From January 1, 2026, millions of Nigerians especially low-income earners, retirees, and small businesses will benefit from new tax waivers and relief measures under Nigeria’s tax reform laws.
The Chairman of the Presidential Fiscal Policy & Tax Reforms Committee, Taiwo Oyedele, released the full breakdown, detailing 50 categories of exemptions aimed at reducing tax pressure and boosting economic growth.
Personal Income Tax / PAYE – Who Won’t Pay Income Tax
Tax waivers for low-income earners and minimum-wage earners:
Earners at or below minimum wage – no tax
Individuals earning up to ₦1.2m yearly – no tax
Individuals earning up to ₦20m per year – tax relief applies
Gifts received – not taxable
Approved Deductions to Reduce Your PAYE
Expenses you can subtract before tax is calculated:
Pension contributions
NHIS health contributions
National Housing Fund (NHF) contributions
Interest on home-ownership loans
Life insurance / annuity contributions
Rent deduction – up to ₦500,000 (max 20% of rent)
Pension & Retirement Income – Tax-Free
Pension & Retirement Income – Tax-Free
Benefits for retirees and end-of-service payouts:
Pension funds and assets
Pension, gratuity & retirement payments
Compensation for job loss – up to ₦50m tax-free
Capital Gains Tax – Exemptions When Selling Assets
Capital Gains Tax – Exemptions When Selling Assets
No tax on certain asset sales:
Sale of your personal residential home
Personal items worth up to ₦5m
Sale of up to two personal vehicles per year
Gains on small share sales (₦150m / ₦10m thresholds)
CGT waived if you reinvest gains into shares
Pension funds, charities & religious bodies – where non-commercial
Companies Income Tax – Boost for Small Businesses
Support for job creation and startups:
Small firms with ≤ ₦100m turnover – no CIT
Registered startups – exempt
Extra tax deduction for companies that increase low-income salaries
Tax deduction for firms hiring & keeping staff for 3 years
Agricultural companies – 5-year tax holiday
Venture investors in certified startups – exempt
Development Levy
Development Levy
Small companies – exempt
Withholding Tax – Reduced for SMEs
Withholding Tax – Reduced for SMEs
Ease of cash flow for small companies:
Small firms, manufacturers & Agric businesses – exempt on income
Small firms exempt on payments to suppliers
VAT – Zero VAT on Essentials
VAT – Zero VAT on Essentials
Basic needs remain tax-free:
Basic food items
Residential rent
Education services
Healthcare services
Medicines & pharmaceuticals
Small firms ≤ ₦100m turnover – don’t charge VAT
Diesel, petrol, solar equipment
VAT refund allowed on production capital items
Fertiliser, seeds, animal feed & livestock
Hire of agricultural machinery
Disability aids (e.g., wheelchairs)
Public road transport (buses)
Electric vehicles & parts
Humanitarian aid items
Baby products
Sanitary pads & tampons
Land and building transactions
Stamp Duty – Charges Removed
Stamp Duty – Charges Removed
Transfers and documents exempt from duty:
Transfers below ₦10,000
Salary transfers
Transfers within same bank
Transfers of govt securities & shares
Documents for share transfers
These tax exemptions and relief measures are part of the Federal Government’s fiscal agenda for 2024–2026 and will begin January 2026.
