CITN Lists Who Is Exempt From Nigeria's Presumptive Tax Regime in 2026
- The Chartered Institute of Taxation of Nigeria clarified which persons and businesses fall outside the presumptive tax regime
- Nano businesses with annual turnover not exceeding N12 million attract a zero per cent tax rate and can obtain a free Tax Exemption Certificate
- CITN identified several categories covered by the exemption, including registered co-operatives, trade unions, and government bodies
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The Chartered Institute of Taxation of Nigeria (CITN) has outlined the categories of individuals and businesses that do not fall under the country's presumptive tax regime, offering clarity to taxpayers as Nigeria presses ahead with its 2025 tax reforms.
The guidance was shared through tax education materials published on X, where the institute drew attention to provisions under the Nigeria Presumptive Tax Regulations, 2026.
Source: Getty Images
The regime, which came into force on January 1, 2026, derives its authority from Section 29 of the Nigeria Tax Act, 2025, and targets informal operators whose incomes are difficult to determine because of poor record-keeping.
Who Qualifies for an Exemption
CITN pointed to Section 162 of the Nigeria Tax Act, 2025, which already excludes certain groups from income tax entirely. Those same groups are also excluded from the presumptive tax regime.
They include registered co-operative societies where profits do not come from trade or business, persons running educational, religious, or charitable activities of a public character on the same condition, registered trade unions, and federal, state, and local governments along with their ministries, departments, and agencies, except where profits arise from trading activities, Nigerian Tribune reports.
Nano businesses form a separate exempt category.
Under the regulations, a nano business is a sole proprietorship or household-run enterprise that has no fixed premises, no formal employees, and an annual turnover of no more than N12 million, which works out to roughly N40,000 per day over 300 working days.
Their estimated net income is subject to a zero per cent tax rate under the Nigeria Tax Act, 2025.
The First Schedule to the regulations gives concrete examples of nano businesses: roadside food vendors, mobile barbers, tailors using manual sewing machines, local cobblers, newspaper vendors, sachet water hawkers, and wheelbarrow pushers, among other petty traders.
How to Access the Exemption
Those who qualify can request a Tax Exemption Sticker or Certificate from the relevant tax authority at no cost.
The document lasts one year and must be renewed after the authority confirms the holder still meets the eligibility criteria.
CITN advised affected persons and businesses to confirm their eligibility, apply for the sticker or certificate where applicable, and keep the documentation as proof of their exempt status.
Source: Getty Images
The institute noted that the zero-rate treatment for nano businesses is already built into the Nigeria Tax Act, 2025, and the exemption formalises what the law already provides for at that scale of operations.
For informal operators above the nano threshold who do fall within the presumptive regime, a one per cent tax applies to actual or estimated turnover, with separate rules covering chargeable gains.
By spelling out who is excluded, CITN aims to cut down on confusion and encourage voluntary compliance as the broader tax reform continues to roll out across Nigeria.
Company income tax in Nigeria drops by 8%
Earlier, Legit.ng reported that the National Bureau of Statistics (NBS) revealed that Nigeria’s Company Income Tax (CIT) collections stood at N1.37 trillion in Q1 2026, representing an 8.08% decline from the N1.49 trillion recorded in Q4 2025.
This was disclosed in the bureau’s latest Company Income Tax report covering Q1 2026.
The data shows that total CIT collections were driven by both domestic and foreign payments across key sectors of the economy.
Source: Legit.ng
