In less than 24 hours, Nigeria’s 2026 tax reforms are set to move from policy debate to implementation, but not without controversy. While the federal government maintains that the reforms will broaden the tax base and strengthen revenue collection, resistance has grown across several influential groups.
Organizations including as the Nigerian Bar Association (NBA), the Nigeria Labour Congress (NLC), and the National Association of Nigerian Students (NANS) have openly rejected the reforms, raising concerns over their timing, legality, and potential impact on citizens. Tensions intensified after members of the House of Representatives raised an alarm that the reforms had already been gazetted, a move critics argue undermines legislative scrutiny.
As the countdown begins and with les than 24 hours to full implementation, key questions come to play; what should you expect, who will be most affected, and what are the key issues to watch as the reforms take full effect.
What you should know;
A revised, more progressive rate structure and a bigger basic exemption for low-income earners are two of the most notable improvements; in order to safeguard subsistence-level workers, the government specifically exempted very low incomes from personal income tax.
This is the new progressive tax system.
0% tax will be applied on amounts between 0 and 800,000 per year.
15% tax will be applied to amounts between 800,001 and 3,000,000 per year.
18% tax will be applied to amounts between $3,000,001 and $12,000,000 per year.
21% tax will be applied to amounts between $12,000,001 and $25,000,000 per year.
23% tax will be applied to amounts between $25,000,001 and $50,000,000 per year.
Over $50,000,000 a year will be subject to a 25% tax.
Under the previous tax system, people could avoid tax by claiming their income came from side hustles, or informal trade or daily work. However, under the new tax reforms, every income that is above the designated threshold is taxable except those that are specifically exempted by law( like gifts, upkeep to students, among several others).
Corporate Income Tax (CIT): businesses with turnover below ₦50 million annually will now pay zero corporate tax. That’s a big win for SMEs. You are taxed on the income you earn, not on the assets you own.
What to Expect
People should anticipate more requirements for documentation and transparency. Bank receipts, descriptions, invoices, platform statements, and digital payment records will become the main proof of income since the authorities will rely on electronic records and information exchange.
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Additionally, because the new revenue service has statutory authority to collect data from financial institutions and platform operators, there will be a clearer enforcement approach for determining unreported income.
As part of what should be expected, compliance with Loans and Opportunities, Government grants, contract bids, school scholarships, loan approval, and visa processing will all now require tax clearance.
What You Should do
Required Tax Registration: All Nigerians, regardless of income level, are required to register for a TIN or NIN as FIRS recently announced that NIN now serves the same purpose as TIN.
Annual Tax Filing: You have to file an annual tax return even if you are exempt.
Record-keeping: People are required to keep documentation of their earnings and outlays.
Keep Personal and Business Income Separate: You need to quit combining bank accounts.
Tax on Multiple Streams: You are required to disclose all sources of income, not just your pay.
Popular Myths About Tax Reforms
A popular myth about the recent tax reforms is that any money that enters an account will be taxed. This however is not wholesomely correct as only income will be taxable
It is also widely believed that bank accounts will be debited automatically under the new tax reforms however, these taxes will be paid yearly by self assessment and not automatic debits.
Additionally, many believe that under the new tax reforms, small earners are the target. In the real sense, small earners whose annual income is lower that the threshold will have to pay nothing.
The Reality no one talks about
While much has been said to sensitize Nigerians about he new tax reforms, what is expected and what should be expected, one area that is less talked about is the reality.
Research carried out reveals that only about 19% of Nigerians are active tax payers which means that the greater percentage of the population do not pay their taxes.
The reality however remains that while the tax reforms may take full effect in less than 24 hours, many Nigerians will still not pay their taxes. This is because as earlier stated, these taxes are not to be made over automatic debits but still require self assessment, something that an average Nigerian is not familiar with where tax payment is concerned.
As the countdown to the implementation of these tax reforms are wounding up, Nigerians are left weighing promises of improved revenue and fairness against concerns over legality, timing, and economic impact. Concerns that the coming days will test.
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