Nigeria’s 2026 Tax Reform

Substantive legislative changes affect employee taxation, benefits in kind, deductions, and tax rates in Nigeria

It is recommended that employers satisfy themselves of the employee’s entitlement to the RRA claim before processing it through payroll.

Tax Exemptions Adjusted

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Loss of Office or Employment

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The tax-exempt threshold has increased from ₦10 million to ₦50 million. Amounts exceeding this will now be taxed at progressive rates, rather than a flat 10%.

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Low-Income Earners

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Employees earning the minimum wage or less are fully exempt from income tax.

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Tax Bands

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The tax bands have been revised as follows:

First 800,000: 0%
Next 2,200,000: 15%
Next 9,000,000: 18%
Next 13,000,000: 21%
Next 25,000,000: 23%

𝘐𝘧 𝘢𝘯 𝘦𝘮𝘱𝘭𝘰𝘺𝘦𝘳 𝘩𝘢𝘴 𝘢𝘯𝘺 𝘶𝘯𝘤𝘦𝘳𝘵𝘢𝘪𝘯𝘵𝘺 𝘢𝘣𝘰𝘶𝘵 𝘸𝘩𝘦𝘵𝘩𝘦𝘳 𝘵𝘩𝘦 𝘢𝘣𝘰𝘷𝘦 𝘢𝘱𝘱𝘭𝘪𝘦𝘴 𝘵𝘰 𝘵𝘩𝘦𝘪𝘳 𝘦𝘮𝘱𝘭𝘰𝘺𝘦𝘦𝘴, 𝘪𝘵 𝘪𝘴 𝘳𝘦𝘤𝘰𝘮𝘮𝘦𝘯𝘥𝘦𝘥 𝘵𝘩𝘢𝘵 𝘭𝘦𝘨𝘢𝘭 𝘢𝘥𝘷𝘪𝘤𝘦 𝘣𝘦 𝘴𝘰𝘶𝘨𝘩𝘵.

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Deoné Ferreira

Tax Mangager, Praxima