Guides · Compliance
Nigeria tax laws & recent updates
A readable summary for individuals navigating PIT, reliefs, and digital-asset rules — with a path to our Nigeria tax calculator.
Key takeaways
- The Nigeria Tax Act 2025 takes effect 1 January 2026, with progressive personal income tax bands from 0% up to 25%.
- A larger tax-free threshold means lower earners pay no personal income tax, while reliefs reduce what higher earners owe.
- Rent relief, pension, NHF and similar deductions lower your taxable income — many are detectable straight from your bank feed.
- Tax years 2025 and earlier still follow the legacy PITA Sixth Schedule with the Consolidated Relief Allowance (CRA).
- Filing is administered by the Nigeria Revenue Service (NRS) and state SIRS, with returns exportable to TaxPro-Max.
Want your own numbers? Try the Nigeria tax calculator or see plans.
What shapes Nigerian personal tax today
This page is a high-level overview for founders, freelancers, and crypto earners — not legal advice. Laws change; verify with official gazettes, NRS notices, and a qualified adviser.
Signed into law on 26 June 2025, the NTA 2025 is the most significant Nigerian tax reform in over a decade. It replaces the Personal Income Tax Act (PITA) and consolidates multiple tax laws into a single, unified legislation. Effective from 1 January 2026, it introduces new progressive income bands, removes the Consolidated Relief Allowance (CRA), and merges capital gains tax into the personal income tax framework.
All Nigerians earning up to ₦800,000 annually are now fully exempt from personal income tax under the NTA 2025. This zero-rate band was introduced to protect low-income and minimum-wage earners, replacing the old 7% first-band rate that applied from the first naira.
The Consolidated Relief Allowance (CRA) — previously calculated as max(₦200,000, 1% of gross) + 20% of gross — has been abolished. In its place, resident individuals who pay rent may deduct 20% of their annual rent, capped at ₦500,000. Homeowners and non-renters receive no equivalent personal relief beyond the ₦800,000 tax-free band.
From 2026, the separate 10% Capital Gains Tax (CGT) rate has been abolished. Capital gains — including gains from digital assets and crypto — are now added to taxable income and taxed at the same progressive NTA 2025 rates. This change significantly increases the effective tax rate on high-value gains.
The NTA 2025 explicitly confirms that Nigerian tax residents are liable on their worldwide income regardless of where it arises or whether it is remitted to Nigeria. A resident is defined as someone domiciled in Nigeria, having a permanent home here, maintaining family/economic ties, or spending 183+ days in Nigeria in a 12-month period.
Federal taxes are administered by the Nigeria Revenue Service (NRS); states operate State Internal Revenue Services (SIRS) for state-level PAYE collections. Many filings and receipts flow through TaxPro-Max — PayPit is built to align with these workflows and NRS compliance expectations.
NTA 2025 progressive bands
2026 and beyondTax is applied slice-by-slice across each band. The ₦800,000 tax-free threshold means low-income earners pay zero PIT. Capital gains are now included in taxable income.
| Band | Marginal rate | Note |
|---|---|---|
| First ₦800,000 | 0% (exempt) | Tax-free threshold |
| Next ₦2,200,000 (up to ₦3m) | 15% | |
| Next ₦9,000,000 (up to ₦12m) | 18% | |
| Next ₦13,000,000 (up to ₦25m) | 21% | |
| Next ₦25,000,000 (up to ₦50m) | 23% | |
| Above ₦50,000,000 | 25% | Top rate |
PITA Sixth Schedule (reference)
Tax years 2025 and earlierUsed for historical assessment and any outstanding 2025 liabilities. CRA was applied before these bands. Rates started at 7% from the first naira of taxable income.
| Band | Marginal rate |
|---|---|
| First ₦300,000 | 7% |
| Next ₦300,000 | 11% |
| Next ₦500,000 | 15% |
| Next ₦500,000 | 19% |
| Next ₦1,600,000 | 21% |
| Above ₦3,200,000 (remainder) | 24% |
Legacy CRA formula: max(₦200,000, 1% of gross) + 20% of gross annual income.
Try the numbers
Our free calculator supports both the NTA 2025 (2026+) and the legacy PITA regime. Select your tax year to see the right bands and reliefs.
Stop guessing. Know exactly where you stand.
Join thousands of Nigerian freelancers and platform earners using PayPit to organize income, spending, and tax estimates in one place.