Starting from the first day of January 2026, Nigeria’s federal authorities will roll out updated taxation regulations featuring a total of 50 breaks and incentives aimed at supporting those with modest incomes, everyday citizens paying taxes, and smaller enterprises.
As stated by Wale Edun, who serves as the finance minister and also oversees economic coordination, these revised tax measures are expected to foster expansion in the business sector while enhancing the financial capacity of the Nigerian population. In a recent update shared on the social platform X this Monday, Taiwo Oyedele, who leads the presidential panel on fiscal strategies and taxation changes, highlighted that these 50 tax breaks and incentives will offer substantial advantages to Nigerians within the revamped tax framework.
“Beginning January 1, 2026, the updated tax regulations will deliver numerous incentives and exemptions tailored for people with lower earnings, typical taxpayers, and modest-sized companies,” Oyedele noted.
Below is the comprehensive rundown of these exemptions and incentives:
Personal Income Tax (PAYE)
- People whose income matches or falls below the country’s minimum wage level (fully exempt).
- Total yearly earnings up to N1,200,000 (equivalent to around N800,000 in taxable earnings) receive full exemption.
- Lowered PAYE rates for individuals with annual incomes reaching N20 million.
- Monetary or material gifts (completely exempt).
Allowable Deductions and Incentives for Individuals
- Contributions made to pension schemes managed by pension fund operators (PFA).
- Participation in the national health insurance program.
- Deposits into the National Housing Fund (NHF).
- Interest payments on mortgages for homes that the owner lives in.
- Premiums paid for life insurance policies or annuity plans.
- Housing cost relief – equivalent to 20% of yearly rental payments (capped at N500,000).
Pensions and Retirement Benefits
- Funds and investments held under the Pension Reform Act (PRA).
- Retirement pensions, lump-sum gratuities, or other benefits provided according to the PRA guidelines.
- Payments for job loss compensation, limited to N50 million.
Capital Gains Tax
- Proceeds from selling a primary residence that the owner occupies.
- Household items or personal belongings valued at up to N5 million.
- Sales involving up to two personal cars annually.
- Profits from stock sales under N150 million yearly or gains not exceeding N10 million.
- Profits from stocks surpassing the exemption limit, provided the funds are reinvested.
- Retirement funds, charitable organizations, and faith-based groups (for non-profit activities).
Companies Income Tax
- Smaller firms (with revenue not exceeding N100 million and assets below N250 million) face a zero-percent tax rate.
- Qualified startups that meet specific criteria.
- Wage support incentive: An extra 50% deduction for boosts in pay, bonuses, or travel allowances for employees with lower wages.
- Hiring incentive: 50% deduction on wages for newly recruited staff kept on for a minimum of three years.
- A five-year tax-free period for farming operations (including crop farming, animal husbandry, milk production, and similar).
- Earnings from investments in approved startups by investors like venture capitalists, equity funds, business accelerators, or incubators.
Development Levy
- Smaller firms are spared from the 4% development charge.
Withholding Tax
- Smaller firms, manufacturing operations, and farming enterprises are not subject to withholding deductions on their revenues.
- Smaller firms are excused from withholding on outflows to vendors.
Value Added Tax (VAT) – (Zero-Rated or Exempt)
- Essential foodstuffs – subject to zero-percent VAT.
- Rental payments – fully exempt.
- Educational programs and supplies – zero-percent VAT.
- Medical and healthcare provisions.
- Medications and drugs – zero-percent VAT.
- Firms with turnover below N100 million – no obligation to apply VAT.
- Fuel types like diesel and petrol, plus gear for solar energy – VAT waived or suspended.
- Reimbursement of VAT on equipment and operational costs linked to producing items or services that are VAT-taxable or zero-rated.
- Farming supplies – such as fertilizers, planting seeds, young plants, animal feeds, and livestock.
- Acquiring, renting, or leasing machinery for agriculture.
- Tools for people with disabilities – including auditory devices, mobility chairs, and materials in Braille.
- Public transportation – shared bus or road services for passengers (excluding private charters).
- Battery-powered cars and components – exempt.
- Aid for humanitarian efforts – exempt.
- Items for infants.
- Feminine hygiene products like sanitary napkins, pads, or tampons.
- Real estate transactions involving land and structures.
Stamp Duties (Exempt)
- Digital transfers of funds under N10,000.
- Payroll disbursements.
- Transfers within the same banking institution.
- Movements involving state bonds or equity shares.
- Paperwork related to shifting stocks and shares.
Program to Educate Influencers on Reliable Tax Information
Oyedele further encouraged the public to suggest online content producers who have been informing their communities about Nigeria’s recent tax overhaul laws or those who could effectively step into this educational position.
He explained that the 20 creators receiving the most suggestions would be chosen for an exclusive workshop aimed at equipping them to disseminate precise, fair, and practical tax details to their audiences.
“False details can circulate quickly, often advantaging the spreader but harming the recipients. Reliable details might spread more gradually, yet it strengthens society and builds enduring confidence,” he remarked.
The head of fiscal policy indicated that suggestions could be submitted by tagging or referencing favored influencers or via the online form at forms.gle/15kyv1ffx7tzTL, with the submission window ending on November 9, 2025.
