Lagos: As Nigeria started the implementation of the 2026 tax reforms, millions of low-income workers, small business owners, and everyday Nigerians are watching closely. The Nigerian Tax Act and the Nigerian Tax Administration Act, two of the four laws collectively known as the 2026 tax reforms, came into force on Jan. 1, reshaping personal and business taxation across the country.
According to News Agency of Nigeria, proponents of the reforms, including Dr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, stated that these changes were not just technical updates to Nigeria’s fiscal framework. They are intended as pro-poor and pro-growth measures designed to provide relief, promote fairness, and stimulate the economy.
One of the most-discussed aspects of the 2026 tax reform is its exemption provisions for low-income Nigerians. Under the new personal income tax system, individuals earning up to N800,000 annually, which is roughly N62,000 monthly, will not pay any personal income tax. Oyedele emphasized that the reforms are designed to shield the poor and protect livelihoods.
Beyond outright exemption, the reforms introduced additional deductions and reliefs that benefit everyday Nigerians. Pension contributions, health insurance premiums, and National Housing Fund contributions remain deductible, thereby reducing taxable income. Some capital transactions, such as the sale of an owner-occupied residence or the sale of personal vehicles, are exempted from capital gains tax up to specific limits.
The reform also offers a better environment for the nation’s informal sector, which is a key driver of employment and commerce. Small companies with turnovers below specific thresholds will enjoy zero corporate income tax, zero value-added tax (VAT), and significantly reduced withholding obligations. Simplified tax processes and unified administration will reduce compliance stress that has traditionally hurt micro-businesses and market traders.
Experts agree that these adjustments would strengthen the foundation of Nigeria’s small business economy. For small businesses and the informal sector, long considered the backbone of employment, the reforms promise reduced compliance stress. In Lagos, a small trader, Ms. Aisha Mustapha, noted that exempting low earners from personal income tax could make a real difference if faithfully applied.
According to the Association of Enterprise Risk Management Professionals (AERMP), its Director-General, Dr. Olayinka Odutola, highlighted the importance of embracing the tax laws for the benefit of everyone. He noted that only about 10 million Nigerians were paying taxes out of a population of about 200 million people. Odutola said stakeholders could address issues after implementation rather than trying to stop the law.
Prof. Chris Onalo, Registrar of the Nigerian Institute of Credit Administration (NICA), and Mr. Victor Alonge, President of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), also expressed optimism about the benefits of the reforms. Alonge assured that the new tax reforms would positively impact the real estate sector.
Meanwhile, the Chief Operating Officer of Qshelter Ltd., Mr. Adegbenga Alamu, described how debt servicing would become cheaper under the new law, boosting real estate investments. The Lagos State Government also supports the law, stating its intention to align state-level taxation with the new national structure to reduce multiple taxes and improve fairness.