𝐅𝐈𝐅𝐓𝐘 (50) 𝐓𝐀𝐗 𝐄𝐗𝐄𝐌𝐏𝐓𝐈𝐎𝐍𝐒 𝐀𝐍𝐃 𝐑𝐄𝐋𝐈𝐄𝐅𝐒 𝐓𝐇𝐀𝐓 𝐖𝐈𝐋𝐋 𝐁𝐄𝐍𝐄𝐅𝐈𝐓 𝐓𝐇𝐄 𝐌𝐀𝐒𝐒𝐄𝐒 𝐔𝐍𝐃𝐄𝐑 𝐓𝐇𝐄 𝐍𝐄𝐖 𝐓𝐀𝐗 𝐑𝐄𝐅𝐎𝐑𝐌 𝐋𝐀𝐖𝐒 From 1 January 2026, the new tax laws will provide many reliefs and exemptions for low-income earners, average taxpayers, and small businesses including: 𝐏𝐞𝐫𝐬𝐨𝐧𝐚𝐥 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 𝐨𝐫 𝐏𝐀𝐘𝐄 1. Individuals earning the national minimum wage or less (exempt) 2. Annual gross income up to ₦1,200,000 (translating to about ₦800,000 taxable income) is exempt 3. Reduced PAYE tax for those earning annual gross income up to ₦20 million 4. Gifts (exempt) 𝐀𝐥𝐥𝐨𝐰𝐚𝐛𝐥𝐞 𝐃𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧𝐬 & 𝐑𝐞𝐥𝐢𝐞𝐟𝐬 𝐟𝐨𝐫 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐬 5. Pension contribution to PFA 6. National Health Insurance Scheme 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) are tax-exempt. 12. Pension, gratuity or any 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 exemption threshold if the proceed is reinvested 19. Pension funds, charities, and religious institutions (non-commercial) 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 (𝐂𝐈𝐓) - 𝐄𝐱𝐞𝐦𝐩𝐭 20. Small companies (turnover not more than ₦100 million and total fixed assets not more than ₦250 million) pay 0% tax 21. Eligible (labelled) startups are exempt 22. Compensation relief - 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income workers 23. Employment relief - 50% deduction for salaries of new employees hired and retained for at least three years 24. Tax holiday for the first 5-years for agricultural businesses (crop production, livestock, dairy etc) 25. Gains from investment in a labeled startup by venture capitalist, private equity fund, accelerators or incubators 𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐋𝐞𝐯𝐲 - 𝐄𝐱𝐞𝐦𝐩𝐭 26. Small companies are exempt from 4% development levy 𝐖𝐢𝐭𝐡𝐡𝐨𝐥𝐝𝐢𝐧𝐠 𝐓𝐚𝐱 - 𝐄𝐱𝐞𝐦𝐩𝐭 27. Small companies, manufacturers and agric businesses are exempt from withholding tax deduction on their income 28. Small companies are exempt from deduction on their payments to suppliers 𝐕𝐚𝐥𝐮𝐞 𝐀𝐝𝐝𝐞𝐝 𝐓𝐚𝐱 (𝐕𝐀𝐓) - 0% 𝐨𝐫 𝐄𝐱𝐞𝐦𝐩𝐭 29. Basic food items - 0% VAT 30. Rent - Exempt 31. Education services and materials - 0% VAT 32. Health and medical services 33. Pharmaceutical products - 0% VAT 34. Small companies (≤ ₦100m turnover) are exempt from charging VAT 35. Diesel, petrol, and solar power equipment - VAT suspended or exempt 36. Refund of VAT on assets and overheads to produce VATable or 0% VAT goods and services 37. Agricultural inputs - fertilizers, seeds, seedlings, feeds, and live animals 38. Purchase, lease or hire of equipment for agric purposes 39. Disability aids - hearing aids, wheelchairs, braille materials 40. Transport - shared passenger road transport (non-charter) 41. Electric vehicles and parts - exempt 42. Humanitarian supplies - exempt 43. Baby products 44. Sanitary towels, pads or tampons 45. Land and building 𝐒𝐭𝐚𝐦𝐩 𝐃𝐮𝐭𝐢𝐞𝐬 - 𝐄𝐱𝐞𝐦𝐩𝐭 46. Electronic money transfers below ₦10,000 47. Salary payments 48. Intra-bank transfers 49. Transfers of government securities or shares 50. All documents for transfer of stocks and shares Share this good news with everyone you care about who needs to know. 𝐈𝐍𝐅𝐋𝐔𝐄𝐍𝐂𝐈𝐍𝐆 𝐅𝐎𝐑 𝐆𝐎𝐎𝐃 Nominate a content creator who’s been educating their audience about Nigeria’s new tax reform laws or someone you’d like to see do so. We’ll be selecting the top 20 creators with the most nominations for a special training to help them share accurate, balanced, and useful tax information with their followers. Misinformation spreads fast, often to the author’s benefit but to the audience’s loss. Accurate information may travel slower, but it empowers everyone, and earns lasting trust.
