The Federal Government has announced that from January 1, 2026, it will commence the implementation of a set of new tax laws introducing 50 exemptions and relief measures targeted at low-income earners, average taxpayers, and small businesses.
The reforms stem from four major tax bills signed into law by President Bola Tinubu on June 26, 2025. These include:
Nigeria Tax Act, 2025 (NTA)
Nigeria Tax Administration Act, 2025 (NTAA)
Nigeria Revenue Service (Establishment) Act, 2025 (NRSEA)
Joint Revenue Board (Establishment) Act, 2025 (JRBEA)
Confirming the development in a post on X (formerly Twitter) on Monday, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said the new tax framework will ease the burden on working Nigerians and promote business growth.
“From 1 January 2026, the new tax laws will provide many reliefs and exemptions for low-income earners, average taxpayers, and small businesses,” Oyedele stated.
Below is the full list of exemptions and reliefs provided under the new laws:
Personal Income Tax (PAYE)
- Exemption for individuals earning the national minimum wage or less.
- Annual gross income up to ₦1.2 million exempt (equivalent to ₦800,000 taxable income).
- Reduced PAYE for those earning up to ₦20 million yearly.
- Gifts exempt from tax.
Allowable Deductions and Reliefs
- Pension contributions to PFAs.
- National Health Insurance Scheme.
- National Housing Fund contributions.
- Interest on loans for owner-occupied residential housing.
- Life insurance or annuity premiums.
- Rent relief—20% of annual rent (up to ₦500,000).
Pensions and Gratuities
- Pension funds and assets under the Pension Reform Act (PRA) exempt.
- Pension, gratuity, or retirement benefits under the PRA.
- Compensation for loss of employment up to ₦50 million exempt.
Capital Gains Tax (CGT)
- Sale of an owner-occupied house exempt.
- Personal effects or chattels worth up to ₦5 million exempt.
- Sale of up to two private vehicles per year exempt.
- Gains on shares below ₦150 million per year or gains up to ₦10 million exempt.
- Gains above exemption threshold exempt if proceeds are reinvested.
- Pension funds, charities, and religious institutions (non-commercial) exempt.
Companies Income Tax (CIT)
- Small companies (turnover ≤ ₦100m, assets ≤ ₦250m) pay 0% tax.
- Eligible startups exempt.
- 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income workers.
- 50% deduction for salaries of new employees hired and retained for at least three years.
- Five-year tax holiday for agricultural businesses.
- Gains from investments in labeled startups exempt.
Development Levy
- Small companies exempt from 4% development levy.
Withholding Tax
- Small companies, manufacturers, and agric businesses exempt from withholding tax on income.
- Small companies exempt from deductions on payments to suppliers.
Value Added Tax (VAT)
- Basic food items – 0% VAT.
- Rent – exempt.
- Education services and materials – 0% VAT.
- Health and medical services exempt.
- Pharmaceutical products – 0% VAT.
- Small companies (≤ ₦100m turnover) exempt from charging VAT.
- Diesel, petrol, and solar power equipment – VAT suspended or exempt.
- Refund of VAT on inputs used to produce VATable or 0% goods.
- Agricultural inputs – fertilizers, seeds, seedlings, feeds, and live animals.
- Purchase, lease, or hire of equipment for agriculture.
- Disability aids – hearing aids, wheelchairs, braille materials.
- Shared passenger road transport – exempt.
- Electric vehicles and parts – exempt.
- Humanitarian supplies – exempt.
- Baby products – exempt.
- Sanitary towels, pads, or tampons – exempt.
- Land and buildings – exempt.
Stamp Duties
- Electronic money transfers below ₦10,000 – exempt.
- Salary payments – exempt.
- Intra-bank transfers – exempt.
- Transfers of government securities or shares – exempt.
- Documents for transfer of stocks and shares – exempt.