The Federal Government has unveiled new tax laws offering extensive reliefs and exemptions for low-income earners, middle-class taxpayers, and small businesses, set to take effect from January 1, 2026.
The reforms, which include 50 targeted tax exemptions, are part of the administration’s efforts to ease the financial burden on Nigerians and stimulate economic growth.
The new laws — the Nigeria Tax Act, 2025 (NTA); Nigeria Tax Administration Act, 2025 (NTAA); Nigeria Revenue Service (Establishment) Act, 2025 (NRSEA); and Joint Revenue Board (Establishment) Act, 2025 (JRBEA) — aim to create a more transparent, equitable, and growth-driven fiscal system.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the reforms would strengthen small businesses, encourage compliance, and increase the purchasing power of citizens.
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Also confirming the development, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, stated via X (formerly Twitter) that the new regime was designed to support inclusive economic growth and protect vulnerable groups.
“From 1 January 2026, the new tax laws will provide many reliefs and exemptions for low-income earners, average taxpayers, and small businesses,” Oyedele wrote.
Key Highlights of the 50 Tax Exemptions and Reliefs
Personal Income Tax (PAYE)
- Individuals earning the national minimum wage or less are exempt.
- Annual gross income up to ₦1.2 million is tax-free.
- Reduced PAYE rate for those earning ₦20 million annually.
- Gifts, pensions, gratuities, life insurance, and retirement benefits are exempted.
Companies Income Tax
- Small companies (turnover ≤ ₦100m) will pay zero percent tax.
- Five-year tax holiday for agricultural businesses.
- 50% additional deduction for salary increases and wage awards for low-income staff.
- 50% employment relief for new hires retained for at least three years.
Value Added Tax (VAT)
- Basic food items, education materials, healthcare services, pharmaceutical products, rent, and baby products will attract zero or no VAT.
- Small companies (with less than ₦100m turnover) are exempt from VAT registration.
- Diesel, petrol, and solar power equipment are VAT-exempt or suspended.
Capital Gains Tax
- Sale of owner-occupied houses and two private vehicles per year are exempt.
- Pension funds, charities, and religious institutions (non-commercial) are excluded.
Stamp Duties
- Exemptions for electronic transfers below ₦10,000, salary payments, and government securities transactions.
Training for Digital Influencers
Oyedele also announced a new initiative to train 20 selected content creators on accurate tax education, saying the programme aims to counter misinformation and promote financial literacy among Nigerians.
He urged citizens to nominate credible online influencers educating the public on tax reforms through a nomination form available until November 9, 2025.
“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,” Oyedele added.
