Nigeria’s overhaul of its tax system has been in force since 1 January 2026, bringing in exemptions for small businesses and low-income earners that the government presents as a core part of its reform programme.
The reform rests on four laws: the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act and the Joint Revenue Board (Establishment) Act.
Small companies
Companies with an annual turnover below ₦100 million and fixed assets below ₦250 million are classed as small companies. They are exempt from Company Income Tax, Capital Gains Tax and the 4 per cent Development Levy.
Small companies must still register for a Tax Identification Number (TIN) and file returns.
Low earners
Minimum-wage earners, and individuals with an annual gross income of up to ₦1.2 million, are exempt from personal income tax. The government has announced 50 reliefs and exemptions targeted at low-income earners and small and medium-sized enterprises.
Collections up
Tax collections rose from ₦12.3 trillion in 2023 to ₦28.3 trillion in 2025, according to a government-linked report.
On those figures, collections more than doubled in two years, even as the new laws took the smallest firms and lowest earners out of key taxes.
Tax restructuring is one of three reforms, alongside fuel subsidy removal and currency reform, for which President Bola Ahmed Tinubu thanked young supporters at State House on 19 October. “You understood that a nation cannot borrow its way to greatness,” he told them.
The World Bank’s October Nigeria Development Update found that federation revenues rose 69 per cent in real terms between 2023 and 2025, with states the biggest beneficiaries.
For small business owners, the practical message is that exemption does not mean invisibility: registration and filing remain required even where no tax is due.
Sources
- Techpoint Africa — Guide to the Nigerian tax reform acts
- allAfrica — Tax reform reliefs and exemptions
- NAN — 2026 tax reforms: matters arising
- Nairametrics — World Bank raises Nigeria’s 2026 growth forecast
This report is compiled from the public news reports and official statements listed above. Quotes and figures are attributed to those who made them.