Nigeria’s new tax reform laws which took effect since January 1, 2026, introduced wide-ranging exemptions and reliefs aimed at easing the tax burden on low-income earners, middle-income taxpayers, and small businesses. The reforms cover personal income tax, company taxation, value-added tax, capital gains, stamp duties, and other levies, with a strong focus on protecting vulnerable groups and supporting economic growth.
50 Tax Exemptions and Reliefs to Benefit Nigerians Under New Tax Reform Laws (FULL LIST)
Personal Income Tax or PAYE
- Individuals earning the national minimum wage or less (exempt)
- Annual gross income up to ₦1,200,000 (translating to about ₦800,000 taxable income) is exempt
- Reduced PAYE tax for those earning annual gross income up to ₦20 million
- Gifts (exempt)
Allowable Deductions & Reliefs for individuals
- Pension contribution to PFA
- National Health Insurance Scheme
- National Housing Fund contributions
- Interest on loans for owner-occupied residential housing
- Life insurance or annuity premiums
- Rent relief – 20% of annual rent (up to ₦500,000)
Pensions & Gratuities – Exempt
- Pension funds and assets under the Pension Reform Act (PRA) are tax-exempt.
- Pension, gratuity or any retirement benefits granted in line with the PRA
- Compensation for loss of employment up to ₦50 million
Capital Gains Tax (CGT) – Exempt
- Sale of an owner-occupied house
- Personal effects or chattels worth up to ₦5 million
- Sale of up to two private vehicles per year
- Gains on shares below ₦150 million per year or gains up to ₦10 million
- Gains on shares above exemption threshold if the proceed is reinvested
- Pension funds, charities, and religious institutions (non-commercial)
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Companies Income Tax (CIT) – Exempt
- Small companies (turnover not more than ₦100 million and total fixed assets not more than ₦250 million) pay 0% tax
- Eligible (labelled) startups are exempt
- Compensation relief – 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income workers
- Employment relief – 50% deduction for salaries of new employees hired and retained for at least three years
- Tax holiday for the first 5-years for agricultural businesses (crop production, livestock, dairy etc)
- Gains from investment in a labeled startup by venture capitalist, private equity fund, accelerators or incubators
Development Levy – Exempt
- Small companies are exempt from 4% development levy
Withholding Tax – Exempt
- Small companies, manufacturers and agric businesses are exempt from withholding tax deduction on their income
- Small companies are exempt from deduction on their payments to suppliers
Value Added Tax (VAT) – 0% or Exempt
- Basic food items – 0% VAT
- Rent – Exempt
- Education services and materials – 0% VAT
- Health and medical services
- Pharmaceutical products – 0% VAT
- Small companies (≤ ₦100m turnover) are exempt from charging VAT
- Diesel, petrol, and solar power equipment – VAT suspended or exempt
- Refund of VAT on assets and overheads to produce VATable or 0% VAT goods and services
- Agricultural inputs – fertilizers, seeds, seedlings, feeds, and live animals
- Purchase, lease or hire of equipment for agric purposes
- Disability aids – hearing aids, wheelchairs, braille materials
- Transport – shared passenger road transport (non-charter)
- Electric vehicles and parts – exempt
- Humanitarian supplies – exempt
- Baby products
- Sanitary towels, pads or tampons
- Land and building
Stamp Duties – Exempt
- Electronic money transfers below ₦10,000
- Salary payments
- Intra-bank transfers
- Transfers of government securities or shares
- All documents for transfer of stocks and shares
Overall, the new tax reform laws represent one of Nigeria’s most comprehensive efforts to broaden the tax base while protecting low-income earners and small businesses. While the legal framework takes effect in 2026, its full impact is expected to unfold as implementation begins nationwide.
