Nigeria's New Tax Regime Takes Effect, Raises Tax-Free Threshold

On 26 June 2025, President Tinubu signed four landmark tax reform bills into law — the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Act, and the Joint Revenue Board Act — with the new regime taking effect from 1 January 2026.

The reform is the most sweeping overhaul of Nigeria's tax system in a generation, aimed at driving economic growth, boosting revenue generation, and improving the business environment across all levels of government.

Among the headline changes: the personal income tax-free threshold rose from ₦300,000 to ₦800,000 a year, lifting a significant share of low-income earners out of the tax net entirely. Small companies — now defined as those with turnover up to ₦100 million (up from ₦25 million) and fixed assets under ₦250 million — are exempt from Companies Income Tax, Capital Gains Tax, and the new Development Levy.

The reforms sit alongside the removal of the fuel subsidy and the unification of the exchange rate as the third leg of the administration's fiscal overhaul — all pitched as short-term pain in service of the long-term revenue growth already showing up in the numbers.