Nigeria’s 2026 Fiscal Revolution: New Tax Laws to Exempt Low-Income Earners and Shield Small Businesses from Corporate Tax

Nigeria's 2026 tax reforms introduce a ₦800,000 tax-free threshold and CIT exemptions for small businesses. Learn about the new Nigeria Tax Act and NRS changes.

By: AXL Media

Published: Mar 18, 2026, 5:58 AM EDT

Source: The information in this article was sourced from THISDAY

A Structural Shift in Revenue Mobilization

Addressing the Policy Innovation Centre during the launch of the 2025 "Purple Book," Minister Taiwo Oyedele (represented by Albert Folorunsho) described the upcoming 2026 tax regime as a "structural shift" in Nigeria’s social contract. The reform is anchored by four primary pieces of legislation: the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Act, and the Joint Revenue Board Act. These laws collectively aim to modernize the fiscal landscape, emphasizing fairness for the informal sector, which currently constitutes over 92% of the nation's workforce.

Relief for Low-Income Earners and the Vulnerable

One of the most significant changes for the average worker is the new personal income tax threshold. Under the 2026 framework, individuals earning less than ₦800,000 annually are completely exempt from personal income tax. Furthermore, the reform introduces targeted reliefs such as a 20% rent relief (capped at ₦500,000) to ease the cost of living. For those facing job instability, the tax exemption threshold for redundancy compensation has been raised from ₦10 million to ₦50 million, providing a stronger safety net for displaced workers.

Incentivizing Small and Micro-Enterprises

The 2026 reforms are designed to act as a catalyst for the Small and Medium Scale Enterprise (SME) sector. Key business exemptions include: