Nigeria’s landmark Tax Reform Acts, signed into law in June 2025, officially took effect on January 1, 2026, marking the most comprehensive overhaul of the country’s tax system in decades.
While the laws are now in force, experts and government officials indicate that the most noticeable effects on everyday Nigerians—particularly in take-home pay and consumer prices—will start becoming evident from late January or February 2026.
This delay stems from practical implementation timelines: employers must update payroll systems to reflect new Personal Income Tax (PIT) exemptions and progressive rates, meaning the first adjusted salaries under Pay As You Earn (PAYE) will likely appear in January or February payslips.
For low-income earners (those making ₦800,000 or less annually), this could translate to zero PIT deductions, providing immediate relief for about 98% of workers.
Broader economic impacts, such as potential reductions in food and essential goods prices due to expanded VAT exemptions on basics like groceries, pharmaceuticals, and education, are expected to materialise gradually throughout Q1 and Q2 of 2026 as businesses adjust pricing and supply chains.
Small businesses with turnover below ₦100 million will benefit from exemptions on corporate taxes and VAT, fostering growth over the coming months.
Government projections highlight long-term gains like streamlined compliance and fairer burden-sharing, but officials acknowledge that full benefits— including lower inflation contributions and increased disposable income—will unfold progressively in 2026, with proponents urging patience as systems stabilise amid ongoing public education efforts.