The Presidential Fiscal Policy and Tax Reforms Committee has announced 50 tax exemptions and relief measures set to take effect from January 1, 2026, under the newly enacted tax reform laws.
President Bola Ahmed Tinubu signed four landmark bills — the Nigeria Tax Act (NTA), Nigeria Tax Administration Act (NTAA), Nigeria Revenue Service Act (NRSA), and Joint Revenue Board Act (JRBA) — into law on June 26, 2025.
According to information published on the government’s official website, the new framework is designed to provide significant relief to low-income earners, average taxpayers, and small businesses, promoting a fairer and more efficient tax system.
The reforms cover several key tax categories, including Personal Income Tax, Companies Income Tax, Value Added Tax (VAT), Stamp Duties, and Capital Gains Tax.
1. Individuals earning the national minimum wage or less (exempt).
2. Annual gross income up to ₦1,200,000 (translating to about ₦800,000 taxable income) is exempt.
3. Reduced PAYE tax for those earning annual gross income up to ₦20 million.
4. Gifts (exempt).
𝐀𝐥𝐥𝐨𝐰𝐚𝐛𝐥𝐞 𝐃𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧𝐬 & 𝐑𝐞𝐥𝐢𝐞𝐟𝐬 𝐟𝐨𝐫 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐬
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 – 20% of annual rent (up to ₦500,000).
𝐏𝐞𝐧𝐬𝐢𝐨𝐧𝐬 & 𝐆𝐫𝐚𝐭𝐮𝐢𝐭𝐢𝐞𝐬 – 𝐄𝐱𝐞𝐦𝐩𝐭
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.
13. Compensation for loss of employment up to ₦50 million
𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐚𝐢𝐧𝐬 𝐓𝐚𝐱 (𝐂𝐆𝐓) – 𝐄𝐱𝐞𝐦𝐩𝐭
14. Sale of an owner-occupied house.
15. Personal effects or chattels worth up to ₦5 million.
16. Sale of up to two private vehicles per year.
17. Gains on shares below ₦150 million per year or gains up to ₦10 million.
18. Gains on shares above exemption threshold if the proceed is reinvested.
19. Pension funds, charities, and religious institutions (non-commercial).
𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 (𝐂𝐈𝐓) – 𝐄𝐱𝐞𝐦𝐩𝐭
20. Small companies (turnover not more than ₦100 million and total fixed assets not more than ₦250 million) pay 0% tax.
21. Eligible (labelled) startups are exempt.
22. Compensation relief – 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income workers.
23. Employment relief – 50% 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 funds, accelerators or incubators.
𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐋𝐞𝐯𝐲 – 𝐄𝐱𝐞𝐦𝐩𝐭
26. Small companies are exempt from 4% development levy.
𝐖𝐢𝐭𝐡𝐡𝐨𝐥𝐝𝐢𝐧𝐠 𝐓𝐚𝐱 – 𝐄𝐱𝐞𝐦𝐩𝐭
27. Small companies, manufacturers and agricultural businesses are exempt from withholding tax deduction on their income.
28. Small companies are exempt from deduction on their payments to suppliers.
𝐕𝐚𝐥𝐮𝐞 𝐀𝐝𝐝𝐞𝐝 𝐓𝐚𝐱 (𝐕𝐀𝐓) – 0% 𝐨𝐫 𝐄𝐱𝐞𝐦𝐩𝐭
29. Basic food items – 0% VAT.
30. Rent – Exempt.
31. Education services and materials – 0% VAT.
32. Health and medical services.
33. Pharmaceutical products – 0% VAT.
34. Small companies (≤ ₦100m turnover) are exempt from charging VAT.
35. Diesel, petrol, and solar power equipment – VAT suspended or exempt.
36. Refund of VAT on assets and overheads to produce VATable or 0% VAT goods and services.
37. Agricultural inputs – fertilisers, seeds, seedlings, feeds, and live animals.
38. Purchase, lease or hire of equipment for agric purposes.
39. Disability aids – hearing aids, wheelchairs, braille materials.
40. Transport – shared passenger road transport (non-charter).
41. Electric vehicles and parts – exempt.
42. Humanitarian supplies – exempt.
43. Baby products.
44. Sanitary towels, pads or tampons.
45. Land and building.
𝐒𝐭𝐚𝐦𝐩 𝐃𝐮𝐭𝐢𝐞𝐬 – 𝐄𝐱𝐞𝐦𝐩𝐭
46. Electronic money transfers below ₦10,000.
47. Salary payments.
48. Intra-bank transfers.
49. Transfers of government securities or shares.
50. All documents for transfer of stocks and shares
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
