Nigeria’s new tax policy, effective January 2026, exempts individuals earning N800,000 or less annually from paying personal income tax. This move aims to ease the financial burden on low-income earners, benefiting millions of Nigerians. The policy also introduces a progressive tax scale for higher earners, with rates ranging from 15% to 25% for incomes above N50 million.
Key Highlights:
– Tax Exemption Threshold: N800,000 annual income
– *Progressive Tax Scale*:
– 0% for N800,000 or less
– 15% for N800,001 – N2,200,000
– 18% for N2,200,001 – N9,000,000
– 21% for N9,000,001 – N13,000,000
– 23% for N13,000,001 – N25,000,000
– 25% above N50,000,000
– Allowable Deductions: 20% of annual rent (max N500,000), NHIS contributions, National Housing Fund, and pension contributions
– Digital Income Taxation: Income from digital platforms (YouTube, TikTok, etc.) and cryptocurrency transactions now taxable.
This policy reform aims to promote fairness, reduce tax burden on low-income earners, and increase revenue generation.
