By Peter Egwuatu, Assistant Business Editor
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has allayed widespread fears among Nigerians over the impending tax reforms scheduled to take effect from January 1, 2026, insisting that the exercise is not designed to overburden citizens with higher tax rates or arbitrary revenue targets.
Speaking at the 2025 Nigeria Media Merit Award (NMMA) ceremony in Lagos last weekend, Oyedele said tax reform goes beyond rates and revenue, stressing that it is fundamentally about rebuilding trust between citizens and the state. “Tax reform is not just about loss, rates, or revenue generation.
At its core, it’s about the social contract of trust between citizens and the state. People ask simple but powerful questions: Why should I pay tax? How is my money being spent? Is the system fair, such that everyone pays their fair share or is it just me paying?” he said.
According to him, such questions cannot be addressed by government alone, but require credible, independent and informed media engagement, noting that tax policy is particularly vulnerable to misinformation because of its direct impact on livelihoods.
“A credible tax system requires fair laws, honest administration, voluntary compliance, and vigilant public scrutiny of how taxpayers’ money is spent.
On our part, we remain committed to reforms that are fair, inclusive, and worthy of public trust,” Oyedele assured. Against this backdrop, the committee has responded to frequently asked questions by Nigerians on the Nigeria Tax Act (NTA) 2025, which becomes operational in 2026.
Key Questions and Answers on the New Tax Law
1.Which individuals does the Nigerian Tax Law apply to? It applies to all individuals who earn income in Nigeria — workers, traders, content creators, influencers, remote workers — and to Nigerians earning income abroad if they are tax residents in Nigeria.
10. Are military salaries taxable? No. Salaries of military officers are now exempt from tax.
11.Do creatives still enjoy tax exemptions on foreign income? No. Authors, musicians, sportsmen and other creatives must now pay Nigerian tax on income earned both within and outside Nigeria.
12. Are crypto gains taxable? Yes. Profits from crypto assets, NFTs and other digital assets are taxable.
13. Who is exempt from Personal Income Tax? Individuals earning the national minimum wage or less, and those earning below N800,000 annually.
14. New Progressive Tax Bands (From 2026) First N800,000 @ 0% Next N2.2 million @ 15% Next N9 million @ 18% Next N13 million @ 21% Next N25 million @ 23% Above N50 million @ 25%
15. Will severance packages be taxed? Severance pay of N50 million or less is tax-free. Any excess above N50 million will be taxed using the progressive tax bands.
16. Will Nigeria tax dividends or rent earned abroad? No. Dividends, interest, rent and royalties earned abroad are exempt if repatriated to Nigeria through approved banking channels.
17. Are disability pensions for injured soldiers taxable? No. Disability pensions for members of the armed forces are completely tax-exempt.
18. Will agricultural companies be taxed? No. Agricultural companies engaged in crop production, livestock, forestry, dairy or cocoa processing will enjoy a five-year tax holiday from the commencement of operations.
19. Is income from Federal or State Government bonds taxable?
No. All government bonds are tax-exempt.
20. What is rent relief under the new law?
From 2026, individuals can claim rent relief of 20% of annual rent, capped at N500,000. Actual rent must be declared and verified.
21. I earn N6 million yearly. Will I be better off?
Under the new law, tax payable drops from N896,000 to N780,000, resulting in savings of N116,000 and higher take-home pay.
22. If my company’s turnover is below N50 million, will it pay by tax?
No. Small companies with a turnover below N50 million are exempt.
23. As a remote worker in Nigeria for an international organisation, will I pay tax?
Yes, if your income is exempt in the organisation’s home country under a treaty or diplomatic arrangement.
24. Will a foreigner earning a salary in Nigeria be taxed?
No, if the employer is a start-up or operates in tech or creative industries, and the income is already taxed in the foreigner’s country of residence.
No. Any person without Tax Identification of Number, TIN, can still have access to its bank account, but will be asked to supply it as time goes on.
However, those who want to open a new bank account without TIN may not be allowed.
Oyedele reaffirmed that the reforms are structured to protect low-income earners, expand fairness, and improve voluntary compliance, while ensuring that Nigeria’s tax system supports growth, inclusion and accountability.
