New tax laws promise major exemptions and incentives for low-income earners, small businesses, and priority sectors to spur growth, innovation and ease cost-of-living burdens nationwide.
Nigeria’s Federal Government has announced 50 new tax exemptions and relief measures that will take effect from January 1, 2026, aiming to ease financial pressures on low-income earners, small businesses, and critical industries. The reforms emerge from a sweeping update of national tax policy signed into law by President Bola Ahmed Tinubu in June 2025.
The changes are part of four newly enacted laws: the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Act, and the Joint Revenue Board Act. Authorities say the updated framework is designed to modernize the country’s tax system, encourage compliance, and build a more equitable structure for taxpayers.
According to the Presidential Fiscal Policy and Tax Reforms Committee, the measures offer substantial relief across Personal Income Tax, Value Added Tax (VAT), Companies Income Tax, and Capital Gains Tax, among others. Notably, individuals earning the national minimum wage or below will now be exempt from paying Personal Income Tax, while those earning up to ₦1.2 million annually will also be exempt.
Small companies – defined as businesses with annual turnover not exceeding ₦100 million and fixed assets below ₦250 million – will pay zero Companies Income Tax and are excused from development levy and withholding tax obligations.
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VAT exemptions have been expanded to include essential food items, educational materials, rent, health services, disability aids, and baby products. Renewable energy equipment, electric vehicles, diesel, and agricultural inputs will also benefit from either zero-rated or exempt status.
The government has coupled the rollout with an “Influencing for Good” public awareness initiative. Citizens are being encouraged to nominate digital content creators who can help disseminate accurate information about the reforms. The top 20 nominees will receive training aimed at improving transparency and understanding of the new rules.
Other notable provisions include a tax holiday of up to five years for agricultural ventures, exemptions on capital gains from owner-occupied homes and certain share sales, as well as deductions for employers who raise wages for low-income workers or retain new hires for at least three years.
Authorities say the reforms reflect an effort to balance revenue growth with economic fairness, particularly at a time when Nigerians continue to grapple with high inflation and rising living costs. The government hopes the measures will stimulate investment, job creation, and overall productivity.
The nomination period for the influencer initiative closes on November 9, 2025.