Nigeria's 2026 tax reform: what actually changed

The Nigeria Tax Act 2026 is the most significant reset of the country's tax rules in years. For business owners and finance leaders, the changes are not just compliance housekeeping; they reshape how much tax you pay and where the opportunities to optimise now sit.

On personal income tax, the first ₦800,000 of annual income is now tax-free, and the bands run from 15% to 25%. Reliefs matter more than ever: pension contributions (8%), the National Housing Fund (2.5%), life assurance premiums, and a new rent relief of 20% of gross income capped at ₦500,000.

For companies, small businesses below the turnover threshold enjoy a 0% CIT rate; but the relief explicitly excludes professional-service firms, so many advisory businesses will not qualify. Medium and large companies also face a 4% development levy on assessable profits.

VAT holds at 7.5% with zero-rating reinforced on essentials, while withholding tax remains 5% on most services and 2% on goods. The practical takeaway: revisit your structure now. The businesses that treat this reform as a planning opportunity, rather than a filing chore, will protect real margin.