President Bola Ahmed Tinubu on Thursday signed into law four tax reform bills aimed at modernising Nigeria’s tax system and attracting international investment.
The four bills comprising the Nigeria Tax Bill (Fair Taxation), Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill will take effect from January 1, 2026.
Executive Chairman of the Nigerian Revenue Service (formerly Federal Inland Revenue Service), Zacch Adedeji, who briefed State House correspondents after Tinubu signed the bills, said the January 2026 commencement date would give the administration six months to allow for planning, stakeholder education, and alignment with the national fiscal calendar.
In a similar vein, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, in an interview with Channels Television, explained that the newly signed tax laws are pro-poor and designed to reduce the tax burden on vulnerable Nigerians.
In this article, Tribune Online takes a look at five categories of people and entities that will now be exempt from paying certain taxes, according to Oyedele.
1. Households earning ₦250,000 or less per month
Oyedele stated that households earning ₦250,000 or below monthly are now classified as poor under the new tax framework. As such, they will no longer be required to pay personal income tax. The move is targeted at putting more money in the hands of low-income earners to meet daily needs.
2. Over one-third of workers in both private and public sectors
More than one in three workers across Nigeria’s formal sectors will be fully exempted from PAYE (Pay-As-You-Earn) tax. This exemption is expected to provide relief to millions of Nigerians in formal employment who fall within the low-income bracket.
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3. Small, micro, and nano businesses
According to Oyedele, over 90 percent of small, micro, and nano-scale enterprises will no longer have to worry about tax compliance burdens. These businesses are now exempt from paying corporate income tax, charging VAT, deducting withholding tax, or remitting PAYE for their staff.
4. Consumers of essential goods and services
VAT will no longer apply to essential sectors such as food, education, and healthcare. Oyedele explained that this new zero-rated VAT framework will lower the cost of living for ordinary Nigerians and reduce prices in these crucial sectors.
5. Users of transportation, accommodation, and housing services
Oyedele also noted that transportation, accommodation, and housing are now VAT-exempt. These sectors, which account for over 80 per cent of household expenditure, have been deliberately excluded from VAT to provide broad relief to Nigerian families.
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