Understanding the latest changes in Nigeria’s tax system is crucial for both individuals and businesses. The 2025–2026 tax reforms introduce new regulations, updated tax brackets, digital filing requirements, and reliefs designed to simplify compliance while promoting economic growth. This FAQ section provides clear answers to common questions about tax laws, exemptions, rebates, deductions, and strategies to minimize tax liability under the new regime.
The new tax law in Nigeria for 2026 focuses on broadening the tax base, reducing loopholes, and improving compliance through digital tax administration. It streamlines personal income tax, corporate tax, and VAT collections while enforcing stricter penalties for tax evasion. Read more
The 2025–2026 tax regime introduces progressive tax brackets, enhanced exemptions for low-income earners, and stronger monitoring systems. It emphasizes digital filing and expands non-oil taxation like VAT and excise duties. Read more
The 2025 tax reform bill simplifies tax administration, increases revenue, and enhances transparency. It amends the Companies Income Tax Act, VAT Act, and Personal Income Tax Act, while reducing multiple taxation on SMEs. Read more
The new tax reform restructures Nigeria’s tax system for efficiency and fairness. It introduces digital filing, eliminates multiple taxation, and creates incentives for growth sectors such as agriculture, ICT, and manufacturing. Read more
The 2026 tax year in Nigeria runs from January 1, 2026, to December 31, 2026, for individuals and most businesses. Companies with different accounting years must file within six months of their year-end. Read more
Yes. A Tax Identification Number (TIN) is compulsory for individuals and businesses in Nigeria. It is required to open corporate bank accounts, register companies, apply for contracts, and conduct official business transactions. Read more
For 2026, Nigeria’s progressive income tax rates are: 0–₦300,000 → 7%; ₦300,001–₦600,000 → 11%; ₦600,001–₦1,100,000 → 15%; ₦1,100,001–₦1,600,000 → 19%; ₦1,600,001–₦3,200,000 → 21%; above ₦3,200,000 → 24%. Read more
Under FY 2025–26, rebates include exemptions for SMEs under ₦25 million turnover and individuals earning below ₦300,000 annually. Contributions to pensions, health insurance, and charities also qualify for rebates. Read more
Key tax changes for 2025 include digital tax enforcement, stricter VAT compliance, SME tax reliefs, mandatory e-filing, and higher penalties for tax defaulters. Read more
In Nigeria, the basic exemption limit remains ₦300,000 per year. Anyone earning less than this is fully exempt from personal income tax. Read more
Disadvantages include reduced deductions, limited incentives for high earners, stricter compliance burdens, and risks of double taxation if enforcement overlaps. Read more
The old regime was better for high-income earners due to multiple deductions. The new regime is simpler and more favorable to low and middle-income earners with its streamlined filing process. Read more
For 2025, income tax changes include mandatory e-filing, broader coverage for digital businesses, and stricter VAT enforcement. Read more
Nigeria applies a Consolidated Relief Allowance (CRA) as the standard deduction: 20% of gross income plus ₦200,000, whichever is higher. Read more
The ITR 3 for 2025–26 includes mandatory e-filing, reporting of foreign digital assets, and detailed disclosure of capital gains and dividends. Read more
Nigeria’s tax slab for FY 2025–26 remains progressive, with rates from 7% to 24% depending on income levels, alongside stricter filing requirements. Read more
Taxpayers can save under the new regime through pension contributions, health insurance, early filing, SME exemptions, and charitable donations. Read more
You can reduce taxes legally by maximizing pension contributions, insurance payments, mortgage deductions, and charity donations, as well as claiming CRA allowances. Read more
In the U.S., IRS standard deductions for 2025 are estimated at $15,100 for single filers, $30,200 for married couples filing jointly, and $22,500 for heads of household. Read more
In Nigeria, the exemption threshold is ₦300,000 annually. In the U.S., exemptions are replaced by higher standard deductions. Read more
For a ₦100,000 monthly salary (₦1.2m yearly), after CRA, taxable income is about ₦800,000. Tax payable is around ₦100,000–₦120,000 annually. Read more
Nigeria’s four key tax reform bills cover the Companies Income Tax Act, VAT Act, Personal Income Tax Act, and Customs and Excise Duties Act. Read more
Tinubu’s tax reform expands Nigeria’s tax base, eliminates multiple taxation, enforces digital tax compliance, and provides SME relief while taxing luxury goods. Read more
The importance of taxation includes revenue generation, wealth redistribution, economic growth support, regulation of harmful goods, and promotion of social equity. Read more
The Tax Reform Act 2025 consolidates tax laws, streamlines rates, enforces digital filing, and aligns Nigeria with international tax practices. Read more
To calculate: 1) compute gross income, 2) subtract CRA (20% + ₦200,000), 3) deduct pensions and donations, 4) apply Nigeria’s progressive tax rates. Read more
Nigeria’s seven main taxes are: Personal Income Tax, Companies Income Tax, VAT, Petroleum Profit Tax, Education Tax, Stamp Duties, and Customs/Excise Duties. Read more
The four direct taxes are: Personal Income Tax, Companies Income Tax, Petroleum Profit Tax, and Capital Gains Tax. Read more
Nigeria has passed several tax reform acts, including 2007, 2019, 2020, 2021, and the 2025 Tax Reform Act — over five major acts in two decades. Read more
Navigating Nigeria’s tax landscape can seem complex, but staying informed helps you make smarter financial decisions. By understanding your obligations, exemptions, and incentives under the 2025–2026 tax reforms, you can ensure compliance, optimize your tax savings, and plan effectively for the year ahead. For more detailed insights, visit our full guides at Palliative.ng – 2026 Nigeria Tax Reform Act and Palliative.ng – New Nigeria Tax Reform Bill 2026.
