₦airaland Forum

QUESTIONS & ANSWERS ON THE NEW NIGERIA TAX LAW

Summary from the Nigeria Tax Act, 2025 (Official PDF)
(SPECIFIC FOCUS ON INDIVIDUALS AND SMALL BUSINESSES)

🟢 Q1:
When will the new Nigeria Tax Act take effect?
A1: The new Nigeria Tax Act takes effect from 1st January 2026.

🟢 Q2:
Which specific individuals does the Nigerian Tax Law apply to?
A2: It applies to all individuals who earn income in Nigeria (workers, content creators, remote workers, influencers, traders, etc.) and to Nigerians earning income abroad if they are tax residents in Nigeria.

🟢 Q3:
Will transfers and deposits into my bank account be taxed?
A3: NO. Moving money around (via POS, transfers, deposits, or withdrawals) is not a taxable event. What is taxed is income earned.

🟢 Q4:
Will the money I KEEP in my bank account be taxed from 2026?
A4: NO. Just having money in your account is not taxable. Only the income you earn (salary, business profits, or interest) can be taxed.

🟢 Q5:
I’m a student with no job. Will I pay tax in 2026?
A5: NO. If you have no taxable income, you won't pay tax.

🟢 Q6:
Will tax authorities now monitor bank accounts of businesses more closely?
A6: YES. It will be easier for authorities to track compliance. Your bank balances will not be taxed; profits and income are.

🟢 Q7:
Will I pay tax on the loan I borrow from Fairmoney or any lender?
A7: NO. Loans are not taxable since they are not income. Interest income earned by Fairmoney will be taxed in their hands.

🟢 Q8:
I run a one-man business. Do I pay personal income tax or company income tax?
A8: If registered as an enterprise (business name), you pay Personal Income Tax. If registered as a limited liability company, you pay Company Income Tax.

🟢 Q9:
If I sell shares and make a profit, will I pay tax in 2026?
A9: NO. If shares sold are not more than ₦150 million and gain not above ₦10 million. Above this, the gain is taxable.

🟢 Q10:
I am a pensioner. Will my pension income be taxed in 2026?
A10: NO. Approved pension and retirement benefits are tax-exempt.

🟢 Q11:
Are military salaries taxable?
A11: NO. Salaries of military officers are tax-exempt.

🟢 Q12:
Do creatives (authors, musicians, sportsmen) still enjoy tax exemptions on foreign income?
A12: NO. They must pay Nigerian tax on income earned both within Nigeria and abroad.

🟢 Q13:
Are crypto gains taxable?
A13: YES. Profits from crypto, NFTs, and other digital assets are taxable.

🟢 Q14:
Who is exempt from personal income tax?
A14: Individuals earning the national minimum wage or less, or below ₦800,000 annually.

🟢 Q15:
What are the new progressive tax bands?
A15:
First ₦800,000 @ 0%
Next ₦2.2m @ 15%
Next ₦9m @ 18%
Next ₦13m @ 21%
Next ₦25m @ 23%
Above ₦50m @ 25%

🟢 Q16:
If I get a big severance package when leaving my job, will I pay tax on it?
A16: No tax if ₦50 million or less. Above that, taxed using the progressive tax bands.

🟢 Q17:
If I earn dividends or rent from abroad, will Nigeria tax it?
A17: Dividends, interests, rent, and royalties earned from outside Nigeria are exempt if brought through approved channels (banks).

🟢 Q18:
If a soldier or armed forces member gets injured and receives a disability pension, will it be taxed?
A18: NO. Disability pensions are completely tax-exempt.

🟢 Q19:
My uncle wants to start an agricultural company next year. Will it be taxed in Nigeria?
A19: NO. Agricultural companies (crops, livestock, forestry, dairy, cocoa processing) enjoy a 5-year tax holiday from start.

🟢 Q20:
Is income from Federal or State Government bonds taxable?
A20: NO. All government bonds are tax-exempt.

🟢 Q21:
What does rent relief entail under the new tax law?
A21: From 2026, individuals can claim rent relief of 20% of annual rent paid, capped at ₦500,000. Must declare actual rent to the tax authority.

🟢 Q22:
I earn ₦6m yearly. Will I be better off under the new tax law?
A22:
Old law:
CRA = 20% of ₦6m (₦1.2m) + ₦200k = ₦1.4m
Taxable income = ₦6m − ₦1.4m = ₦4.6m
Total tax = ₦896,000

New law:
Rent relief = ₦500k
Taxable income = ₦6m − ₦500k = ₦5.5m
Applying new bands:
First ₦800k @0% = 0
Next ₦2.2m @15% = ₦330k
Remaining ₦2.5m @18% = ₦450k
Total tax = ₦780k, saving ₦116k

🟢 Q23:
If my company's turnover is below ₦50 million, will I pay tax?
A23: NO. Small companies with turnover < ₦50m are tax-exempt.

🟢 Q24:
As a remote worker in Nigeria for an international organisation, will I pay tax?
A24: YES. You pay tax in Nigeria unless exempted by treaty/diplomatic arrangement.

🟢 Q25:
Will a foreigner earning a salary in Nigeria be taxed?
A25: NO. If employer is a start-up or operates in tech/creative arts, and income is taxed in country of residence.

Source:
https://irs.gm.gov.ng/docs/national/NIGERIA_TAX_ACT_2025.pdf

You want to tax income on people who earns less than 600 dollars per year

When poverty lines is 3 dollars or 1095 dollars per year

No body earning below 3500 dollars should pay tax in Nigeria none

End this useless Tinubu tax law
Or feel d wrath of God

U cannot Tax poverty

You should pray to God so you can be part of those bordered with how to pay tax. Not thanking God that you are tax exempted

You can't easily wake a man pretending to sleep. Most of the people don't want to understand it. They want it to fail, they want to use misinformation to see if it can fail, or if they can cause problems or riots with it. Poor man pikin dey middle dey fight for big man tax.

Dangote companies paid over N450billion tax in 2024.

Otedola firms paid over N40billion ( verifiable one )

Abdulsamad companies paid over N50billion.

Emeka Offor.... Tony Elumelu,.... Moniepoint, OPay, Wale Adenuga among others pay taxes in tens of billions of Naira annually...

Without them Nigeria economy will collapse.

Everyday they give President Tinubu thumbs up for the adequate utilization of their tax....

But those who don't have more than N500 in all their bank accounts combined And stay online all day from celebrity giveaways Are the ones complaining of being overtax....

Those who are liability to Nigeria are the empty barrels online on tax reforms.

FG of Nigeria survives on the tax of Nigeria billionaires not peasants...

The reason the new tax law seeks to remove all the peasants in Nigeria from paying shishi as tax, So that the billionaires evading tax don't use them as anti tax crusaders....

Mr President should set up an agency to display the account statement of anyone complaining of being overtax to expose the liabilities Nigeria should Dis-Nationalize...

Those Empty barrels that deserved dis-nationization are the reason

hmm, this new tax law get as e be.

This tax law is just to target oil and Gas workers

First ₦800,000 @ 0%
Next ₦2.2m @ 15%
Next ₦9m @ 18%
Next ₦13m @ 21%
Next ₦25m @ 23%
Above ₦50m @ 25%

Nigeria’s new 2026 Personal Income Tax law has been widely discussed, but it’s worth looking beyond the big numbers to understand who really benefits. The first ₦800,000 of annual income is completely tax-free, which provides significant relief for low-income earners and ensures that most Nigerians keep more of their money.

For middle-income earners, the tax bands rise progressively: 15% on the next ₦2.2 million, 18% on the next ₦9 million, and 21% on the next ₦13 million. While these rates are structured to be progressive, they may still feel heavy for those in the middle class, especially given Nigeria’s inflation and cost of living.

High earners are taxed at 23% and 25%, but these brackets only affect the wealthiest Nigerians. The system is designed to shift the tax burden to those most able to pay, which is fair in principle.

Overall, the law clearly favors ordinary citizens and protects low-income earners, but middle-class earners may still experience pressure. Its success will depend on effective enforcement and ensuring that informal sector incomes are also captured.

This is a step toward a more progressive tax system, but real relief will only matter if the government implements it fairly and maintains adjustments for inflation over time.

Paying tax is not an issues to most Nigerian, utilising thr money well is what is giving Nigerians big problem, without being embezzled...

The past tax the few have been paying are all being embezzled, now they want to collect from all Nigerians, which is double money to loot and pay their data boys to lie to the media and defend their ineptitude

The way people just dey fear unnecessary makes me wonder the way we understand things in this country. Even some enlightened people are also misleading or causing many to fear.
Banks are not even empowered to take tax from you. Your bank will not deduct tax from you.
Even if I move money from one of my bank account to another without any description nothing will happen since it's my own money.
You see people sending 2k, 5k with some funny description 🤣🤣. But to be serious these are not the persons that they are after with all these tax matter.
Nigeria does not have the system to monitor people's business and to tax them. It's only throw whistler blowing that EFCC can even act more.

99thEnemy:
Source:
https://irs.gm.gov.ng/docs/national/NIGERIA_TAX_ACT_2025.pdf

Ok
Now I've learnt a thing or two about this taxation thing.......

You want to collect income tax from people who have no income?

Tinubu and french president are criminals

mrvitalis:
You want to tax income on people who earns less than 600 dollars per year

When poverty lines is 3 dollars or 1095 dollars per year

No body earning below 3500 dollars should pay tax in Nigeria none

Is that how you heard it's done in saner clime, or that's what that lambarism croner promised you?

Can you intelligently say how much the person earning $600 was paying as tax before, and how much such person is to pay now? All these ignorance over what?

People wey no get understanding go still come hia to wail.
see some above and more to come below
Jagaban until 2031.
Jagaban borgu
Dike-Si-Mba 1

There's no big deal in this tax law. All developed countries pay tax. Nigerians don't want to pay tax but want development.

Op.

Check question 23.

The turnover less than #100m is not taxable

Tax is not bad but government that is taxing citizens to what extent has it satisfied her citizens?

Eniolohunda:
There's no big deal in this tax law. All developed countries pay tax. Nigerians don't want to pay tax but want development.

I just need to break this down here because what you don't understand you will keep being misled.

A tax is money the government collects from people, businesses, or things you buy, to pay for public services like roads, schools, hospitals, and electricity.

Many Nigerians think only people with salaries pay tax because income tax (PAYE) is very visible, it comes straight off your paycheck. But in reality, everyone pays indirect taxes whenever they buy goods, fuel, food, use electricity, phone, or travel. The “hypocrisy” comes from the fact that government talks about income tax more because it’s easy to track, while indirect taxes are hidden in prices, so it feels like the poor or informal workers aren’t paying anything when they actually are.

What annoys me is the japa people that go abroad and yap about taxes. They want Nigeria to have the same western style. If you play with taxes abroad, you'll be shown the way out in the next election and you should also understand the white man and why he does things in a way. When you understand their history, you'll know why we are not the same.

Some countries really do not charge personal income tax at all meaning residents don’t file annual income tax returns like in the UK/US and don’t pay tax on their salaries. Examples include United Arab Emirates (UAE), Saudi Arabia, Qatar, Kuwait, Bahrain, Bahamas, Cayman Islands, Monaco, Brunei and Vanuatu, among others. These countries still get money for government services through oil, trade, fees, or other taxes, not by taxing individual salaries. Do the maths and tell me one thing in common Nigeria has that some of these countries have. These countries fund government spending through other sources such as oil and gas revenues, corporate taxes, import duties, fees, tourism income or VAT/sales taxes, instead of taxing people’s income directly.

You need to get off this obsession with the west and trying to be like who you are not. This is the miseducation of the average African. Don't forget that in Aba and Ogun State, Women fought the imposition of taxes by the British. Many Nigerians don't even study their history. You should go and read why they didn't want the colonial government collecting taxes from them.


Historically, Western heavy taxation grew partly from scarcity and because they needed money to fund armies, wars, infrastructure, and administrative systems. Land and resources were limited, populations were growing, and scarcity of money made taxes necessary. Scarcity also came from their harsh climates, poor harvests, and limited technology, so the state had to extract more from people to survive and provide basic service, sunlike in some African systems, where wealth was shared communally rather than extracted as formal taxes. When you look at it today, the concept of Black Tax is because in Africa, we share the resources with the rest of us Ubuntu style. Learn why things are the way they are. Today, I see people teaching financial wealth and I laugh when they want us to copy westerners and their form of selfish indiduvual finance.


The day Nigerians wake up to know their rights and why the government cannot just squander their money, they will wake up.

@ Q23

The turnover limit for small limited liability company for tax exemption is N100 millions according to Taiwo Oyedele.

I think it was changed from N50million to N100million

banom:
You want to collect income tax from people who have no income?

Tinubu and french president are criminals

Lol, evidently you don't know ANYTHING about the tax reform.

Truth is that this thing has been in existence for a while now.

I mean I have been paying tax on interests for the whole of last year.

Eniolohunda:
There's no big deal in this tax law. All developed countries pay tax. Nigerians don't want to pay tax but want development.

Reposted from the thread:
No Tax If You Are Earning Below ₦800k Annually
https://www.nairaland.com/8591409/no-tax-earning-below-800k/3#137990000

DoTheNeedful:
Many of you that criticize do so either maliciously or due to ignorance.

Our tax collection rate in Nigeria is one of the poorest even in Africa. The understanding of tax by Nigerians terrible. Many of you need to get it into your heads that tax payment is vital for any society to thrive.

Many of you are also disingenious when you make it seem like Nigerians don't pay many indirect taxes. Some people think Nigerians do not pay tax, so they focus mainly on income tax, but this view is not correct and misleading.

When people buy goods and services, they pay Value Added Tax (VAT), fuel levies, customs duties on imported items, and other indirect taxes. These taxes are built into prices, so everyone pays them whether they are employed or not. The taxes you pay for your government's negligence on providing 24/7 electricity is huge. When government NEPA fails and you buy fuel for your generator, you are still paying tax. When you receive electricity bills with VAT and charges, you are paying tax.

Everyday Nigerians pay indirect taxes when they buy food and household items (VAT), buy fuel or take transport (fuel levies), make phone calls or use data (telecoms levies), buy imported goods - fashion wigs, cars, phones, or spare parts (customs and import duties), stay in hotels or eat at restaurants (consumption and hotel taxes), watch movies or attend events (entertainment tax), send money or sign agreements (stamp duties), pay rent or utility bills (environmental and waste levies), and even when transport fares rise because taxes are built into costs, all without being directly told they are paying tax. You pay for higher cost of food because the transportation cost already takes the taxes into delivery. If you have a shop, you pay market levies, these are all taxes. You pay LAWMA or PSP, read the fine print. Those touts that stop buses are collecting money. That money is tax! Anything due, levies, fees is tax. When you ask yourself where the money is going to, if it is going to government, even if it is collected by a consultant, it is TAX. The money you will pay for tinted permit is a tax. I attached an image here to show you how much those boys collect on the road and why MC Oluomo can be powerful. They are now saying that state governments should ban such collection of taxes on the road.


The government focuses more on income tax because it is easier to track formal workers and businesses under the Pay-As-You-Earn (PAYE) system. A large part of Nigeria’s economy is informal, making direct income tax collection difficult. As a result, indirect taxes often contribute significantly to government revenue, even though many people are unaware they are paying them.

In 2023, Nigeria collected about ₦3.64 trillion in VAT (indirect tax ≈ 43%) and ₦4.89 trillion in company income tax (direct tax ≈ 57%), based on NBS-reported figures.



The people are not yet ready to demand accountability that's why they are not worried with taxes, they will adjust because once again, the Ubuntu style will take care of their problems. Playing with taxes can cost you elections in the abroad but again, there's no accountability. Have you seen how our politicians are boasting today with how they are wasting our public money with frivolous things? Wike just accused Makinde of pocketing 50bn while he has houses abroad and some people are redefining riches because he served as Governor?

99thEnemy:
Source:
https://irs.gm.gov.ng/docs/national/NIGERIA_TAX_ACT_2025.pdf

Fantastic information.

No 23 needs some correction.

It is actually 100m and not 50m.

I still give your post a 9.9 out of 10.

SixSeven:
I just need to break this down here because what you don't understand you will keep being misled.

A tax is money the government collects from people, businesses, or things you buy, to pay for public services like roads, schools, hospitals, and electricity.

Many Nigerians think only people with salaries pay tax because income tax (PAYE) is very visible, it comes straight off your paycheck. But in reality, everyone pays indirect taxes whenever they buy goods, fuel, food, use electricity, phone, or travel. The “hypocrisy” comes from the fact that government talks about income tax more because it’s easy to track, while indirect taxes are hidden in prices, so it feels like the poor or informal workers aren’t paying anything when they actually are.

What annoys me is the japa people that go abroad and yap about taxes. They want Nigeria to have the same western style. If you play with taxes abroad, you'll be shown the way out in the next election and you should also understand the white man and why he does things in a way. When you understand their history, you'll know why we are not the same.

Some countries really do not charge personal income tax at all meaning residents don’t file annual income tax returns like in the UK/US and don’t pay tax on their salaries. Examples include United Arab Emirates (UAE), Saudi Arabia, Qatar, Kuwait, Bahrain, Bahamas, Cayman Islands, Monaco, Brunei and Vanuatu, among others. These countries still get money for government services through oil, trade, fees, or other taxes, not by taxing individual salaries. Do the maths and tell me one thing in common Nigeria has that some of these countries have. These countries fund government spending through other sources such as oil and gas revenues, corporate taxes, import duties, fees, tourism income or VAT/sales taxes, instead of taxing people’s income directly.

You need to get off this obsession with the west and trying to be like who you are not. This is the miseducation of the average African. Don't forget that in Aba and Ogun State, Women fought the imposition of taxes by the British. Many Nigerians don't even study their history. You should go and read why they didn't want the colonial government collecting taxes from them.


Historically, Western heavy taxation grew partly from scarcity and because they needed money to fund armies, wars, infrastructure, and administrative systems. Land and resources were limited, populations were growing, and scarcity of money made taxes necessary. Scarcity also came from their harsh climates, poor harvests, and limited technology, so the state had to extract more from people to survive and provide basic service, sunlike in some African systems, where wealth was shared communally rather than extracted as formal taxes. When you look at it today, the concept of Black Tax is because in Africa, we share the resources with the rest of us Ubuntu style. Learn why things are the way they are. Today, I see people teaching financial wealth and I laugh when they want us to copy westerners and their form of selfish indiduvual finance.


The day Nigerians wake up to know their rights and why the government cannot just squander their money, they will wake up.

Can you intelligently explain how the former tax laws are better than the new?

Eniolohunda:
There's no big deal in this tax law. All developed countries pay tax. Nigerians don't want to pay tax but want development.

What an irony....

"Nigerians don't want to pay tax but want development "

If Nigerians are forced to pay tax but see no development, what do we call that?

Thievery??

This new tax system will help to put an end to duplicity and multiplicity of payments that are prevalent in the old system. I totally agree with Tinubu on dis new tax system. Many people are intentionally feigning ignorance because of bitterness and hatred for Tinubu. Ask them to give reasons, the old tax law is better than the new tax law. They will start speaking aimlessly. Bitterness has done them great damage. Let's remember them in prayers.

herald9,
permit me to understand you properly. i understand you've been banned for inability to properly express yourself like an educated person. Are you saying only people employed by the government should be taxed?

Does anybody still understand this? The more they explain the more confusing it becomes.

Don’t get bothered this tax is lower than what we use to pay 2025 this new one. Is that rich people will pay more and poor people no tax average income less tax


B4 all
Categories pay tax now poor people can breathe

pipu still dey FEAR .

GTB what's the 1787k una dey deducted from my Aza for? Same thing last Tuesday . I was debited twice for inter Bank transfer .


Una paaapa

Image123:
Can you intelligently explain how the former tax laws are better than the new?

From a political observer’s perspective, the 2026 tax law in Nigeria has received a lot of attention and criticism, not just because of its content, but because of perception and context. The law was signed under President Bola Tinubu, but many of its features were already in motion under the previous administration, both belong to the same ruling party, the APC, so in reality, the law is a continuation of long-term fiscal policy rather than a sudden change by one leader.


Tinubu’s government is pushing to formalize more of the economy, increase compliance, and broaden the tax base. That’s why we see stricter reporting rules, rent relief documentation, and more detailed bands. So while the previous law was simpler, the new law reflects a political push for modernization, fairness, and higher revenue, even if it’s more complex for everyday Nigerians. Critics focus on complexity and inconvenience, while proponents emphasize progressive relief for low-income earners.

If I look at it from a neutral perspective, the tax is not the problem, it is the perception and reality that there is no benefits being enjoyed by government and there is much exploitation by the ruling class. Our leaders today are so brazen with how they spend our money. There is no accountability so people see the taxes as mere exploitation not exchange for service which is what is the government's responsibility. A typical example is when they want to toll roads. If Nigerians can be comfortable with corruption and paying its price, why do you think they won't want to pay legitimate taxes if they see the value? The cost of paying for generators is more expensive than 24/7 electricity but today Nigerians are not only paying high Tariff for electricity they don't enjoy, they are paying more money for fuel due to their government not using their money well to give them light That Nigerian abroad will pay bills because they can see the service. They pay for internet, electricity, waste and so much but the service is there. Here, they exploit you.