By Dickson Pat
Ahead of the January 2026 implementation of Nigeria’s new tax laws, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, has continued to reel out the benefits of the expected changes.
According to the tax titan, the new tax laws will provide many reliefs and exemptions for low-income earners, average taxpayers, and small businesses in the country.
In an update on his X handle, Mr Oyedele noted that small businesses, including individuals earning the national minimum wage or less, and those earning annual gross income up to N1,200,000 (translating to about N800,000 taxable income) will benefit from the tax relief.
There will also be reduced PAYE tax for those earning annual gross income up to N20 million.
He also disclosed that gifts will also be exempt from being taxed.
Mr Oyedele further listed items to benefit from the tax relief as:
Allowable Deduction & 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 N500,000)
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 N50 million.
Capital Gains Tax (CGT) – Exempt
14. Sale of an owner-occupied house
15. Personal effects or chattels worth up to N5 million
16. Sale of up to two private vehicles per year
17. Gains on shares below N150 million per year or gains up to N10 million
18. Gains on shares above exemption threshold if the proceeds are reinvested
19. Pension funds, charities, and religious institutions ,non-commercial,
Companies Income Tax ,CIT, – Exempt
20. Small companies (turnover not more than N100 million and total fixed assets not more than N250 million) will pay 0% tax.
Small business represent a huge chunk of employers of labour with data from National Bureau of Statistics ,NBS, showing that the country has around 41.5 million micro, small, and medium-enterprises, contributing about 48% of gross domestic product ,GDP.
21. Eligible (labelled) start-ups 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 capitalists, private equity funds, accelerators, or incubators
Development Levy – Exempt
27. Small companies are exempt from 4% development levy
Withholding Tax – Exempt
28. Small companies, manufacturers and agric businesses are exempt from withholding tax deduction on their income
29. Small companies are exempt from deduction on their payments to suppliers
Value Added Tax ,VAT– 0% or Exempt
30. Basic food items – 0% VAT
31. Rent – Exempt
32. Education services and materials – 0% VAT
33. Health and medical services
34. Pharmaceutical products – 0% VAT
35. Small companies (≤ N100m turnover) are exempt from charging VAT
36. Diesel, petrol, and solar power equipment – VAT suspended or exempt
Refund of VAT on assets and overheads to produce VATable or 0% VAT goods and services
37. Agricultural inputs – fertilizers, 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)
Electric vehicles and parts – exempt
41. Humanitarian supplies – exempt
42. Baby products
43. Sanitary towels, pads or tampons
44. Land and building
Stamp Duties – Exempt
45. Electronic money transfers below N10,000
46. Salary payments
47. Intra-bank transfers
48. Transfers of government securities or shares
49. All documents for transfer of stocks and shares.
