Under the new tax regime in Nigeria, the name of the country’s tax agency, Federal Inland Revenue Service (FIRS), is changed to Nigeria Revenue Service (NRS). The reforms, which are signed into law by President Bola Ahmed Tinubu (PBAT), will take effect on January 1, 2026.
What this means is that NRS will be collecting all federal taxes, including those hitherto collected by Customs, NPA, NIMASA & NUPRC, TNT understands.
The good news is that tax experts say Nigerians who earn Eight Hundred Thousand Naira (N800,000.00) or less are exempt from paying tax under the new tax regime. For instance, if you earn Sixty Thousand Naira (N60,000.00) per month, you are exempt from paying tax.
Those who earn Fifty Million Naira (N50,000,000.00) and above per year will pay 25 per cent personal tax.
The implication is that small business owners – salon, mechanic, akara business, or tailoring – are free from paying tax.
Ultimately, company income tax is reduced under the new tax regime from 30 per cent to 25 per cent. Experts say this will enable big and medium businesses to save more.
Furthermore, there is no more Value Added Tax (VAT) on food, electricity, school fees, medicine, and hospital services, giving Nigerians relief, one tax expert said.
Although VAT still remain at 7.5, company income tax at 30 per cent, a new Development Levy of 2 per cent to 4 per cent is expected to support, NELFUND (student loan), TETFund (schools), NITDA (technology), and NASENI (innovation).
On the whole, experts say the new tax regime which is due to come into effect from January 1, 2026, means poor people will get tax break, small businesses are safe, big earners and companies will pay more in taxes while there will be more funds for education and technology.
