Nigeria's New Tax Laws: What Changed in 2026 for Workers and Small Businesses

In June 2025 the President signed four laws that rewrote how tax works in Nigeria: the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service (Establishment) Act 2025 and the Joint Revenue Board (Establishment) Act 2025. The main rules took effect on 1 January 2026.

The Nigeria Tax Act brings most federal tax rules into one law. It repealed older laws such as the Personal Income Tax Act, the Companies Income Tax Act, the Capital Gains Tax Act, the Stamp Duties Act and the Value Added Tax Act. The Federal Inland Revenue Service is now called the Nigeria Revenue Service (NRS).

If you earn a salary

The first ₦800,000 is tax free

Your yearly taxable income is now taxed in these bands:

• First ₦800,000: 0%
• Next ₦2.2 million: 15%
• Next ₦9 million: 18%
• Next ₦13 million: 21%
• Next ₦25 million: 23%
• Above ₦50 million: 25%

People who earn the national minimum wage or less do not pay income tax.

Rent relief replaces the old consolidated relief allowance

The consolidated relief allowance is gone. In its place, if you pay rent for the home you live in, you can claim relief of 20% of your yearly rent, up to a maximum of ₦500,000. Keep your tenancy agreement and rent receipts, because you may need them to claim it.

Income from abroad

If you are resident in Nigeria for tax purposes, your income from anywhere in the world is taxable here. This matters for remote workers paid in foreign currency. Residence depends on things like where your permanent home is and whether you spend 183 days or more in Nigeria in a year.

Bank transfers and your Tax ID

₦50 on transfers of ₦10,000 and above

The old ₦50 electronic transfer levy is now a stamp duty. Since 1 January 2026 it is paid by the sender on transfers of ₦10,000 or more. Salary payments and transfers between your own accounts are exempt.

Your NIN works as your Tax ID

Anyone who earns taxable income needs a Tax ID. For individuals, the National Identification Number (NIN) serves as the Tax ID, and for registered businesses the CAC registration number does. The tax authorities have said that no one will be shut out of their bank account simply for not having a separate Tax ID.

If you run a small business

Small companies pay no company income tax

A small company pays no company income tax, no capital gains tax and no development levy. To qualify, the company's fixed assets must not be more than ₦250 million and its yearly turnover must be under the limit set in the law. Published summaries disagree on that turnover limit (some say ₦50 million, others ₦100 million), so confirm your position with a lawyer or tax adviser before relying on it. Companies that provide professional services do not qualify.

Larger companies

Other companies pay company income tax at 30% and a new development levy of 4% of assessable profits. The development levy replaces several older levies, including the tertiary education tax.

VAT

VAT stays at 7.5%. Basic food items, medical and pharmaceutical products, and school tuition and educational books are zero rated, so no VAT is charged on them.

Selling shares, property or crypto

Companies now pay capital gains tax at 30%, and individuals pay it at their income tax rates. Selling the home you live in is exempt. Gains on shares are exempt where your total sales in a year are under ₦150 million and your gains are not more than ₦10 million. Gains on crypto and other digital assets are taxable, and the NRS issued guidelines on taxing virtual assets in 2026.

What about tax for 2025?

Transition guidelines issued in June 2026 say that periods which ended before 1 January 2026 are dealt with under the old laws. So tax on your 2025 income is still worked out under the old rules.

What to watch

In September 2026 the Federal Government began a review of the new tax laws, which is expected to lead to a Finance Bill in 2027. Some rules, such as VAT thresholds and withholding tax, may change. We will update this article when they do.

What you should do now

• Check your payslip to confirm your employer is applying the new bands and your rent relief
• Keep your rent receipts and tenancy agreement
• Make sure your NIN details are correct and linked to your bank accounts
• If you run a business, confirm with a lawyer or tax adviser whether it counts as a small company