3 minutes read

I’ve been tasked with ensuring that this dispatch is not boring. The subject is taxes. I’m sorry.
Sleep-inducing as taxes can be, they’re quietly one of the most powerful forces shaping how we live, build, and survive in Nigeria. Nobody really wants to talk about them until the Federal Government decides to overhaul the entire system, and suddenly, everyone’s ears perk up.
Well, brace yourself. Nigeria just did exactly that.
A New Tax Era (And Maybe a Headache or Two)
Starting January 1, 2026, Nigeria’s new tax laws will officially kick in. Think of them as a full system reboot; the FIRS (Federal Inland Revenue Service) is being replaced by the shinier, supposedly smarter Nigeria Revenue Service (NRS). The goal? To make tax collection fairer, simpler, and a little less… well, 1998.
In theory, that means digital filing, better transparency, and fewer agencies breathing down your neck about the same ₦50,000. In reality, it might mean you’ll need a strong Wi-Fi signal, a tax ID number, and a bit of patience. Or prayer. Maybe both.
The Big Shift: Fairness (Sort Of)
The new regime says it’s here for fairness.
If you earn ₦800,000 or less a year, you’re officially exempt from personal income tax. That’s roughly ₦66,000 a month — not enough to cover rent for a small self-con in Lagos or one square meal in a boujee restaurant, depending on your lifestyle choices.
Small businesses also get some love. Companies with turnover below ₦100 million and fixed assets under ₦250 million will enjoy tax exemptions — no corporate income tax, no capital gains tax, no development levy. A rare government W.
But for the big boys? The party’s over. The Capital Gains Tax is shooting up from 10% to 30%, aligning with corporate income tax. Translation: if you sell land or shares and make a profit, the government wants a bigger slice of that cake.
The Development Levy (4%… and Counting)
You’ll also meet something called the Development Levy, a new 4% charge on company profits. It’s meant to replace smaller, scattered levies (IT levy, TETFund, etc.) and simplify the mess.
It’s one of those reforms that sounds great in a PowerPoint presentation. We’ll see what it feels like in real life eventually.
VAT, Digitalisation, and the New Watchdogs
VAT stays at 7.5%, which is the government’s way of saying, “We’re not raising taxes… yet.” But they’ve expanded zero-rated goods; food, health, and education remain safe zones.
Behind the scenes, though, things are getting digital. E-invoicing, online reporting, and AI-assisted audits are coming. The taxman might not knock on your door, but he’ll know when you’ve been paid.
Winners and Worriers
The winners?
1. Low-income earners — more exemptions.
2. Small businesses — fewer levies.
3. The government — better revenue tracking.
The worriers?
1. Large corporations — higher taxes.
2. Property investors — fewer loopholes.
3. Anyone allergic to paperwork.
There’s also a new emphasis on tax residency. If you live and earn in Nigeria for more than 183 days a year, congratulations, you’re officially part of the system. Your global income might be fair game.
The Bigger Picture
Nigeria isn’t raising taxes just for fun. The government’s goal is to widen the base — to make more people pay something, instead of a few paying everything. It’s a big gamble. If it works, we get better infrastructure and services. If it doesn’t, we get better memes.
But here’s the thing: taxes are a mirror. They reflect how a country wants to grow, who it wants to protect, who it expects to contribute, and how serious it is about its own economy.
The Takeaway
So yes, taxes are boring. But they’re also how nations mature. Nigeria is finally updating its tax DNA for the digital era, one spreadsheet at a time.
You don’t have to love it. You just have to understand it. Because in 2026, ignorance will be very expensive.
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I always look forward to every post. The tone? PERFECTION
Awesome piece 👏