Federal Government says the implementation of the new tax reform laws will begin on January 1, 2026, providing 50 categories of reliefs and exemptions targeted at low-income earners, households, pensioners and small businesses.
The disclosure was made by the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, in a statement issued on his official X (formerly Twitter) account.
According to Mr Oyedele, individuals earning the national minimum wage or less will be exempt from Personal Income Tax, while workers with annual gross income up to N1.2 million will also pay no tax.
He said those earning up to N20 million annually will benefit from adjusted PAYE bands designed to reduce the overall tax burden.
The Committee Chair further explained that pension contributions, National Housing Fund payments, National Health Insurance Scheme contributions, life insurance premiums and interest on owner-occupied home loans will now qualify as allowable deductions.
Mr Oyedele pointed out that the new framework introduces a rent relief of 20 percent of annual rent, capped at N500,000.
He noted that pensions, gratuities and retirement benefits under the Pension Reform Act remain tax-exempt, while compensation for loss of employment up to N50 million will not attract tax.
Mr Oyedele also confirmed exemptions under Capital Gains Tax, including relief for the sale of owner-occupied homes, personal effects valued up to N5 million, and limited annual sale of private vehicles.
He stated that gains on shares up to N150 million annually or up to N10 million outright are also exempt, with additional relief granted where proceeds are reinvested.
On business taxation, Mr Oyedele said companies with turnover not exceeding N100 million and total fixed assets below N250 million will continue to enjoy 0 percent Companies Income Tax.
He explained that labelled startups will also be tax-exempt, while employers who increase salaries, provide transport or wage support, or hire and retain workers for at least three years will qualify for a 50 percent additional tax deduction.
The Committee Chairman announced that agricultural production companies will receive a five-year tax holiday.
Speaking on indirect taxes, Mr Taiwo Oyedele stated that basic food items, educational materials, medical and pharmaceutical products, baby products, sanitary pads, disability aids and non-charter passenger road transport will remain zero-rated or VAT-exempt.
He also confirmed that small businesses with a turnover below N100 million will not be required to charge VAT.
Mr Oyedele added that manufacturers, agricultural processors and small companies will be exempt from withholding tax deductions on their income and payments to suppliers.
He also noted that electronic transfers below N10,000, salary payments, intra-bank transfers and documentation relating to stock and share transfers remain exempt from stamp duties.
According to him, the reforms aim to reduce the cost of living, stimulate enterprise growth, encourage job creation and promote voluntary tax compliance nationwide.
Meanwhile, Mr Oyedele announced that the Committee has launched a public sensitisation initiative calling for the nomination of social media content creators who educate the public on tax reforms, stating that the top 20 nominees will be selected for further training, with nominations closing on November 9, 2025.
