What Changed in 2026?
A comprehensive guide to the Nigeria Tax Act 2025 and its impact on your finances from January 2026.
1. Personal Income Tax (PIT)
The 2026 reform introduces a more progressive tax structure to ease the burden on low-income earners while ensuring high-income individuals contribute their fair share.
| Adjusted Annual Income (₦) | Tax Rate |
|---|---|
| 0 - 800,000 | 0% (Exempt) |
| 800,001 - 3,000,000 | 15% |
| 3,000,001 - 12,000,000 | 18% |
| 12,000,001 - 25,000,000 | 21% |
| 25,000,001 - 50,000,000 | 23% |
| Above 50,000,000 | 25% (Top Rate) |
2. The New Rent Relief System
One of the most significant changes is the repeal of the Consolidated Relief Allowance (CRA). It has been replaced by a direct Rent Relief system:
- ✅ You can deduct 20% of your annual rent from your taxable income.
- ⚠️ This relief is capped at a maximum of ₦500,000 per year.
- 📄 You must keep valid rent receipts for your workspace or home-office to claim this.
3. Small Business & CIT
Businesses are grouped into three categories based on their annual turnover:
Small Companies
Turnover ≤ ₦50 Million
0% CITExempt from Companies Income Tax and Education Tax.
Larger Companies
Turnover > ₦50 Million
30% CIT + 4% LevySubject to standard CIT and the new consolidated Development Levy.
4. Tax Saving Tips
- Keep Every Receipt: With the new laws, documenting deductible expenses (Raw materials, Staff salaries, etc.) is the best way to lower your tax liability legally.
- Venture into Exports: Many export-related incomes remain zero-rated or exempt under the 2026 rules.
- Pension & Insurance: Contributions to pension funds and life insurance premiums remain fully deductible.
Want to see how these changes affect you specifically?
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