Nigeria’s New Tax Laws Are Now Live: What the ₦800k Threshold & Bank Narration Rules Mean for You

By BellaNaija.com

Nigeria’s comprehensive new tax reform framework, built around several Acts passed in 2025, officially took effect on January 1, 2026. These laws aim to modernise the country’s tax system, broaden the tax base, simplify compliance, and importantly give relief to low‑income earners. 

Key Changes Nigerians Should Know

 ₦800,000 Tax‑Free Threshold for Individuals

Under the new rules, individuals earning ₦800,000 or less annually are exempt from personal income tax. This is a historic move to reduce the tax burden on lower earners, providing relief to a significant portion of the workforce. 

There was widespread concern online that banks would automatically deduct taxes based on bank transfer narrations. Government tax officials, including Taiwo Oyedele, have publicly debunked this idea, reassuring Nigerians that bank accounts are safe narrations alone won’t trigger automatic tax deductions. 

While narrations aren’t taxed directly, banks are now required to monitor and report account transactions to tax authorities. For example, transactions above certain thresholds (e.g., N25 million monthly for individuals and N100 million for companies) must be reported for tax monitoring. This is part of broader efforts to improve compliance and transparency. 

These changes are part of a wider tax system overhaul signed into law in 2025 to replace older, fragmented tax statutes with a consolidated framework. The reform seeks to:

Simplify tax compliance for individuals and businesses.

Increase transparency and reduce loopholes.

Improve revenue mobilisation without disproportionately burdening low‑income earners.

Leverage modern technology including digital filing and integration of TIN with national IDs to enhance administration. 

Most low‑income earners pay zero personal income tax if earnings are below ₦800,000.

 Bank transfer narrations don’t trigger tax deductions.

Higher earners and businesses will still be taxed according to the new rates and compliance structures.

 Banks and financial institutions must share transaction info with tax authorities to help enforce compliance. 

Summary:

Nigeria’s tax changes effective January 1, 2026 bring a significant personal income tax exemption for low earners, dispel fears around bank narration‑based tax deductions, and strengthen reporting requirements for financial institutions all in an effort to modernise the nation’s tax system and boost compliance.