Nigeria’s new tax laws came into effect on January 1, 2026. These laws are among the biggest changes to Nigeria’s tax system in years. They were passed to make taxes easier to understand, fairer, and more consistent across the country.
This article explains the key aspects of the law in simple language, so you can understand how it affects you, your job, your business, and your finances.
What Has Changed
The new tax laws combine many old tax rules into a single set of laws. Instead of many different laws for different taxes, there is now one system that handles personal income tax, business tax, value-added tax (VAT), capital gains tax, and others.
The goal is to reduce confusion, avoid overlapping taxes, and make it easier for people and companies to follow the rules.
Personal Income Tax (Tax on What You Earn)
Under the new rules:
- If you earn ₦800,000 or less per year, you pay no personal income tax. This means most low-income workers don’t pay taxes.
- Above ₦800,000, your income is taxed in bands: the more you earn, the higher the rate of tax you pay.
- Items like salaries, rent, interest, and digital asset gains (e.g., crypto profits) are now part of taxable income.
- The old “consolidated relief allowance” has been replaced with a new system where you may deduct a portion of rent if you can prove it.