The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, has unveiled a comprehensive package of 50 tax exemptions and reliefs designed to ease the financial burden on low-income earners, average taxpayers, and small businesses.
The measures form part of Nigeria’s new tax reform framework, scheduled to take effect on January 1, 2026.
In a statement posted on his official X (formerly Twitter) handle, Oyedele described the initiative as “one of the most people-focused tax reforms in Nigeria’s recent history,” highlighting its commitment to fairness, simplicity, and inclusiveness in the country’s fiscal system.
He explained that the reforms aim to reduce tax pressure on vulnerable groups and key productive sectors while promoting voluntary compliance and improving the ease of doing business.
“From 1 January 2026, the new tax laws will provide many reliefs and exemptions for low-income earners, average taxpayers, and small businesses,” Oyedele said.
Highlights of the 50 Tax Reliefs and Exemptions
Personal Income Tax:
Individuals earning the national minimum wage or below will be fully exempt from income tax.
Annual gross income of up to ₦1.2 million (approximately ₦800,000 taxable income) will attract no tax.
Reduced PAYE rates will apply to individuals earning up to ₦20 million annually.
Gifts and donations made by individuals will also qualify for tax exemption.
Allowable Deductions and Reliefs for Individuals:
Pension contributions, National Health Insurance, and National Housing Fund contributions will remain fully deductible.
Deductions will also apply to interest on loans for owner-occupied housing, life insurance or annuity premiums, and rent relief of up to ₦500,000 or 20% of annual rent, whichever is lower.
Pensions and Gratuities:
All pensions, gratuities, and retirement benefits under the Pension Reform Act will be fully exempt from tax.
Compensation for loss of employment up to ₦50 million will also be tax-free.
Capital Gains Tax:
Exemption applies to the sale of owner-occupied homes, personal effects worth up to ₦5 million, and up to two private vehicle sales per year.
Share gains below ₦150 million annually or ₦10 million per transaction will be tax-free, with additional relief for reinvested proceeds.
Companies Income Tax:
Small companies with an annual turnover below ₦100 million and total fixed assets not exceeding ₦250 million will pay 0% CIT.
Eligible startups as defined by government guidelines will also enjoy CIT exemption.
Employers providing salary increases or transport subsidies to low-income workers will receive a 50% compensation relief.
Agricultural enterprises—including crop production, livestock, and dairy farming—will benefit from a five-year tax holiday.
6. Development Levy:
Small companies are exempt from the 4% development levy.
Withholding Tax:
Small companies, manufacturers, and agricultural businesses will be exempt from withholding tax deductions on their income and payments to suppliers.
Value Added Tax:
Basic food items, rent, educational materials, healthcare services, and pharmaceuticals will attract 0% or exempt VAT status.
Small businesses earning below ₦100 million annually will not be required to charge VAT.
Agricultural inputs, disability aids, baby products, sanitary towels, electric vehicles and parts, and humanitarian supplies are VAT-exempt.
Stamp Duties:
Electronic transfers below ₦10,000, salary payments, intra-bank transfers, and transactions involving government securities or shares will be exempt from stamp duties.
Encouraging Responsible Tax Communication:
Beyond fiscal measures, Oyedele also introduced an initiative to foster accurate public awareness of the reforms.
He urged Nigerians to nominate social media creators who educate their audiences about the new tax laws for a special “Influencing for Good” training program.
According to him, misinformation about taxation spreads quickly and often misleads citizens, while accurate, balanced communication helps empower people and build public trust.
