FROM 1 January 2026, the new tax laws will provide many reliefs and exemptions for low-income earners, average taxpayers, and small businesses including:

𝐏𝐞𝐫𝐬𝐨𝐧𝐚𝐥 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 𝐨𝐫 𝐏𝐀𝐘𝐄

Individuals earning the national minimum wage or less (exempt)
Annual gross income up to ₦1,200,000 (translating to about ₦800,000 taxable income) is exempt
Reduced PAYE tax for those earning annual gross income up to ₦20 million 4. Gifts (exempt)

𝐀𝐥𝐥𝐨𝐰𝐚𝐛𝐥𝐞 𝐃𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧𝐬 & 𝐑𝐞𝐥𝐢𝐞𝐟𝐬 𝐟𝐨𝐫 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐬

Pension contribution to PFA
National Health Insurance Scheme
National Housing Fund contributions
Interest on loans for owner-occupied residential housing
Life insurance or annuity premiums
Rent relief – 20% of annual rent (up to ₦500,000)

𝐏𝐞𝐧𝐬𝐢𝐨𝐧𝐬 & 𝐆𝐫𝐚𝐭𝐮𝐢𝐭𝐢𝐞𝐬 – 𝐄𝐱𝐞𝐦𝐩𝐭

Pension funds and assets under the Pension Reform Act (PRA) are tax-exempt.
Pension, gratuity or any retirement benefits granted in line with the PRA 13. Compensation for loss of employment up to ₦50 million

𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐚𝐢𝐧𝐬 𝐓𝐚𝐱 (𝐂𝐆𝐓) – 𝐄𝐱𝐞𝐦𝐩𝐭

Sale of an owner-occupied house
Personal effects or chattels worth up to ₦5 million
Sale of up to two private vehicles per year
Gains on shares below ₦150 million per year or gains up to ₦10 million
Gains on shares above exemption threshold if the proceed is reinvested
Pension funds, charities, and religious institutions (non-commercial)

𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 (𝐂𝐈𝐓) – 𝐄𝐱𝐞𝐦𝐩𝐭

Small companies (turnover not more than ₦100 million and total fixed assets not more than ₦250 million) pay 0% tax
Eligible (labelled) startups are exempt
Compensation relief – 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income workers
Employment relief – 50% deduction for salaries of new employees hired and retained for at least three years
Tax holiday for the first 5-years for agricultural businesses (crop production, livestock, dairy etc)
Gains from investment in a labeled startup by venture capitalist, private equity fund, accelerators or incubators

𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐋𝐞𝐯𝐲 – 𝐄𝐱𝐞𝐦𝐩𝐭

Small companies are exempt from 4% development levy

𝐖𝐢𝐭𝐡𝐡𝐨𝐥𝐝𝐢𝐧𝐠 𝐓𝐚𝐱 – 𝐄𝐱𝐞𝐦𝐩𝐭

Small companies, manufacturers and agric businesses are exempt from withholding tax deduction on their income
Small companies are exempt from deduction on their payments to suppliers

𝐕𝐚𝐥𝐮𝐞 𝐀𝐝𝐝𝐞𝐝 𝐓𝐚𝐱 (𝐕𝐀𝐓) – 0% 𝐨𝐫 𝐄𝐱𝐞𝐦𝐩𝐭

Basic food items – 0% VAT
Rent – Exempt
Education services and materials – 0% VAT
Health and medical services
Pharmaceutical products – 0% VAT
Small companies (≤ ₦100m turnover) are exempt from charging VAT
Diesel, petrol, and solar power equipment – VAT suspended or exempt
Refund of VAT on assets and overheads to produce VATable or 0% VAT goods and services
Agricultural inputs – fertilizers, seeds, seedlings, feeds, and live animals
Purchase, lease or hire of equipment for agric purposes
Disability aids – hearing aids, wheelchairs, braille materials
Transport – shared passenger road transport (non-charter)
Electric vehicles and parts – exempt
Humanitarian supplies – exempt
Baby products
Sanitary towels, pads or tampons
Land and building𝐒𝐭𝐚𝐦𝐩 𝐃𝐮𝐭𝐢𝐞𝐬 – 𝐄𝐱𝐞𝐦𝐩𝐭