From January 2026, Nigerians will benefit from 50 new tax exemptions and reliefs aimed at easing burdens for low-income earners, small businesses, and average taxpayers. These reforms span income tax, VAT, stamp duties, and more.
In a landmark move to overhaul Nigeria’s tax system, the federal government has announced 50 new tax exemptions and reliefs that will take effect from January 1, 2026. These reforms are part of four new laws signed by President Bola Tinubu in June 2025: the Nigeria Tax Act (NTA), Nigeria Tax Administration Act (NTAA), Nigeria Revenue Service Act (NRSA), and the Joint Revenue Board Act (JRBA) The Guardian Nigeria News TheCable.
Who Benefits?
Low-income earners: Individuals earning the national minimum wage or less will be exempt from personal income tax.
Middle-income earners: Those earning up to ₦1.2 million annually will be fully exempt, while those earning up to ₦20 million will enjoy significant reliefs Punch Newspapers.
Small businesses: SMEs will benefit from reduced compliance burdens and exemptions from certain taxes.
Startups and informal sector players: Many will be exempt from VAT and stamp duties.
Key Tax Categories Affected
Personal Income Tax (PIT): Exemptions for low and middle-income earners.
Companies Income Tax (CIT): Reliefs for small and medium enterprises.
Value Added Tax (VAT): Exemptions for basic goods and services.
Stamp Duties: Waivers for small transactions and informal sector dealings.
Capital Gains Tax (CGT): Exemptions for gains below a certain threshold.
Examples of Specific Exemptions
Minimum wage earners – no income tax.
Annual income up to ₦1.2 million – full exemption.
Annual income up to ₦20 million – partial relief.
Micro businesses – exempt from VAT and stamp duties.
Startups – tax holidays for first few years of operation.
Agricultural cooperatives – exempt from CIT.
Educational institutions – reliefs on property and income taxes.
Charitable organizations – full exemptions on donations and grants.
Why It Matters
According to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, these changes are designed to:
Boost purchasing power
Encourage business growth
Improve voluntary tax compliance
Simplify Nigeria’s complex tax system
The reforms are expected to stimulate economic activity, reduce poverty, and enhance government revenue through broader compliance rather than higher rates.
