurate records.
To make dispute resolution easier, a new Tax Ombuds Office has been established. This independent body will help resolve issues between taxpayers and the tax authorities, providing a more accessible avenue for raising concerns and ensuring fairness in enforcement.
Restructuring and Strategic Planning
Companies considering restructuring or expansion—especially those with international operations—should revisit their tax strategy. The new Controlled Foreign Company rules mean that previously untaxed profits abroad may now trigger tax in Nigeria. Businesses with foreign subsidiaries should evaluate how the new tax on undistributed profits impacts financial planning and corporate structure
Additionally, businesses should take advantage of VAT recovery or zero-rated items and review supply chains for compliance.
Administrative Changes and Compliance
The tax administration system is also undergoing structural reform. The Federal Inland Revenue Service (FIRS) has been renamed the Nigeria Revenue Service (NRS), reflecting its enhanced role. Meanwhile, state-level tax agencies are now autonomous, allowing for improved local tax collection and coordination.
The VAT revenue-sharing model has also shifted. The federal government will now receive 10% of VAT revenue, down from 12%, while states will receive 55% and local governments 35%. These adjustments are designed to strengthen local governance and, potentially, improve infrastructure and services that benefit businesses.
A particularly impactful update is the requirement for all businesses to adopt electronic invoicing. This measure is part of a broader push for transparency and digital compliance. To remain compliant, companies will need to update their accounting systems and ensure they meet the new digital standards.
Industry-Specific Impacts
In the financial services sector, the expanded VAT recovery rules are especially beneficial. Banks, insurance firms, and fintech startups can now claim back VAT on purchases that support taxable services, helping reduce overall costs. However, compliance is more critical than ever, with steep penalties for missed filings. The Tax Ombuds Office could prove particularly useful for resolving disputes in this highly regulated industry.
For life sciences and healthcare, the reforms bring immediate cost relief. Medical goods and pharmaceutical products are now zero-rated for VAT, allowing businesses to recover input VAT and make healthcare more affordable. It’s vital for companies in this space to update their tax processes to take full advantage of the changes.
Technology and media companies also stand to benefit. Many digital exports are now zero-rated for VAT, which supports firms serving international markets. The mandatory adoption of e-invoicing aligns well with tech operations but still requires system upgrades and staff training to stay compliant.
Taking Action: What Businesses Should Do Next.
To navigate these changes effectively, businesses should begin by aligning their leadership, operations, and finance teams around a shared understanding of the implications. Key steps include:
Conducting training sessions and strategic reviews to stay current with the evolving tax landscape. It’s also essential to assess the impact on your company’s structure, supply chains, and financial arrangements.
Updating the tax strategy to take advantage of opportunities such as VAT recovery.At the same time, enhance compliance by modernizing accounting systems—especially for electronic invoicing—to meet new reporting and regulatory requirements.
Embracing technology as a critical enabler. Use tools that not only comply with current regulations but are also adaptable to future changes. A robust tax risk management framework will help identify both compliance gaps and potential efficiencies.
Finally, businesses should stay actively informed. Monitor government updates, tax circulars, and implementation guidelines regularly. While the Tax Ombud’s Office provides support, early engagement and proactive compliance remain the most effective ways to minimize both risk and cost.
Final Thoughts
Nigeria’s new tax laws mark a bold step toward modernising the country’s tax system. They create both challenges and opportunities for businesses. Those that take the time to understand the changes, update their systems, and plan ahead will be well positioned to thrive in the new environment commencing in six months time.
Author
Adeola Osifeko LLB,LLM,ACIS,ABR, Principal Partner. She can be reached on adeola@aeolawpractice.com
LegalTech in Nigeria stands at a pivotal inflection point. The 2025 NBA Lagos Annual Law Conference underscored the legal sector’s growing recognition of its structural inefficiencies and its readiness to embrace technology-driven reforms. Coupled with broader macroeconomic shifts—such as foreign exchange reforms and the Central Bank of Nigeria’s banking recapitalization directive—the Nigerian legal landscape now presents a ripe environment for LegalTech innovation.
Opportunities abound in areas such as automating regulatory compliance, improving judicial efficiency, streamlining dispute resolution through ADR platforms, and enhancing accountability across legal institutions. Legal tech startups can align their solutions with these reform trends and engage key stakeholders so that they can be instrumental in shaping the future of legal services in Nigeria.
The regulatory clinic and policy dialogue sessions at the law conference offered actionable insights which can be utilised by legal tech startups, with focus on market entry and exit strategies, investment opportunities, regulatory compliance, risk mitigation, innovation, and stakeholder engagement.
Key Opportunities for Legal Tech Startups
1. Market Entry & Exit
(i) Foreign Exchange Reforms: The CBN’s 2024 FX reforms have curbed capital flight and increased investor confidence. This creates fertile ground for legal tech platforms that facilitate cross-border compliance and transaction management. However, inflation and investment volatility call for solutions that also address domestic market stability.
(ii) Judicial Reform Momentum: The Lagos Judiciary’s acceleration of litigation timelines and push for wider adoption of ADR—estimated to cover 70% of commercial disputes—signals a strong demand for platforms enabling digital mediation, automated case management, and online dispute resolution.
(iii) Regulatory Clinic Insights: The presence of regulatory bodies like the Corporate Affairs Commission, Federal Competition & Consumer Protection Commission, and the Lagos State Lands Bureau highlights the willingness of regulators to interact with the legal and business communities. It also depicts market need for legal tech tools that simplify licensing and compliance processes for professionals and businesses. So much for the pivotal step CAC recently made with the launch of a new artificial intelligence registration portal, which will significantly ease the process of formalising businesses in Nigeria.
2. Investment Opportunities
(i) Equity-Driven Funding Landscape: The shift toward equity investments over debt opens a niche for platforms that support equity crowdfunding, investor matchmaking, and compliance with fundraising regulations—especially for local SMEs and startups.
(ii) Fintech-Legaltech Synergy: With the CBN pushing for banking sector recapitalization, there is an emerging need for tools managing securitization, asset transfers, and standardized documentation—an attractive space for legal-fintech hybrids.
3. Regulatory Compliance
(i) Chartered Institute of Bankers of Nigeria’s ADR Model: In 2023, the CIBN resolved 171 non-litigious banking disputes in debt recovery and recovered ₦544 million. This success presents an opportunity for legal tech startups to develop compliance platforms modelled around non-judicial dispute resolution frameworks.
(ii) Standardization Push: Calls for streamlined judicial documentation and adherence to tighter timelines present opportunities for compliance tech that automates filings, generates court-ready documentation, and tracks procedural obligations.
4. Risk Management
(i) Delays & Documentation Gaps: Persistent judicial bottlenecks arising from manual processes pose risks to commercial time and transactions. Legal tech can bridge this gap through:
Real-time case tracking: Tools that let lawyers and clients monitor case progress online (e.g., court status dashboards).
Automated alerts: Notifications for hearing dates, filing deadlines, or required documents to prevent procedural errors.
Legal risk analytics: AI tools that assess delays or documentation risks in ongoing cases, helping law firms and investors make informed decisions.
Corruption Safeguards: Notable the hardtalk dialogue identified most misconduct stems from support staff than judges, therefore ethics tools—such as whistleblowing apps or integrity-monitoring platforms—can enhance transparency across legal and judicial systems.
5. Innovation Trends
(i) Judicial Tech Adoption: The judiciary’s integration of inverters, digital court recording, and National Judicial Council’s performance tracking shows readiness for tech adoption. Legal tech innovations like LawGPT introduces AI-powered case analysis. We expect more legal tech innovation to provide e-discovery solutions, and analytics dashboards for court systems.
(ii) Digital ADR Platforms: Given that a majority of commercial disputes are ADR-eligible, there’s significant scope for scalable, cloud-based negotiation and mediation platforms tailored to both private and public sector needs.
6. Stakeholder Influence
(i) Bar-Bench Collaboration: The judiciary’s call for closer collaboration with the Bar underscores the value of platforms that enhance communication, training, and feedback between lawyers and judges—accelerating efficiency and accountability.
(ii) Financial Sector Alignment: The involvement of the CBN and financial leaders highlights an appetite for tools that support policy compliance, regulatory reporting, and data analytics—offering legal tech startups the chance to act as strategic partners in financial governance.
Strategic Recommendations for Legal Tech Founders.
Market Entry: Prioritize development of ADR tools, judicial automation, and compliance platforms tailored to Nigeria’s ongoing legal reforms.
Investment Positioning: Emphasize products that integrate fintech capabilities—like securitization management or equity crowdfunding—to tap into recapitalization-driven investor interest.
Compliance Tools: Build solutions that align with CAC, FCCPC, and CIBN frameworks, helping businesses and law firms meet Nigeria’s evolving regulatory standards.
Risk & Ethics Tech: Design AI-powered tools for legal risk prediction and transparent reporting mechanisms to address systemic inefficiencies and ethical concerns.
Innovative Leadership: Focus on scalable, AI-driven solutions in litigation analytics, e-ADR, and digital court performance monitoring to ride the wave of judicial tech integration.
Stakeholder Engagement: Form partnerships with regulators and institutions like the Lagos Judiciary, CBN, and CIBN to co-develop solutions and gain traction in both the legal and financial sectors.
Conclusion LegalTech in Nigeria is transitioning from nice-to-have to must-have. The alignment of legal, financial, and judicial reforms means startups positioned now will define the future of how law is practiced, regulated, and delivered in Africa’s largest economy. Investors have a unique opportunity to back platforms that don’t just automate law—but reshape it.
Author
Adeola Osifeko LLB,LLM, ACIS, ABR, Principal Partner at AEO Law Practice.
The Legal Trove 