Nigerians, from minimum wage earners to small business owners, are poised to benefit from tax relief and exemptions starting January 1, 2026, under the nationโs new tax reform lawsTaiwo Oyedele, chairman, Presidential Fiscal Policy and Tax Reforms Committee, in a post on his X handle on Monday, highlighted 50 tax exemptions and reliefs designed to ease the financial burden on the masses and stimulate economic activity.
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He said that with the implementation of the law from 1 January 2026: individuals earning the N70,000 national minimum wage or less will be exempted from personal income tax (PAYE).
2. Individuals whose annual gross income is N1,200,000 (translating to about N800,000 taxable income) is exempt.
3. There will be reduced PAYE tax for those earning annual gross income up to N20 million.
4. Gifts received will also not be taxed.
๐๐ฅ๐ฅ๐จ๐ฐ๐๐๐ฅ๐ ๐๐๐๐ฎ๐๐ญ๐ข๐จ๐ง๐ฌ & ๐๐๐ฅ๐ข๐๐๐ฌ ๐๐จ๐ซ ๐ข๐ง๐๐ข๐ฏ๐ข๐๐ฎ๐๐ฅ๐ฌ- for Nigerians with taxable income, they will be allowed to deduct the following before their tax is calculated:
5. Pension contribution to PFA.
6. National Health Insurance Scheme.
7. National Housing Fund contributions.
8. Interest on loans for owner-occupied residential housing.
9. Life insurance or annuity premiums.
10. Rent relief โ 20 percent of annual rent (up to โฆ500,000).
๐๐๐ง๐ฌ๐ข๐จ๐ง๐ฌ & ๐๐ซ๐๐ญ๐ฎ๐ข๐ญ๐ข๐๐ฌ โ ๐๐ฑ๐๐ฆ๐ฉ๐ญ
11. Pension funds and assets under the Pension Reform Act (PRA) are tax-exempt.
12. Pension, gratuity or any retirement benefits granted in line with the PRA will not be taxed.
13. Compensation for loss of employment up to N50 million will not be taxed.
๐๐๐ฉ๐ข๐ญ๐๐ฅ ๐๐๐ข๐ง๐ฌ ๐๐๐ฑ (๐๐๐) โ ๐๐ฑ๐๐ฆ๐ฉ๐ญ
14. Sale of an owner-occupied house .
15. Personal effects or chattels worth up to N5 million.
16. Sale of up to two private vehicles per year.
17. Gains on shares below N150 million per year or gains up to โฆ10 million.
18. Gains on shares above exemption threshold if the proceed is reinvested.
19. Pension funds, charities, and religious institutions (non-commercial)
๐๐จ๐ฆ๐ฉ๐๐ง๐ข๐๐ฌ ๐๐ง๐๐จ๐ฆ๐ ๐๐๐ฑ (๐๐๐) โ ๐๐ฑ๐๐ฆ๐ฉ๐ญ
20. Small companies, with turnover not more than N100 million and total fixed assets not more than N250 million pay 0% tax.
21. Eligible (labelled) startups are exempted from paying tax.
22. Compensation relief โ 50 percent additional deduction for salary increases, wage awards, or transport subsidies for low-income workers.
23. Employment relief โ 50 percent deduction for salaries of new employees hired and retained for at least three years.
24. Tax holiday for the first 5-years for agricultural businesses (crop production, livestock, dairy etc).
25. Gains from investment in a labeled startup by venture capitalist, private equity fund, accelerators or incubators will not be taxed.
๐๐๐ฏ๐๐ฅ๐จ๐ฉ๐ฆ๐๐ง๐ญ ๐๐๐ฏ๐ฒ โ ๐๐ฑ๐๐ฆ๐ฉ๐ญ
26. Small companies are exempt from 4 percent development levy.
๐๐ข๐ญ๐ก๐ก๐จ๐ฅ๐๐ข๐ง๐ ๐๐๐ฑ โ ๐๐ฑ๐๐ฆ๐ฉ๐ญ
27. Small companies, manufacturers and agric businesses are exempt from withholding tax deduction on their income.
28. Small companies are exempt from deduction on their payments to suppliers.
๐๐๐ฅ๐ฎ๐ ๐๐๐๐๐ ๐๐๐ฑ (๐๐๐) โ 0% ๐จ๐ซ ๐๐ฑ๐๐ฆ๐ฉ๐ญ
29. Basic food items are VAT free.
30. Rent is VAT free.
31. Education services and materials are VAT free.
32. Health and medical services are VAT free.
33. Pharmaceutical products are VAT free.
34. Small companies (โค โฆ100m turnover) are exempt from charging VAT.
35. Diesel, petrol, and solar power equipment โ VAT suspended or exempt.
36. Refund of VAT on assets and overheads to produce VATable or 0% VAT goods and services.
37. Agricultural inputs โ fertilizers, seeds, seedlings, feeds, and live animals are VAT free.
38. Purchase, lease or hire of equipment for agric purposes- VAT free.
39. Disability aids โ hearing aids, wheelchairs, braille materials-VAT free.
40. Transport โ shared passenger road transport (non-charter)-VAT free.
41. Electric vehicles and parts โ exempt.
42. Humanitarian supplies โ exempt.
43. Baby products are VAT free.
44. Sanitary towels, pads or tampons are VAT free.
45. Land and building are VAT free.
๐๐ญ๐๐ฆ๐ฉ ๐๐ฎ๐ญ๐ข๐๐ฌ โ ๐๐ฑ๐๐ฆ๐ฉ๐ญ
46. Electronic money transfers below N10,000 are exempt from stamp duty.
47. Salary payments โ exempt from stamp duty.
48. Intra-bank transfers โ exempt from stamp duty.
49. Transfers of government securities or shares โ exempt from stamp duty.
50. All documents for transfer of stocks and shares โ exempt from stamp duty.
