News on Nigeria’s New Tax Policy: No income tax for earners below N800,000 from 2026
by Kalu Aja - 15th October, 2025
President Bola Tinubu signed into law four key tax reform bills in June 2025:
Nigeria Tax Act
Nigeria Tax Administration Act
Nigeria Revenue Service (Establishment) Act
Joint Revenue Board (Establishment) Act
The new rules kick in 1 January 2026.
Zero tax for certain earners
Individuals earning an annual income of up to ₦800,000 will be exempt from paying personal income tax (i.e. 0% rate for the first ₦800,000 of taxable income after applicable reliefs/exemptions).
Progressive tax structure beyond ₦800,000
After the ₦800,000 threshold, the next brackets and rates are roughly:
₦800,001 to ₦3,000,000 → 15%
₦3,000,001 to ₦12,000,000 → 18%
₦12,000,001 to ₦25,000,000 → 21%
₦25,000,001 to ₦50,000,000 → 23%
Above ₦50,000,000 → 25%
Rent relief and deductions
The “Consolidated Relief Allowance” as previously known is being replaced. A new “rent relief” has been introduced: the lower of 20% of rent paid or ₦500,000.
PAYE (Pay-As-You-Earn) exemption for many
Over 90% (or about 98%) of Nigerians will either pay no PAYE or have substantially reduced PAYE under this regime beginning January 2026.
Some claims said that anyone earning ₦800,000+ will be taxed at 20% flat from Jan 2026. These are incorrect. The actual law uses progressive brackets, not a single flat rate.
There’s sometimes confusion between monthly income thresholds (like ₦250,000/month) and annual thresholds. The ₦800,000 figure is annual.
Even those exempt ( ₦800,000 annually) will still need to file tax returns, records etc., otherwise they may be assessed under presumptive tax or other mechanisms.
The law applies after allowable reliefs/exemptions, so “income” for tax purposes is after deductions like rent relief etc.
Companies with small turnover (up to ₦100 million) are also given relief under corporate tax rules.
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