All You Need To Know About New Tax Laws: 30 Questions and Answers
- Nigeria’s new tax laws take effect from January 1, 2026, with JRBEA and NRSEA already active since June 26, 2025
- There have been misconceptions and false narratives about the new tax laws introduced by President Bola Tinubu
- Several Exemptions are contained in the law and cover low-income earners, pensions, military salaries and small businesses
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Nigeria’s new tax law has taken effect, reshaping how individuals and businesses register, file, and pay taxes.
Below is a comprehensive question and answer guide explaining what has changed, who is affected, and what taxpayers should expect in the months ahead.
Source: Twitter
Experts at VFD microfinances has provided insight into the new tax laws.
Q1. When does the new tax laws take effect?
The Joint Revenue Board of Nigeria (Establishment) Act(JRBEA), 2025 and Nigeria Revenue Service (Establishment) Act (NRSEA) 2025 took effect from 26 June 2025, while the Nigeria Tax Act (NTA) and Nigeria Tax Administration Act (NTAA) will take effect on 1 January 2026.
Q2. Will deposits or transfers into my bank account be taxed?
A: No, mere deposits or transfers into your bank account are not automatically taxed.
However, deposit or transfer that constitute an income into your bank account may be reviewed for tax purposes where your income exceeds the exemption threshold for small business and companies. So, it will be good to have a clear narration on all banking transactions.
Q3. Will tax authorities now monitor my bank accounts in order to charge tax?
A: No, NTAA requires banks and financial institutions to render returns to the revenue authorities where monthly transactions exceed N25 million and N100 million for individuals and businesses respectively.
However, this does not automatically translate to direct debit from your bank accounts. [Section 29, NTAA].
Q4. Does the tax authority have the power to debit my account without any form of engagement/notice?
A: No, the tax authority does not have the power to debit your bank account without any form of engagement. The law only prescribes a power of substitution which suggests that the tax authority can appoint any person to assist with the recovery of taxes due, where the tax payer has failed to pay after series of demand notice/letter has been served. [Section 60, NTAA]
Q5.Will my bank account be closed on 1 January 2026 if I do not have a tax a taxpayer ID?
A: No, the law does not mandate banks to close your accounts where you do not have a tax ID.
However, the law only requires a person engaged in banking, insurance, stock-broking or other financial services in Nigeria to ensure that every taxable person provides a Tax ID.
This is not a new requirement of the law. [Section 8, NTAA] In addition, the Nigerian Tax IDPortal has been linked to the National Identification Number (NIN) data base for ease of generating and retrieving tax ID in Nigeria.
Q6. As a Nigerian that relocated abroad, will the remittances in my bank account be taxed.
A: No, remittances into your Nigerian bank account will not be liable to tax as this income has already suffered tax in the source country. In addition, it does not constitute an income arising from a new economic activity. [Section 4, NTA].
Q7. As a Nigerian that relocated abroad, will the remittances repatriated to my family in Nigeria be taxed in their bank accounts?
A: No, gift is not taxable inflow as they do not constitute a transaction resulting from an economic activity. [Section 4, 163 ΝΤΑ].
Q8. As a Nigerian that relocated abroad, does having a permanent place for my domestic use in Nigeria mean I will pay taxes on the income earned from my new country of residence in Nigeria?
A: No, taxes will still be paid to the country you earned your income. However, you may use the taxes paid in the source country as a credit to offset taxes due in Nigeria based on unilateral/bilateral tax rules.
Q9. As a Nigerian that relocated abroad, does having a permanent place for my domestic use in Nigeria mean I will pay taxes on my balance with a Nigerian bank?
A: No, remittances into your Nigerian bank account will not be liable to tax as this income has already suffered tax in the source country. In addition, it does not constitute an income arising from a new economic activity. [Section 4, NTA].
Q13. As a remote worker in Nigeria, am I liable to pay tax on income earned from abroad?
A:Yes, income gains or profits of an individual who is a resident of Nigeria are deemed to accrue in Nigeria and are chargeable to tax in Nigeria wherever they arise, and whether or not the income, profits or gains have been brought into or received in Nigeria.
However, please note that tax will not be deducted at source from your bank account.[ Section 12, NTA]
Q14. Is it true that individuals earning below National Minimum Wage or N800,000 per year are exempt from tax?
A:Yes, individuals earning up to National Minimum Wage or N800,000 per year are exempt from PIT, reducing the burden on low-income earners.
The law also prescribes an additional exemption on any amount paid to low-income earners that takes their annual income up to N1,200,000 annually. [Section 163, ΝΤΑ].
Q15. Are scholarships, grants, or awards considered taxable income?
A: Scholarships to students are not taxable. However, grants and awards are considered taxable income where they are not specifically exempted. [Section 4, NTA]
Q16. As an individual or an unincorporated business owner, will I pay personal income tax or company income tax?
A: If you run a sole proprietorship or unincorporated business (just you, or you and partners, without forming a limited liability company), then you pay Personal Income Tax (PIT) on your business profits (plus any other income).
Q17. Do low-income earners still need to file tax returns even if they are exempt?
A: Yes, every taxpayer must file a tax return, irrespective of income.
[Section 13, NΤΑΑ]
Source: Getty Images
Q18. Are salaries of military officers taxable?
A: NTA exempts wages and salaries of military officers from tax.
[Section 163, ΝΤΑ]
Q19. As a pensioner, will my pension be taxed in 2026?
A: Pension funds and assets, gratuity or any other retirement benefits are exempted from taxes. [Section 163, NTA]
Q20. How are cryptocurrencies taxed under the new acts?
A: Since Capital Gains Tax (CGT) Act was repealed, crypto gains would be taxed corporate tax rate or personal income tax rate. This relates to both crypto being held as stock in trade or as a store of value. [Section 27, NTA].
Q21. Are crypto gains liable to tax?
A: Yes, gains from crypto are liable to tax. [Section 4, NTA].
Q22. If I sell shares and make a profit, will I be liable to tax in 2026?
A: No. Except where disposal proceeds, in aggregate, is more than #150 million, the chargeable gain exceeds #10 million in any 12 consecutive months and where the proceeds are not reinvested. [Section 34, NΤΑ]
Q23. Are cooperative societies or informal enterprises included in the new rules?
A: Registered cooperative societies remain tax-exempt as long as they do not engage in profit-making business.
Q24. I own a company engaged in agricultural business; will it be liable to tax in Nigeria?
A: Companies engaged in "agricultural businesses" e.g. crop production, livestock, aquaculture, forestry, dairy get a five-year tax holiday from Company Income Tax (CIT), starting from when the business commences. [Section 163, NTA]
Q25. How much must a company earn to become liable to pay taxes?
A: CIT rate remains 30% for other companies and 0% for small companies. "small company" means a company that earns gross turnover of N50M or less per annum with total fixed assets not exceeding N250 million. Any business providing professional services shall not be classified as a small company
Q26. As a small business, am I required to file VAT returns?
A: No, small businesses are exempted from filing VAT returns.
A "small business" means a company that earns gross turnover of N100 million or less per annum with total fixed assets not exceeding N250 million. Any business providing professional services shall not be classified as a small business. [Section 22, ΝΤΑΑ].
Note: Small business was only mentioned in the NTAA in the context of VAT returns, as such this threshold does not apply for income tax purposes
Q27. Is WHT still considered an advance payment of tax?
A: Yes, WHT is considered an advance payment of CIT. However, there are instances where it is considered a final tax
Q28. How can individuals and businesses claim WHT credits?
A: Individuals and businesses use Withholding Tax (WHT) credit certificates issued by payers to offset against income tax liability.
Q29. What tax reliefs or deductions are still allowable for Personal Income Tax
- Pension contributions (to approved schemes).
- National Housing Fund (NHF) contributions.
- Life insurance premiums (approved policies).
- Interest on mortgage for personal use.
Q30. Will I be issued a WHT receipt as evidence for the WHT deducted at source on my interest income?
A: Yes, you will be issued a WHT receipt as evidence of the WHT deducted at source on your interest income. [WHT regulation, 2024]
Steps to retrieve tax ID number
Earlier, Legit.ng reported that the Nigerian government has launched the Tax ID Portal to make it easier for taxpayers to obtain their Tax Identification Numbers (Tax IDs).
This unique 13-digit number is issued to all taxable individuals and entities for tax administration purposes.
For individuals, the Tax ID is linked to their National Identification Number (NIN), while businesses and organisations are connected through their Corporate Affairs Commission (CAC) registration numbers.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
