New Nigeria Tax Law 2026: Simple Q&A for Individuals & Small Businesses

Nigeria's New Tax Law (2026): Your Simple Guide to What's Changing.

Confused about Nigeria's new tax law starting in January 2026? You're not alone. With so much information circulating, it's hard to know what's true.

This guide breaks down the key changes in simple Q&A format, focusing on what matters most to individuals, small business owners, freelancers, and remote workers.

⚠️ Important Disclaimer: Please Read First

The information below is based on available public details about the new tax act. Tax laws are complex and can be interpreted in different ways. This article is for informational purposes only and does not constitute professional financial or legal advice.

You are responsible for:

· Conducting your own research.

· Consulting with a qualified tax professional or accountant.

· Verifying details with the Federal Inland Revenue Service (FIRS) / Nigeria Revenue Service or your state tax authority.

🔍 Key Questions Answered about the New Tax Law

1. Who needs to pay tax?

· Yes: All individuals earning income in Nigeria (salaried workers, traders, content creators, influencers, remote workers).

· Yes: Nigerians who are tax residents in Nigeria but earn income abroad.

· No: Students with no income, individuals earning below ₦800,000 per year, or those on the national minimum wage.

2. Will my bank transfers and savings be taxed?

· No. Moving your own money between accounts (transfers, deposits, withdrawals) is not a taxable event. The tax is on your income (salary, business profit), not your savings.

3. Are loans and pensions taxed?

· Loans: No. Money you borrow is not income, so it's not taxed.

· Pensions: No. Approved pension and retirement benefits are tax-exempt.

· Military Salaries: No. Salaries of military officers are now tax-exempt.

4. What about side incomes like crypto and shares?

· Crypto & Digital Assets: Yes. Profits from trading cryptocurrencies, NFTs, and other digital assets are now taxable.

· Shares: Mostly No. Gains from selling shares are tax-free unless the shares are worth more than ₦150 million or the gain is above ₦10 million.

5. I run a small business. What should I know?

· Tax Exemption: Companies with a turnover below ₦50 million are exempt from Company Income Tax.

· Agricultural Incentive: New agricultural companies get a 5-year tax holiday.

· Business Structure Matters:

  · If registered as a Business Name, you pay Personal Income Tax.

  · If registered as a Limited Liability Company, you pay Company Income Tax.

6. What are the new income tax rates?

The new system uses progressive tax bands, meaning you pay a higher rate only on income within each bracket.

Income Per Year Tax Rate

First ₦800,000 0%

Next ₦2,200,000 15%

Next ₦9,000,000 18%

Next ₦13,000,000 21%

Next ₦25,000,000 23%

Above ₦50,000,000 25%

Example: If you earn ₦6 million a year and claim rent relief, your tax could be lower than under the old law, increasing your take-home pay.

7. What new reliefs or benefits are available?

· Rent Relief: You can claim 20% of your annual rent as a deduction (capped at ₦500,000). You must declare the actual rent paid with proof.

· Foreign Income: Dividends, rent, or royalties brought into Nigeria through official banking channels are tax-exempt.

✅ Final Word

While change can be unsettling, understanding the new rules is the first step to staying compliant and managing your finances effectively. The key takeaway is that the system aims to be more progressive, potentially benefiting low and middle-income earners while tightening regulations on digital assets and high-value transactions.

Your Next Step: 

Use this guide as a starting point. Then, consult a tax advisor to understand how these changes specifically affect you and your business.

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