From January 1, 2026, Nigeria’s new tax reform laws will introduce multiple exemptions and reliefs aimed at supporting low-income earners, average taxpayers, and small businesses.
These measures are designed to reduce tax burdens, encourage savings, and boost compliance.
Personal Income Tax or PAYE:
1. Individuals earning the national minimum wage or less are fully exempt
2. Annual gross income up to ₦1,200,000 (around ₦800,000 taxable income) is exempt
3. Reduced PAYE rates for those earning up to ₦20 million annually
4. Gifts are exempt from taxation
Allowable Deductions & Reliefs for Individuals:
5. Pension contributions to Pension Fund Administrators (PFAs)
6. National Health Insurance Scheme contributions
7. National Housing Fund contributions
8. Interest on loans for owner-occupied residential housing
9. Life insurance or annuity premiums
10. Rent relief – 20% of annual rent (up to ₦500,000)
Pensions & Gratuities – Exempt:
11. Pension funds and assets under the Pension Reform Act (PRA)
12. Pension, gratuity, or other retirement benefits granted in line with the PRA
13. Compensation for loss of employment up to ₦50 million
Capital Gains Tax (CGT) – Exempt:
14. Sale of an owner-occupied house
15. Personal effects or chattels worth up to ₦5 million
16. Sale of up to two private vehicles per year
17. Gains on shares below ₦150 million per year or gains up to ₦10 million
18. Gains on shares above the exemption threshold if proceeds are reinvested
19. Contributions to pension funds, charities, and non-commercial religious institutions
Companies Income Tax (CIT) – Exempt:
20. Small companies with turnover not exceeding ₦100 million and total fixed assets not more than ₦250 million pay 0% tax
21. Eligible startups are fully exempt
Citizens are encouraged to share this information widely. Additionally, content creators educating their audience about the new tax laws can be nominated for a special training program to help spread accurate and useful tax guidance. Officials warn that misinformation spreads quickly, but accurate information empowers the public and builds lasting trust.