Breaking Down Nigeria’s New Tax Laws: What You Gain, What You Pay

President Bola Tinubu has just signed four new tax laws into effect but don’t scroll away just yet.

This isn’t a legal briefing for tax experts. It’s a real-world breakdown for you: the small business owner, salary earner, remote worker, or side hustler. These reforms will directly impact your income, expenses, and the way you manage money.

Here’s what you need to know, no jargon, just straight talk.

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✨ The Good News First

Small Business Owners: You Just Got a Major Tax Break

If your business earns ₦50 million or less per year, you no longer have to pay Company Income Tax (CIT).

Before now, only businesses earning below ₦25 million qualified for that exemption. This means more money stays in your business — whether you run a POS station, fashion brand, bakery, foodstuff store, or any other micro-enterprise.

Bottom line: This is a win for entrepreneurs and side hustlers.

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Salary Earners: You Can Breathe Easier

If your monthly salary is ₦83,000 or less (₦1 million per year), you’ll now pay zero PAYE (Pay-As-You-Earn) tax.

Even if you earn more up to ₦1.7 million per month you’ll still benefit from reduced PAYE because of new personal tax reliefs. That means more money in your account at the end of the month, giving you more room to save, invest, or enjoy life.

This is a long-overdue break for honest earners.

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Laid Off or Retiring? There’s Some Comfort

If you’re receiving a severance or retirement package, the first ₦50 million is now completely tax-free.

This is not just a financial benefit, it’s a dignified gesture that protects people during periods of transition or hardship.

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🍚 VAT Removed on Essentials

The new laws also cut costs on things you use daily by removing VAT (Value Added Tax) from key items:
• Basic food items
• Baby products
• School fees
• Electricity bills
• Hospital bills

This means your groceries, children’s tuition, and medical care will now be cheaper. In a country where household costs are rising, this is a much-needed relief for families.

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💻 Remote Workers & Freelancers: Time to Get Compliant

Work remotely for a foreign company? Earning in dollars, pounds, or euros?

Here’s what the law now requires:
• ✅ Register with your state tax authority
• ✅ Declare your income in naira
• ✅ Pay tax like every other Nigerian resident

Some people may be thinking, “How will they know?”

If your foreign earnings flow through accounts like Payoneer, Wise, or Barter, and those accounts are linked to your BVN or Nigerian bank, then your income is already visible to tax authorities.

What’s more due to international tax treaties, clients and companies in “compliant countries” (like the U.S. or UK) can now legally report payments made to you.

The era of flying under the radar is coming to an end. Plan ahead.

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🛠️ The Tax Process Is Getting Simpler and Smarter

One of the biggest pain points for Nigerians has always been the confusing tax structure. But these new reforms aim to fix that:
• Multiple taxes will be streamlined
• Digital filing and payments will become standard
• The Federal Inland Revenue Service (FIRS) will be replaced by a new body: the Nigeria Revenue Service (NRS)

The NRS will be more independent, more transparent, and will also be responsible for collecting non-tax revenues.

Also on the way is a Joint Revenue Board so both federal and state tax authorities stop harassing you over the same taxes.

And if you’re treated unfairly? You now have the right to appeal or report issues through a Tax Appeal Tribunal and Tax Ombudsman. Finally some balance.

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⏳ When Does This All Take Effect?

Most of these changes will kick in by 2026.
That gives you time to learn, plan, and restructure how you manage taxes and income especially if you’re in business or earning abroad.

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🧾 What It All Means: A Quick Summary
• ✅ Small businesses are now exempt from income tax up to ₦50M
• ✅ Low and middle-income earners will see tax relief
• ✅ Remote workers/freelancers must start declaring income
• ✅ Tax collection is becoming more organized, unified, and digital
• ✅ Dispute resolution is now more accessible and fair

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💡 Final Thoughts

These new tax laws are not just about government revenue — they’re about building a fairer, clearer system for everyone.