Echotitbits – Nigeria News

Tag: personal income tax

  • New Tax Law Offers 50 Exemptions and Reliefs for Low-Income Earners

    New Tax Law Offers 50 Exemptions and Reliefs for Low-Income Earners

    Figures cited by The Punch show that the newly implemented tax administration framework in Nigeria includes over 50 specific exemptions and reliefs aimed at easing the burden on small businesses and low-income earners. Effective from January 1, 2026, the law exempts individuals earning the national minimum wage or less from Personal Income Tax (PAYE). Additionally, small-scale businesses with an annual gross income below a certain threshold will see significant reductions in their tax liabilities.

    This legislative move is part of the government’s broader strategy to stimulate the domestic economy by increasing the disposable income of the average Nigerian. The tax reforms also provide for reduced rates for middle-income earners and introduce “gift exemptions” to promote social welfare. Government officials believe that by simplifying the tax code and offering these reliefs, they can improve tax compliance across the informal sector.

    Leadership Newspaper highlighted the impact on workers, quoting Taiwo Oyedele who stated that the “PAYE cut increases workers’ take-home pay in January,” providing much-needed relief amid inflation. Daily Post added that “the new tax regime is expected to foster a more business-friendly environment,” especially for the burgeoning tech and creative sectors in Nigeria.

    Echotitbits take: This is a rare “pro-poor” fiscal policy that could actually move the needle on consumer spending. Watch for how the various state governments (who collect PAYE) react to the potential dip in their internally generated revenue (IGR).

    Source: The Punch – https://punchng.com/50-exemptions-and-reliefs-in-new-tax-administration-2/  January 28, 2026

    Photo Credit: Brickmans Law

  • New Tax Regime Exempts Nigerians Earning Below ₦800,000 Annually

    New Tax Regime Exempts Nigerians Earning Below ₦800,000 Annually

    According to Cowrywise Financial Blog, the new Nigerian Tax Act has officially come into full effect as of January 1, 2026, introducing a 0% tax rate for individuals earning ₦800,000 or less per year. This reform is part of a broader strategy to provide ‘social cushioning’ for low-income earners while progressively increasing the tax burden on high-net-worth individuals and large corporations. The new brackets peak at 25% for those earning over ₦150 million.

    The act also introduces significant relief for small businesses, with the ‘Development Levy’ now only applying to companies with a turnover exceeding ₦100 million. Additionally, the threshold for tax-exempt redundancy pay has been increased from ₦10 million to ₦50 million, providing a larger safety net for workers facing job losses in a fluctuating economy.

    Validating reports from Moniepoint and The Punch emphasize the focus on compliance. Moniepoint warned that ‘unregistered businesses will struggle to operate on digital platforms under the new code,’ while The Punch quoted the FIRS Chairman: ‘Our goal is a broader base, not necessarily higher rates for the common man.’

    Echotitbits take: This is the most significant overhaul of personal income tax in decades. While the ₦800k exemption is a win for the poor, the real challenge is the ‘informal sector’ capture. Watch for a massive push by the FIRS to link Bank Verification Numbers (BVN) and National Identity Numbers (NIN) to new ‘Tax IDs’ for petty traders this quarter.
    Source: TheCable – https://www.thecable.ng/key-concerns-and-benefits-as-the-new-tax-laws-take-effect/ January 5, 2026

    Photo Credit: TheCable

  • Tax reform countdown: Manufacturers upbeat as Labour and SMEs warn of backlash

    Tax reform countdown: Manufacturers upbeat as Labour and SMEs warn of backlash

    Photo Credit: The Punch
    2025-12-28 09:00:00

    Reporting by Punch indicates Nigeria’s new tax reform laws are still slated to take effect on January 1, 2026, despite widening pushback from some labour and SME stakeholders.

    Industry groups say the package could simplify compliance and reduce distortions, while critics argue implementation timing and transparency concerns around the final gazetted text could trigger new disputes.

    Government-linked reform advocates have framed the rollout as a shift toward fairness—targeting relief for most workers and smaller firms—while signalling willingness to fix drafting or referencing issues through the legislature without shifting the start date.

    Channels Television quoted committee chairman Taiwo Oyedele saying, “The implication of not implementing the new tax laws by January 1, 2026, is that the bottom 98 per cent of workers remain overtaxed.” AIT Live also reported the government “has affirmed that there will be no reversal in the planned implementation… scheduled to take effect on January 1, 2026.”

    Echotitbits take: The political test is whether implementation becomes a trust-building exercise (clear gazette, plain-language guidance, phased enforcement) or another elite policy fight. Watch the National Assembly’s re‑gazetting process and how quickly tax authorities publish compliance guides for SMEs.

    Source: The Punch — December 28, 2025 (https://punchng.com/four-days-to-tax-reform-manufacturers-excited-labour-smes-threaten-revolt/)

    The Punch 2025-12-28