20 Things to Know About Nigeria’s New Tax Regime

By Lawal Dahiru Mamman,

The new Nigerian tax regime was formally proposed on October 3, 2024, when President Bola Ahmed Tinubu transmitted the Tax Reform Bills to the National Assembly.

Following heated debates by various stakeholders across the country and passage by the National Assembly, President Tinubu signed the bills into law on June 26, 2025.

The new regime took effect on January 1, 2026, and is governed by four new Acts that consolidate over a dozen existing federal tax laws. These Acts are The Nigeria Tax Act (NTA); The Nigeria Tax Administration Act (NTAA); The Nigeria Revenue Service (Establishment) Act (NRSA); and The Joint Revenue Board (Establishment) Act (JRBA)

Despite controversy surrounding the law, several key aspects are noteworthy. Economic Confidential breaks down key points to know about this new tax law:

1. Taxable Income: Applies to individuals earning income in Nigeria, including workers, content creators, remote workers, influencers, and traders. This means tax will paid on earnings, regardless of where an individual works.

2. Foreign Income: Nigerians earning income abroad will pay tax in Nigeria if they are tax residents, based on the 183-day rule. This closes a loophole for digital nomads and remote workers. This is particular if the country where the international organisation is based exempts a worker’s salary under a treaty or diplomatic arrangement.

3. Bank Transactions: Transfers and deposits are not taxable; only earned income is taxed. So, savings and bank balances are safe.

4. Bank Balances: Money in bank accounts is not taxed as widely perceived. Only incomes earned are taxable.

5. Students: No tax if no taxable income. Students are exempt if they don’t have any income.

6. Businesses: Sole proprietorship or one-man businesses pay personal income tax if registered as an enterprise business name while limited liability companies pay company income tax.

7. Shares: Profit from selling shares under 150 million is not taxed if gain is under 10 million. This part is to encourages investment in the country.

8. Pensioners: Approved pension benefits are exempt from tax. Pension funds and assets are also tax-exempt.

9. Military Salaries: Military personnel who put their lives on the line to keep Nigeria safe are exempt from paying tax on their salaries.

10. Creatives: Foreign income now taxable. Digital creators and influencers will pay tax on global earnings.

11. Crypto Gains: Profitable crypto, Non-Fungible Token (NFT), and digital asset transactions are taxed. This includes gains from selling cryptocurrencies.

12. Exemptions: Individuals earning national minimum wage or less, and those earning below 800,000 annually, are exempt.

13. Progressive Tax Bands: This represents percentage of tax to paid on taxable income.

• 0-800,000: 0%
• 801,000-3 million: 15%
• 3-12 million: 18%
• 12-25 million: 21%
• 25-50 million: 23%
• 50 million+: 25%

14. Agricultural companies will enjoy 5-year tax holiday from the date they begin operation.

15. All bonds from government are exempt from tax.

16. Rent relief: Individuals can claim rent of 20% of annual rent paid, but this is capped at N500,000.

17. Small companies or businesses under N50 million turnover are exempt from taxes.

18. Foreigners in startup firms, tech companies or creative arts industry whose income are already taxed in their home countries will not be taxed in Nigeria under the new law.

19. Loans are not taxable however, interest earned by lenders will be taxed.

20. Disability pensions for injured officers and other members of the armed forces are exempt from tax.

Some other key points include:

4% Consolidated Development Levy: Replaces four separate levies, funding education, student loans, technology, and security.

VAT: Remains at 7.5%, with zero-rated and exempt items expanded.

Small Businesses: Exempt from Companies Income Tax, Capital Gains Tax, and Development Levy if turnover is below 50 million.

Penalties: Stiffened for non-compliance, including fines and imprisonment hence tax authorities will monitor bank accounts of businesses more closely.