Nigeria’s tax reform in 2026 is the implementation phase of the major tax laws signed by Bola Ahmed Tinubu in June 2025. The reforms represent the most significant restructuring of Nigeria’s tax system in decades, consolidating numerous tax laws into four new Acts that took effect primarily from 1 January 2026. (PwC)
The Four New Tax Laws
- Nigeria Tax Act 2025
- Nigeria Tax Administration Act 2025
- Nigeria Revenue Service
- Joint Revenue Board
These laws replace and consolidate many existing tax statutes, creating a more unified tax framework. (PwC)
Key Changes for Individuals
Lower-income earners receive tax relief
- Individuals earning up to ₦800,000 annually are exempt from personal income tax.
- Minimum-wage earners are effectively removed from the income tax net. (Mercans Global Payroll & PEO)
New Personal Income Tax Bands
| Annual Income | Tax Rate |
|---|---|
| ₦0 – ₦800,000 | 0% |
| ₦800,001 – ₦3 million | 15% |
| ₦3 million – ₦12 million | 18% |
| ₦12 million – ₦25 million | 21% |
| ₦25 million – ₦50 million | 23% |
| Above ₦50 million | 25% |
(Mercans Global Payroll & PEO)
Rent Relief
The former Consolidated Relief Allowance is replaced with a rent-based relief allowing a deduction of up to 20% of annual rent paid, capped at ₦500,000. (Mercans Global Payroll & PEO)
Capital Gains Changes
Capital gains for individuals are no longer taxed under a separate flat-rate regime; they are generally integrated into personal income taxation. Digital and virtual asset gains also become taxable. (EY)
Key Changes for Businesses
Small Business Relief
Businesses with:
- Turnover up to ₦100 million, and
- Fixed assets not exceeding ₦250 million
receive significant tax exemptions, including relief from Companies Income Tax and certain other federal taxes. (Mercans Global Payroll & PEO)
Corporate Tax Reforms
- Minimum tax is abolished.
- A 15% global minimum tax is introduced for qualifying multinational groups.
- Multiple levies are replaced with a single Development Levy. (Mercans Global Payroll & PEO)
Tax Administration Reforms
The reforms aim to:
- Reduce the number of taxes from more than 60 to fewer than 10.
- Digitize tax administration and collections.
- Improve compliance and transparency.
- Simplify interactions between taxpayers and government agencies. (NALTF)
Expected Benefits
The government argues that the reforms will:
- Increase non-oil revenue.
- Broaden the tax base.
- Reduce tax complexity.
- Improve the ease of doing business.
- Strengthen fiscal sustainability. (Reuters)
Concerns and Criticism
Critics have raised concerns about:
- The impact of some new taxes and levies on living costs.
- Compliance burdens during the transition period.
- Implementation challenges and technical gaps in the new legislation. (Reuters)
Bottom line
The 2026 tax reform seeks to make Nigeria’s tax system simpler, more digital, and more efficient while reducing the burden on low-income earners and many small businesses. Higher-income individuals, large corporations, and multinational companies are expected to contribute a greater share of tax revenue under the new framework. (PwC)
If you’d like, I can also explain how the 2026 tax reform specifically affects salary earners, SMEs, VAT, or businesses in Rivers State.
