50 new Nigerian tax exemptions and how to file them by 2026

Personal Income Tax (PAYE)

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  Individuals earning the national minimum wage or less will be exempt.
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  Annual gross income up to ₦1,200,000 (approximately ₦800,000 taxable income) will be exempt.
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  Reduced PAYE tax rates will apply for those earning an annual gross income up to ₦20 million.
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  Gifts received will be exempt from taxation.

Allowable Deductions and Reliefs for Individuals

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  Contributions to a Pension Fund Administrator (PFA) are deductible.
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  Contributions to the National Health Insurance Scheme are deductible.
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  Contributions to the National Housing Fund are deductible.
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  Interest on loans for owner-occupied residential housing will be deductible.
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  Premiums paid for life insurance or annuities are deductible.
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  Rent relief is available at 20% of annual rent, capped at ₦500,000.

Pensions and Gratuities

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  Pension funds and assets managed under the Pension Reform Act (PRA) will be tax-exempt.
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  Pensions, gratuities, or any retirement benefits granted in line with the PRA will be exempt.
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  Compensation for loss of employment up to ₦50 million will be exempt.

Capital Gains Tax (CGT) Exemptions

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  Gains from the sale of an owner-occupied house will be exempt.
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  Gains from the sale of personal effects or chattels worth up to ₦5 million will be exempt.
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  Gains from the sale of up to two private vehicles per year will be exempt.
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  Gains on shares below ₦150 million per year or gains up to ₦10 million will be exempt.
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  Gains on shares exceeding the exemption threshold will be exempt if the proceeds are reinvested.
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  Gains from pension funds, charities, and religious institutions (for non-commercial activities) will be exempt.

Companies Income Tax (CIT) Exemptions

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  Small companies, defined as those with turnover not exceeding ₦100 million and total fixed assets not exceeding ₦250 million, will pay 0% tax.
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  Eligible and labelled startups will be exempt from CIT.
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  Compensation relief will provide a 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income workers.
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  Employment relief will offer a 50% deduction for salaries of new employees hired and retained for at least three years.
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  Agricultural businesses, including crop production, livestock, and dairy, will receive a tax holiday for their first 5 years.
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  Gains from investments in labelled startups by venture capitalists, private equity funds, accelerators, or incubators will be exempt.

Development Levy Exemptions

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  Small companies will be exempt from the 4% development levy.

Withholding Tax Exemptions

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  Small companies, manufacturers, and agricultural businesses will be exempt from withholding tax deductions on their income.
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  Small companies will have exemptions from withholding tax deductions on their payments to suppliers.

Value Added Tax (VAT) - 0% or Exempt

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  Basic food items will attract 0% VAT.
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  Rent will be exempt from VAT.
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  Education services and materials will attract 0% VAT.
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  Health and medical services will be exempt from VAT.
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  Pharmaceutical products will attract 0% VAT.
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  Small companies with a turnover of ₦100 million or less will be exempt from charging VAT.
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  VAT will be suspended or exempt on diesel, petrol, and solar power equipment.
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  VAT refunds will be provided on assets and overheads used to produce VATable or 0% VAT goods and services.
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  Agricultural inputs, including fertilizers, seeds, seedlings, feeds, and live animals, will be exempt from VAT.
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  The purchase, lease, or hire of equipment for agricultural purposes will be exempt from VAT.
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  Disability aids such as hearing aids, wheelchairs, and braille materials will be exempt from VAT.
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  Shared passenger road transport (non-charter) will be exempt from VAT.
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  Electric vehicles and parts will be exempt from VAT.
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  Humanitarian supplies will be exempt from VAT.
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  Baby products will be exempt from VAT.
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  Sanitary towels, pads, or tampons will be exempt from VAT.
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  Land and building transactions will be exempt from VAT.

Stamp Duties Exemptions

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  Electronic money transfers below ₦10,000 will be exempt from stamp duties.
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  Salary payments will be exempt from stamp duties.
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  Intra-bank transfers will be exempt from stamp duties.
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  Transfers of government securities or shares will be exempt from stamp duties.
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  All documents related to the transfer of stocks and shares will be exempt from stamp duties.

Step 1: Master Self-Assessment and Maintain Records

To claim any deduction, official documentation proving the payment is essential. This necessitates taking charge of income declaration and tax filing. It is crucial to maintain a digital or physical file of all payslips, bank statements, receipts, and agreements for at least six years. These records serve as the sole evidence to support claims during a tax audit.

Step 2: Prioritize Retirement Savings Contributions

Contributions made to a statutory retirement savings account can reduce taxable income. The typical statutory contribution involves 18%, with 10% from the employer and 8% from the employee. Self-employed individuals can open their own RSA and contribute, effectively fulfilling both employer and employee roles.

Step 3: Utilize FIRS or SIRS E-Portals or Physical Offices

Individuals and business owners can file personal income tax returns electronically through the e-Filing portals of the Federal Inland Revenue Service (FIRS) or the State Board Internal Revenue Service (SIRS). Alternatively, paper tax returns can be submitted at the nearest FIRS or SIRS tax office, or by using the services of an accredited tax professional or agent.

Step 4: Engage a Tax Professional for Business Needs

Small business owners should consult a qualified tax accountant or consultant, particularly when planning financial strategies for 2026 and beyond. Professional guidance is vital for structuring revenue and expenditure flows in a manner that ensures legal compliance while minimizing tax liabilities.