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Understanding the new Tax Reform Laws: Fifty Tax Exemptions and Reliefs that will Benefit the Masses Under the new Tax Reform Laws

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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 ( 𝐏𝐀𝐘𝐄)

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

𝐀LLOWABLE 𝐃EDUCTIONS & 𝐑ELIEFS FOR INDIVIDUALS

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

𝐏ENSIONS & 𝐆RATUITIES – 𝐄XEMPT

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

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𝐂APITAL 𝐆AINS 𝐓AX (𝐂𝐆𝐓) – 𝐄XEMPT

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

𝐂OMPANIES 𝐈NCOME 𝐓AX (𝐂𝐈𝐓) – 𝐄XEMPT

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

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𝐃EVELOPMENT 𝐋EVY – 𝐄XEMPT

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26. Small companies are exempt from 4% development levy

𝐖ITHOLDING 𝐓AX – 𝐄XEMPT

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

𝐕ALUE 𝐀DDED 𝐓AX (𝐕𝐀𝐓) – 0% 𝐄XEMPT

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

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𝐒TAMP 𝐃UTIES – 𝐄XEMPT

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46. Electronic money transfers below ₦10,000
47. Salary payments
48. Intra-bank transfers
49. Transfers of government securities or shares
50. All documents for transfer of stocks and shares

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𝐈𝐍𝐅𝐋𝐔𝐄𝐍𝐂𝐈𝐍𝐆 𝐅𝐎𝐑 𝐆𝐎𝐎𝐃

Nominate a content creator who’s been educating their audience about Nigeria’s new tax reform laws or someone you’d like to see do so.

We’ll be selecting the top 20 creators with the most nominations for a special training to help them share accurate, balanced, and useful tax information with their followers.

Misinformation spreads fast, often to the author’s benefit but to the audience’s loss. Accurate information may travel slower, but it empowers everyone, and earns lasting trust.

Tag or mention your favourite influencer to nominate or fill the nomination form forms.gle/15kyv1ffx7tzTL…. Nomination closes on 9 November 2025.

– 𝘗𝘳𝘦𝘴𝘪𝘥𝘦𝘯𝘵𝘪𝘢𝘭 𝘍𝘪𝘴𝘤𝘢𝘭 𝘗𝘰𝘭𝘪𝘤𝘺 & 𝘛𝘢𝘹 𝘙𝘦𝘧𝘰𝘳𝘮𝘴 𝘊𝘰𝘮𝘮𝘪𝘵𝘵𝘦𝘦