Nigeria’s new tax laws started on 1 January 2026. Many people heard that “everyone will now be taxed on transfers” — that is not true. Here is what really changed for workers, traders, freelancers and small businesses, in simple words.
₦800kyearly income: no income tax
25%top rate, above ₦50m
₦100msmall company turnover: 0% company tax
🧮 Personal income tax bands
Each rate applies only to the part of your yearly taxable income that falls in that band.
| Yearly taxable income | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2.2 million (to ₦3m) | 15% |
| Next ₦9 million (to ₦12m) | 18% |
| Next ₦13 million (to ₦25m) | 21% |
| Next ₦25 million (to ₦50m) | 23% |
| Above ₦50 million | 25% |
✅
Example
Someone earning ₦1.2 million a year pays 0% on the first ₦800,000 and 15% on the remaining ₦400,000 — about ₦60,000 for the year, before reliefs. Low-income earners and minimum wage earners pay no income tax.
🧾 Reliefs that reduce your tax
- Rent relief: 20% of the rent you pay in a year, up to ₦500,000. Keep your rent receipts or tenancy agreement.
- Approved deductions such as your pension contributions are taken off before tax is worked out — your employer’s payroll or a tax adviser can confirm the full list.
🚫 What did NOT change
- There is no new tax on bank transfers or on money your family sends you. Gifts and transfers are not “income”.
- Tax authorities cannot just take money from your account; they must assess you, notify you and allow you to respond.
- Words in your transfer narration (“food money”, “rent”) do not change whether something is taxed.
