Fifty (50) Tax Exemptions and Reliefs to Benefit Nigerians Under the New Tax Reform Laws
Newsmediang
The Presidential Fiscal Policy and Tax Reforms Committee has unveiled a comprehensive list of 50 tax exemptions and reliefs that will take effect from 1 January 2026, aimed at easing the tax burden on low-income earners, average taxpayers, and small businesses across Nigeria.
According to the Committee, the new provisions under the reformed tax laws represent a major stride toward building a fairer and more inclusive tax system that rewards productivity, encourages compliance, and supports sustainable economic growth.
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Key Highlights of the Tax Reliefs and Exemptions
Personal Income Tax (PAYE)
1. Individuals earning the national minimum wage or less are exempt from tax.
2. Annual gross income up to ₦1.2 million (equivalent to about ₦800,000 taxable income) is exempt.
3. Reduced PAYE rates for those earning up to ₦20 million annually.
4. Gifts received by individuals are exempt.
Allowable Deductions and Reliefs
5. Pension contributions to Pension Fund Administrators (PFAs).
6. Contributions to the National Health Insurance Scheme (NHIS).
7. Contributions to the National Housing Fund (NHF).
8. Interest on loans for owner-occupied residential properties.
9. Life insurance and annuity premiums.
10. Rent relief — 20% of annual rent, up to ₦500,000.
Pensions and Gratuities (Exempt)
11. Pension funds and assets regulated under the Pension Reform Act (PRA).
12. Pensions, gratuities, and retirement benefits compliant with the PRA.
13. Compensation for loss of employment up to ₦50 million.
Capital Gains Tax (CGT) Exemptions
14. Sale of an owner-occupied house.
15. Personal effects or chattels up to ₦5 million.
16. Sale of up to two private vehicles per year.
17. Gains on shares below ₦150 million per year or gains up to ₦10 million.
18. Reinvested gains on shares above the exemption thresholds
19. Pension funds, charities, and non-commercial religious institutions.
Companies Income Tax (CIT)
20. Small companies (turnover ≤ ₦100 million; total fixed assets ≤ ₦250 million) — 0% tax rate.
21. Eligible and certified startups — Exempt.
22. Compensation relief — 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income employees.
23. Employment relief — 50% deduction for salaries of new employees retained for at least three years.
24. Five-year tax holiday for agricultural businesses.
25. Gains from investment in labeled startups by venture capital firms, private equity funds, accelerators, or incubators — Exempt.
Development Levy
26. Small companies are exempt from the 4% development levy.
Withholding Tax (WHT)
27. Small companies, manufacturers, and agricultural businesses are exempt from WHT on their income.
28. Small companies are also exempt from WHT deductions on payments to suppliers.
Value Added Tax (VAT) — 0% or Exempt
29. Basic food items.
30. Rent.
31. Education services and materials.
32. Health and medical services.
33. Pharmaceutical products.
34. Small companies (turnover ≤ ₦100 million) are exempt from charging VAT.
35. Diesel, petrol, and solar power equipment — VAT suspended or exempt.
36. Refund of VAT on assets and overheads used to produce VATable or 0%-rated goods and services.
37. Agricultural inputs — fertilizers, seeds, seedlings, feeds, and live animals.
38. Purchase, lease, or hire of agricultural equipment.
39. Disability aids — hearing aids, wheelchairs, braille materials.
40. Shared passenger road transport (non-chartered).
41. Electric vehicles and parts.
42. Humanitarian supplies.
43. Baby products.
44. Sanitary towels, pads, and tampons.
45. Land and buildings.
Stamp Duties
46. Electronic money transfers below ₦10,000.
47. Salary payments.
48. Intra-bank transfers.
49. Transfers of government securities or shares.
50. Documents relating to the transfer of stocks and shares.
Influencing for Good: Promoting Accurate Tax Education
To support public understanding and responsible dissemination of tax information, the Committee is launching an “Influencing for Good” campaign to identify and train 20 content creators who have been educating — or are willing to educate — their audiences on the new tax reform laws.
Members of the public are encouraged to nominate deserving content creators or influencers via the nomination link below:
👉 https://forms.gle/15kyv1ffx7tzTLhi8
Nominations close on November 9, 2025.
The Committee emphasizes that accurate information empowers citizens, strengthens trust, and helps ensure that the benefits of tax reform reach every Nigerian.
