06/10/2025
Q&A on the new Nigeria Tax Law (Specific focus on Individuals and Small businesses)
Q1: When does the new Nigeria Tax Act take effect?
A1: The new Nigeria Tax Act takes effect from 1 January 2026.
Q2: Which specific individuals does the Nigeria Tax Law apply to?
A2: It applies to all individuals that earn income in Nigeria (workers, content creators, remote workers, influencers, traders, etc.) and to Nigerians earning income abroad if they are tax residents in Nigeria
Q3: Will transfers and deposits into my bank account be taxed?
A3: No. Moving money around (via POS, transfers, deposits, or withdrawals) is not a taxable event. What is taxed is income earned.
Q4: Will the money I keep in my bank account be taxed from 2026?
A4: No. Just having money in your account is not taxable. Only the income you earn (like salary, business profits, or interest) is what can be taxed.
Q5: I’m a student with no job. Will I pay tax in 2026?
A5: No. If you have no taxable income, you won't pay tax.
Q6: Will tax authorities now monitor bank accounts of businesses more closely?
A6: Yes, it will be easier for authorities to track compliance. But again, your bank balances will not be taxed, profits and income are.
Q7: Will I pay tax on the loan I borrow from Fairmoney or any lender?
A7: No. Loans are not taxable given that they are not income. However, the interest income earned by Fairmoney will be taxed at their own hands.
Q8: I run a one man business. Do I pay personal income tax or company income tax?
A8: If registered as an enterprise (business name), you pay Personal Income Tax. If registered as a limited liability company then you pay Company Income Tax.
Q9: If I sell shares and make profit, will I pay tax in 2026?
A9: No, as long as the shares you sold are not more than ₦150 million in value, and the gain is not above ₦10 million. However, if it is higher than this threshold, the gain becomes taxable.
Q10: I am a pensioner. Will my pension income be taxed in 2026?
A: