On Thursday, June 26, President Bola Tinubu signed a suite of reform bills into law. The four bills, covering not just how much taxes should be paid but also how they should be collected, represent a significant move to overhaul the tax system in Africa’s most populous nation.
In a post on X, the president hailed the legislation as altruistic measures that provide “targeted relief for low-income earners, small businesses, and working families across the country.”
The four new bills are the Nigeria Tax Bill (Ease of Doing Business), Nigeria Tax Administration Bill, Nigeria Revenue Service Bill, and the Joint Revenue Board Bill.
While the new system will be implemented in January 2026, here’s how the tax reform will affect you—whether you’re a parent, entrepreneur, CEO, or even a religious leader.
No personal tax for low-income earners
Low-income households stand to benefit the most, as families with a monthly income of less than N250,000 will be exempt from paying any personal tax under the new reforms
Tax relief on essential goods and services
What’s more, essential items such as food, pharmaceuticals, electricity, residential rent and even baby nappies will incur no value-added tax (VAT). With almost half the country’s population earning less than N50,000 monthly, this waiver will reduce the cost of living for many, ensuring that you have more cash at hand to afford their basic needs. More disposable income will consequently boost the country’s standard of living.
Support for small businesses and informal traders
Another merit of the new tax law is the increased threshold for businesses in the country. If you manage a small company—one with an annual turnover of less than N100 million—you will now be exempt from company income tax and other such obligations like withholding tax.
While this reduces the financial burden on your startup, this also means less paperwork and bureaucracy when filing returns. As such, other small business owners are even motivated to comply with the new tax system.
While corporate tax rates for large businesses are set to drop from 30% to 25%, high-income earners may feel the pinch. Under the new tax regime, individuals with gross annual income above N100 million will likely attract increased personal income tax of up to 25%, as the law adopts a progressive model.
Boost for agriculture and nonprofits
Additionally, agro ventures are set to see some tax incentives. For example, if you run a company that’s involved in cocoa processing, livestock, animal feed production, and forms of agriculture, you will be exempt from income tax for the first five years of business.
Likewise, charities, cooperatives, and religious outfits will receive tax incentives so long as their earnings are not from commercial operations.
The recent tax framework aims to be fairer and more inclusive. It promises succour for many Nigerian families, reduces the burden on vulnerable groups and boosts economic growth by supporting small businesses. If followed through, it could significantly reduce inequality, enhance entrepreneurship and expand government revenue for critical social services for the benefit of all citizens.
President Bola Tinubu has signed four tax reform bills into law, aiming to overhaul the tax system in Nigeria. These bills are the Nigeria Tax Bill (Ease of Doing Business), Nigeria Tax Administration Bill, Nigeria Revenue Service Bill, and the Joint Revenue Board Bill. Key changes include eliminating personal taxes for low-income households earning less than N250,000 monthly and removing VAT from essential goods such as food and pharmaceuticals, thereby reducing the cost of living and boosting disposable income.
The tax reforms also support small businesses, exempting those with annual turnovers below N100 million from company income tax. This aims to reduce financial burdens and encourage compliance by simplifying bureaucracy. While large business corporate tax rates will drop from 30% to 25%, high-income earners will face personal income tax rates of up to 25%, following a progressive model. Moreover, agriculture and nonprofit sectors will benefit from various tax incentives, fostering growth and exempting agro ventures from income tax for the first five years.
These reforms strive to be fairer and more inclusive, offering relief to vulnerable groups, promoting entrepreneurship, and potentially enhancing government revenue for essential social services. The new tax framework is set to be implemented in January 2026, aiming to reduce inequality and support economic growth across Nigeria.
