What the 2025 Tax Changes in Kenya, Nigeria, Ghana and Zambia Actually Mean for Your Business

In June 2024, thousands of Kenyans stormed Parliament. Not over a war. Not a coup. Over a tax bill.

Students, traders, gig workers and small business owners had had enough. They translated the Finance Bill into local languages, used social media to coordinate, and physically occupied the legislature. At least 65 protesters were killed by security forces. President Ruto went on television and backed down. "The people have spoken," he said.

That moment changed how a lot of African governments think about tax reform. What followed across the continent in 2025 and into 2026 is the most significant wave of fiscal change in a generation. If you run a small business in any of these four countries, here is what actually changed and what you need to do about it.

Kenya: the government came back with something better

After withdrawing the 2024 Finance Bill under pressure, Kenya returned with the Finance Act 2025, signed on 26 June 2025 and effective from 1 July 2025. The tone was different. This was a government that had listened.

The most useful change for small businesses was the VAT registration threshold. It moved from KSh 5 million to KSh 8 million in annual turnover. If your business sits below that line, you no longer have to register for VAT at all. That removes one of the most administratively punishing obligations that had been weighing on micro-enterprises for years.

The daily tax-free per diem allowance for employees jumped from KES 2,000 to KES 10,000. For business owners managing staff who travel for work, that is real relief on take-home pay. Start-ups certified by the Nairobi International Financial Centre Authority also got a reduced corporate tax rate: 15% for the first three years, 20% for the following four.

On the downside, the Act capped tax loss carry-forwards at five years. Previously there was no limit. For capital-intensive businesses that cannot offset losses quickly, particularly in manufacturing or infrastructure, this is a meaningful tightening. The change is worth understanding before the five-year clock starts running on your current losses.

The overall message from Nairobi is one of reform rather than retreat. More measured than what came before, and broadly more protective of the businesses at the bottom of the income scale.

Nigeria: the biggest tax reset in the country's history

While Kenya was rewriting chapters, Nigeria tore up the entire book.

On 26 June 2025, President Tinubu signed the Nigeria Tax Act 2025 alongside three supporting bills covering the revenue service, tax administration, and a new joint revenue board. These laws took effect from 1 January 2026. Together they consolidated over 60 separate tax statutes into fewer than 10. It is the most ambitious fiscal overhaul in Nigeria's history.

The most important change for small businesses is the exemption threshold. Small companies are now defined as those with annual gross turnovers up to NGN 100 million, up from NGN 25 million previously, and total fixed assets not exceeding NGN 250 million. These businesses are fully exempt from Companies Income Tax, Capital Gains Tax, and the new Development Levy. That is a fourfold increase in the exemption line. Millions of Nigerian small businesses that were previously required to file and pay Company Income Tax are now completely outside its scope.

Employees earning NGN 800,000 or less per year, about NGN 66,667 per month, are now exempt from income tax entirely. For larger companies a single Development Levy of 4% on assessable profits replaces several existing charges including the Tertiary Education Tax and the Police Trust Fund Levy.

There is a compliance catch. Banks are now required to report account information to the Nigeria Revenue Service when certain thresholds are crossed: quarterly turnovers above NGN 25 million for individuals, NGN 100 million for companies. For informal cash-based businesses, the walls are closing in by design. The government is using generous exemptions as the carrot to bring businesses into the formal system before enforcement catches up. The smart move is to formalise now and claim the benefits, rather than wait.

Ghana: the E-Levy is gone and that matters a lot

If you run a business in Ghana and you use mobile money, the most important date in 2025 was 2 April. That is the day the E-Levy died.

Finance Minister Dr. Cassiel Ato Forson announced the abolition in the 2025 Budget. "We are committed to putting more money into the pockets of Ghanaians and improving disposable incomes," he told Parliament. The Electronic Transfer Levy Act was repealed with effect from 2 April 2025. Mobile money transfers, covered bank transfers, and other electronic transactions are no longer subject to the 1% levy.

This is not just a small cost saving. The E-Levy had been actively discouraging mobile money adoption since 2022, which was exactly the opposite of what Ghana needed. Removing it is an immediate, tangible win for every trader and merchant whose daily business runs through a mobile wallet. Transaction volumes had dropped noticeably after the levy was introduced. That should reverse.

The same reform package abolished the 10% withholding tax on bet winnings and gaming, the 1.5% withholding tax on unprocessed gold from small-scale miners, and the Emissions Levy on vehicles and industries. A VAT reform process is underway, with a task force working on simplification and a plan to raise the registration threshold to keep micro and small businesses out of the VAT net.

For Ghanaian SME owners, 2025 was a good year on the policy front. Lower transaction costs, simplified compliance, and a government that appears to have learned the same lesson as Kenya.

Zambia: tightening compliance, expanding the base

Zambia took a different approach. Rather than headline tax cuts, the reforms focused on building compliance infrastructure and pulling more of the informal economy into the formal system.

The turnover tax threshold moved significantly. Turnover tax now applies to businesses with annual turnover up to ZMW 5 million, up from ZMW 800,000 previously, at a rate of 5%. This keeps micro-businesses within a simpler tax system and out of the full VAT regime, which is the right direction.

But there are two changes that require immediate attention if you are a VAT-registered business in Zambia.

First, as of 1 January 2025, an advance income tax of 15% applies to remittances and exports exceeding USD 2,000 for transactions made without a valid Tax Clearance Certificate. If your business moves money across borders or exports goods and your paperwork is not in order, this hits your cashflow directly.

Second, also from 1 January 2025, input tax claims are now restricted to invoices issued through the Smart Invoice system, or invoices from suppliers specifically exempted from using it. If you are claiming input VAT and you are not yet on Smart Invoice, you are at risk of losing that right entirely. This is not a future concern; it is current.

The 2026 National Budget, presented in September 2025, continues the theme of formalisation. At ZMW 253 billion it is 17% larger than the initial 2025 budget, with domestic revenue targeted at 22.3% of GDP. A study of SMEs in Lusaka found that 59% reported decreased profitability as a result of the 2025 corporate tax reforms, with rising administrative burden cited as a key driver. The government needs to keep investing in simplification alongside enforcement.

What to actually do right now

The pattern across all four countries is the same. Governments are broadening their tax bases and using digital infrastructure to see businesses that were previously invisible. They are also offering real concessions to make formalisation worthwhile. The businesses that benefit are the ones that act early, not the ones that wait for enforcement.

In Nigeria, if you earn under NGN 100 million annually, make sure your records can prove it. The exemption is only real if you can claim it. In Ghana, the removal of the E-Levy makes mobile money the cheapest it has been in three years; if you were avoiding it because of the cost, that reason is gone. In Kenya, check whether you still need to be VAT-registered under the new KSh 8 million threshold; many businesses no longer do. In Zambia, if you are VAT-registered and not yet on the Smart Invoice system, that is your most urgent task right now.

Finance bills used to be documents that only accountants read. In 2024, a generation of young Africans proved they affect everyone and that ordinary people will fight when they get it wrong. Governments noticed. The question now is whether small business owners across the continent are paying equally close attention to what those governments have written next.

MOMO LENS helps African SMEs stay on top of their finances, from daily sales tracking to records that make tax season less painful. Download the app and manage your entire business from your phone, with or without internet.

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