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Key Changes in Tax Laws Starting January 1, 2026

The upcoming Nigerian tax regulations, scheduled to come into force on January 1, 2026, mark a major transformation of the nation’s financial structure. These changes, outlined through various new legislative measures such as the Nigeria Tax Act (NTA), the Nigeria Tax Administration Act (NTAA), and the Nigeria Revenue Service Act (NRSA), aim to simplify the taxation process, expand the taxpayer pool, and support national economic development and future prospects.

Some key aspects of the updated tax regulations include:

The updated tax regulations replace and combine several current tax laws, including the Companies Income Tax Act, the Personal Income Tax Act, the Value Added Tax Act, and the Capital Gains Tax Act, forming one unified tax system.

This approach seeks to minimize confusion, eliminate redundancy, and address the long-standing issue of overlapping taxation across various governmental tiers as well as misinterpretations. Additionally, it aims to simplify the process for taxpayers to comprehend and meet their tax responsibilities.

Individual Income Tax: Employees with an annual salary below N800,000 are now fully exempt from individual income tax.


Company Income Tax

Firms with yearly revenue reaching as much as N100 million and total tangible assets below N250 million are currently free from CIT, Capital Gains Tax, and the newly introduced Development Levy. This marks a substantial rise compared to the earlier income limit of N25 million.


VAT exemptions

The current government has eliminated Value-Added Tax for various necessary products and services, such as staple foods, school textbooks, and fees, along with public transportation options. This measure aims to reduce economic pressure on ordinary people.


Capital Gains Tax

For businesses, the CGT percentage has risen from 10% to 30%, bringing it into line with the Corporate Income Tax level. For personal taxpayers, profits from asset sales will now be subject to taxation according to the corresponding progressive income tax bracket they fall into.


Digital and Virtual Asset Taxes

New regulations expand the taxable base to encompass earnings derived from digital and virtual assets, aligning with contemporary financial activities.


Development Levy

A 4% development charge has been implemented, replacing various minor additional charges. It is applicable to taxable income for all businesses excluding small enterprises and foreign-based organizations.

The previous Pioneer Status Incentive program has been substituted by the Economic Development Tax Incentive. This updated scheme offers extended tax advantages (as long as 20 years) to companies operating within eligible industries.

New companies entering the agriculture industry are currently relieved of paying income tax during their initial five years of functioning within the nation, aiming to promote investment in agribusinesses, boost output, and improve food security.

Starting from January 1, 2026, revenues generated from products shipped out of Nigeria will be free from income tax, as long as the funds are brought back into the nation via legitimate channels.

New regulations create the Nigeria Revenue Service (NRS) as the only organization tasked with gathering taxes imposed at the federal level, seeking to merge a formerly divided system.

The Nigerian Tax Administration Act establishes a single procedural system for managing taxes, featuring rules related to pre-tax decisions, and strengthens the capabilities of tax officials to enforce compliance.

Additionally, an Office of the Tax Ombudsman has been established as an autonomous entity tasked with addressing grievances and resolving conflicts between taxpayers and revenue agencies.


New taxation regulations are expected to enhance the buying capacity of Nigerians.

– Edun


Minister


The Minister of Finance and Coordinator for the Economy, Mr. Wale Edun, stated that the new tax regulations will enhance the buying capacity of Nigerians.


Edun, who addressed an audience in Lagos recently, stated that the upcoming tax system, set to commence on January 1, 2026, will boost economic expansion.

Edun, who addressed an audience in Lagos recently, stated that the upcoming tax system, set to begin on January 1, 2026, will boost economic expansion.

The official said, “Significant changes to the taxation system have been approved by law and will take effect starting January 1. These measures, along with various enhancements, aim to provide greater financial resources and buying capacity to individuals at the lower income levels.” Naturally, this also benefits businesses. Consumers must possess sufficient purchasing power to afford products.

Edun stated, “This collaboration sends a message to both local and international investors that Nigeria is not just welcoming commerce, but also undergoing changes to boost business development and achievement.”

Project Focus:

Kano-Maradi Railway


The


The Kano-Maradi railway aims to link Kano in Nigeria with Maradi in the Niger Republic. The initiative began under the previous President Muhammadu Buhari’s government in September 2020, with work commencing in February 2021.


Connecting two adjacent nations, this initiative aims to enhance high-quality socioeconomic ties between Nigeria and one of its neighboring northern countries.

Supplied by SyndiGate Media Inc. (
Syndigate.info
).

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