As Nigeria’s Tax Reforms Expand the Revenue Dragnet in 2026, Who Bears the True Cost?
Story: written by Joseph December 19,2025
Starting January 1, 2026, Nigeria’s sweeping tax overhaul—signed into law by President Bola Tinubu in mid-2025—aims to broaden the country’s revenue collection through stricter enforcement, digital tools, and a more progressive structure. The reforms consolidate outdated laws, eliminate multiple levies, and introduce exemptions to ease the load on low earners and small businesses.
Low-income individuals earning up to roughly ₦100,000 monthly (or ₦800,000–₦1.2 million annually after deductions) will pay zero personal income tax, while higher earners face rates up to 25%. Small businesses with turnover below ₦100 million benefit from exemptions on corporate income tax and development levies. However, the system widens the net for previously untaxed groups like remote workers, freelancers, and large corporations, with AI-powered audits and penalties for non-compliance.
While the government promotes this as fairer and growth-oriented—targeting reduced evasion and higher revenue to fund development—critics worry about potential burdens on middle-class professionals and informal sector players through indirect costs like VAT or compliance hassles. Supporters argue it shifts the weight toward wealthier contributors and multinationals.
Ultimately, the reforms promise relief for the vulnerable but raise questions about who truly feels the pinch as enforcement tightens.
