With just over three months left in the year, some of us are already looking ahead to 2026. New year, new us—and thanks to Tinubu, new tax laws too.
There has been plenty of talk about the tax reforms Tinubu signed into law on June 26, 2025, which will come into effect from January 1, 2026. But what do they really mean? Will we pay less tax? More tax? How much exactly? And what about our crypto wallets?
Death and Tinubu’s Taxes
Back in 1789, Benjamin Franklin said, “In this world nothing can be said to be certain, except death and taxes.” Tinubu seems to agree. His famous “let’s widen the tax net” speech made clear from the start that taxation would be central to his presidency.
Barely two months after his swearing-in, Tinubu set up the Presidential Committee on Fiscal Policy and Tax Reforms in August 2023. The committee, led by Taiwo Oyedele (former Fiscal Policy Partner and Africa Tax Leader at PwC), was tasked with restructuring Nigeria’s tax system.
A year later, in October 2024, the committee presented four tax bills to the National Assembly. The National Economic Council (NEC), chaired by Vice President Shettima, advised that the bills be withdrawn for further consultation. But Tinubu said no.
By June 2025, the National Assembly had passed the bills, and Tinubu signed them into law on June 26.
But are the tax reforms actually a good thing?
We spoke to Financial Education Instructor, Kalu Aja, to hear what an expert thinks.
According to him, Nigeria’s tax laws have been overdue for an update. “The current tax laws are outdated,” he said.
He explained that the new laws encourage people to invest in health insurance and retirement savings, which is a positive step. They also widen the tax net and could help increase Nigeria’s tax-to-GDP ratio which is a sign of a healthier economy.
The Four Horsemen of the Taxpocalypse
So, what are these four tax reform bills?
The government is not just trying to raise or lower taxes. It wants to simplify the whole process, for itself and for us.
In 2023, Oyedele had recommended reducing the more than 200 overlapping taxes Nigerian businesses faced to just ten. The new laws are meant to make things easier to understand.
The four bills are:
- Nigeria Revenue Service Act
- Joint Revenue Board Act
- Nigeria Tax Act (NTA)
- Nigeria Tax Administration Act (NTAA)
The tax collector got a power boost
The Nigeria Revenue Service Act changes the name of the Federal Inland Revenue Service (FIRS) to Nigeria Revenue Service (NRS). The idea is to show that the service collects money for the whole Federation, not just the Federal Government.
The act also gives the service more powers. For example, it no longer needs to rely on law enforcement to carry out investigations. So yes, the FIRS got a new name and a bit more muscle.
What if I fight with my tax collector?
The Joint Revenue Board Act is meant to improve coordination between federal, state, and local governments. It sets up:
- The Joint Revenue Board
- The Tax Appeal Tribunal (TAT) – to handle disputes.
- The Office of the Tax Ombud – to investigate taxpayer complaints.
So if you have a tax problem, this law tells you where to go.
One Tax Law to Rule Them All
The Nigeria Tax Act (NTA) creates a single legal framework for taxation. It replaces many older laws and puts everything in one document.
It also sets tax rates for individuals based on income, ranging from 0% to 25% depending on income.
Pay your tax or else…
The Nigeria Tax Administration Act (NTAA) sets common rules for how taxes are collected. It makes tax registration mandatory for anyone earning income, introduces universal Tax Identification Number (TIN), and grants authorities more power, including the ability to seize assets from defaulters.
Taxes kwa? How much am I making?
The new laws apply to both individuals and businesses. Micro, small, and medium-sized enterprises (annual turnovers below ₦50 million and assets under ₦250 million) are exempt. So if you are a big-time CEO, maybe stop reading Zikoko and call your tax lawyer.
For individuals, the tax rates are as follows:
- 0% for the first ₦800,000
- 15% for the next ₦2,200,000
- 18% for the next ₦9,000,000
- 21% for the next ₦13,000,000
- 23% for the next ₦25,000,000
- 25% for everything above ₦50,000,000
But will we be paying more tax?
According to Financial Education Instructor, Kalu Aja, the answer is, “It depends.”
Under the new tax laws, the more you spend on things like insurance and pension contributions, the less tax you pay.
“From my calculations, if you choose not to buy any insurance or pension plan, you will pay more under the new law if you earn ₦19 million or more a year,” he said.
So, for higher earners, skipping those deductions could mean handing more money over to the tax man.
Old versus New
The government has been advertising the new tax laws as being favourable to lower income earners. The 20 per cent rent relief and people earning less than ₦800,000 will pay no tax strengthen their case.
The government even has a calculator you can use to compare your tax under the old and new laws.
Here is an example we have created:
John earns ₦100,000 per month, which is ₦1,200,000 per year. He spends a third of his income on rent, which is ₦400,000. His 20 per cent rent relief is ₦80,000.
Apart from the rent relief, the new law allows for the following deductions:
- Contributions under the National Housing Fund (NHF)
- Contributions under the National Health Insurance Scheme (NHIS)
- Contributions under the Pension Reform Act
- Interest on loans for developing an owner-occupied residential house
- Premium of life insurance for the person or their spouse
The NHF contribution is 2.5 per cent of annual income. For John, that is ₦30,000 per month. The NHIS contribution is 10 per cent of income, which is ₦120,000 for John. The Pension Reform Act of 2014 mandates an 8 per cent contribution, which is ₦96,000 for John. If John is not developing a house, he has a life insurance premium of ₦100,000 per year.
That brings his total deductions to ₦426,000. So his taxable income remains ₦774,000. This is under ₦800,000, so John pays no tax.
According to the calculator, he would have paid ₦41,152 annual tax under the old law.
It is easy to see these deductions driving growth in the insurance and pensions industries.
What is the catch?
But widening the tax net means more people must now comply. Informal businesses, traders, and freelancers will need the TINs.
Every bank credit alert could be scrutinised. If your uncle sends you money, you will need proof that it is a gift, not a business income.
Digital assets such as crypto and NFTs are also now taxable. If you make money from selling them, you owe tax.
Should I be worried?
So earlier, we said the reforms are meant to make things easier for everyone to understand. While that is mostly true, there are still a lot of moving parts.
For instance, the impact of the new taxes on businesses may not be felt until the laws come into effect next year. When they do, they might pass the cost on to customers. If you do not pay tax directly, you might pay more at the counter.
Also, the law revives a very controversial five per cent surcharge on fossil fuels, which analysts fear could further worsen inflation.
Kalu Aja told us, “Taxes do not make goods cheaper or more expensive.”
According to him, when the government collects taxes from businesses, it is expected to reinvest that money into improving the ease of doing business—things like energy, security, and transport infrastructure.
But when the government takes those taxes and fails to invest, it ends up hurting the businesses. “They pay a double tax,” he said, “the formal tax to the government, then an informal tax in the form of losses caused by bad roads and insecurity.”
So, whether the new tax laws lead to higher prices depends on one key thing: “how well the government spends the money to boost productivity across Nigeria.”
What I ordered versus what I got
Nigeria’s challenge has never been collecting taxes; it is how the taxes are used.
Countries like South Korea (tax rates 6–45%) and Canada (14.5–33%) use similar progressive systems, but they deliver reliable healthcare, safer transport, and better infrastructure. But here is the difference—South Korea and Canada rank second and fourth globally for the quality of their healthcare systems. Nigeria sits at 84th out of 110 countries.
Our healthcare system is underfunded. Doctors and nurses are leaving in record numbers, and those who stay are overworked, underpaid, and prone to strikes.
Transport is not much better. Nigeria’s system is not only inefficient but unsafe. We have reported that both rail and boat travel are prone to accidents. Our roads are just as dangerous. Nigeria records around 21.1 road accident deaths per 100,000 people each year. Compare that to Canada’s 5.6 and South Korea’s 9.4. The global average is 16.8.
We also have fewer roadways and railways per person than both countries, which shows how weak our transport infrastructure really is.
And then there is security. Nigeria faces ongoing threats from terrorist groups, kidnappers, and bandits. We rank 148 out of 163 countries on the World Peace Index. Meanwhile, the Chief of Defence Staff has advised citizens to learn karate for self-defence.
So let us recap: poor healthcare, unsafe and unreliable transport, and we are one of the most dangerous places to live in the world.
What exactly has the government been doing with the taxes it has collected all this time? And more importantly, what will change with the new ones?
This new tax will favour me and my family
Ultimately, the goal of taxation is to raise revenue that the government can use to improve everyone’s living standards. Unfortunately, the Nigerian government does not inspire confidence in that regard.
The Tinubu administration scrapped fuel subsidies but has yet to show where the savings went. The World Bank reported that the Nigerian National Petroleum Company Limited (NNPCL) remits only half of the subsidy savings.
Worse, the government has stopped publishing quarterly budget reports, despite being legally required. A government that has not earned public trust is now demanding more from taxpayers.
Franklin was right: taxes are inevitable. But so is the demand for accountability.
What we can do is choose better leaders and be more active in holding them accountable.
Further Reading
I hate to give homework, but this time it might be worth it. The new laws expect more effort from taxpayers.
Make sure you have your TIN if you are a “taxable person.” Keep records of all money you receive. Know what deductions you can claim. And keep proof of any money that should not count as income. Yes, I mean those shameless begging screenshots.
Taiwo Oyedele, chair of the Tax Reforms Committee, has shared FAQs on X. Kalu Aja’s explanation includes useful scenarios to clarify how the taxes will work for individuals, businesses and digital assets. You can also access the Nigeria Tax Act and the Tax Administration Act online here and here, respectively.
Talk to us here. If you have had any experience when Nigeria’s systems made life harder or unexpectedly easier, we want to hear about it.
