2026 is set to roll in with a new change in all ramifications. From gubernatorial elections to the CBN’s cashless economy policy, 2026 is set to be a year of renewal, and the policy that tops the list is the new tax law.
For a country that has largely been lax when it comes to taxation, Nigeria is set to make a new turnaround in 2026 as the FG is set to initiate a new policy that requires all income-earning individuals to be taxed.
According to this new policy, individuals earning from ₦800,000 upwards will be required to provide a tax revenue of 15–30%. The new tax law in Nigeria focuses on stricter enforcement, wider tax coverage, and better use of digital systems, bringing more individuals, freelancers, online earners, and businesses into the tax net. This reform was introduced through FIRS and the Finance Acts (2020–2024), and it will take into account income earners in varying spheres like informal workers, freelancers, digital earners, etc.
To do this, bank records, BVN, NIN, and business registrations will be used to track income, and regular earners will be paying some form of tax. This policy has always been in place, but the government has been lax on it for years and has only enforced it for government workers; however, it will all change in 2026. As of the coming year, employers will have to remit PAYE correctly, while self-employed people are to register and file returns. Foreign companies offering services in Nigeria (streaming, ads, apps, platforms) will now be taxed, and Nigerian digital creators, freelancers, and online businesses are increasingly visible to tax authorities.
There is some good news, as small businesses with a turnover of ₦25 million or less will receive 0% company income tax, while medium companies of ₦25m–₦100m will pay 20%, and large companies above ₦100m will pay 30%.
For income earners, an annual taxable income of ₦300,000 or less has a 0% tax rate, as they are shielded by the Consolidated Relief Allowance (CRA). An annual taxable income of ₦300,001–₦600,000 amounts to a 7% tax rate. For an annual income of ₦600,001–₦1.1 million, the tax rate is 15%. For ₦1.2 million–₦1.6 million annual income, the tax rate is 21%, and any income higher than that is 24%.
Failure to adhere to these reforms would include consequences like fines for late filing, penalties for failure to register, business shutdowns for persistent non-remittance, and more aggressive audits. The enforcement of this tax reform is a good one, as it aims at increased government revenue, bringing more people and businesses into the tax net, reducing over-dependence on oil, making tax collection more efficient and digital, and closing loopholes used for tax evasion.
However, many Nigerians don’t see the need, as public infrastructure remains desolate and unmaintained, with no improvement in public services, while inflation is still at an all-time high. Many wonder if this is a good idea during a time like this. Despite the varying opinions, there is no denying that 2026 is set to be a year of relearning for many Nigerians, and it will be the dawn of a new tax era for all income earners.
