New tax rules in Nigeria: What every business owner, freelancer, and creator must know before 2026
October 27, 2025
Let’s face it, the word tax makes many Nigerians sigh deeply. For years, it’s felt like one big mystery. You earn your money, government collects their share, and somehow you’re still not sure who’s in charge; FIRS, state IRS, or “one oga” asking for tax clearance.
But from January 1, 2026, that story is changing. Completely.
For the first time in decades, Nigeria’s entire tax system is being rewritten to make sense for individuals, businesses, and even creators. If you understand how this new system works, you’ll not only keep more money in your pocket, but also build wealth smarter and faster.
So, let’s break it down like a gist between friends hanging out.
One system. One ID. No more confusion
Before now, taxes in Nigeria were scattered. The federal government said one thing, the states said another. It was like watching two DJs play different songs on the same speaker.
Now, four new tax laws are coming together to form one unified system:
- Nigeria Tax Act (NTA)
- Tax Administration Act (NTAA)
- Nigeria Revenue Service Act (NRSEA)
- Joint Revenue Board Act (JRBEA)
All of these kick off from January 1, 2026.
The goal? Simplicity, fairness, and growth.
From now on, you’ll use one Tax ID, your NIN (for individuals) or CAC RC number (for businesses) for everything. Banking, business registration, investments, and even pension accounts. No more juggling multiple numbers or waiting endlessly for “TIN approval.”
Who is a taxable person now?
If you earn money, whether from a job, business, trade, or gig, you’re a taxable person.
This includes Nigerians abroad earning income from Nigeria. And yes, it includes creators, freelancers, MCs, influencers, comedians, and content producers.
For the first time, the system recognises the creative economy as a real business sector. That means your YouTube channel, TikTok gigs, or brand deals now count as legitimate income.
Sounds scary? It’s actually good news. Here’s why.
Small businesses and creators get real rewards
If your business makes ₦100 million or less yearly, and your fixed assets are below ₦250 million, your company income tax is 0%.
Zero.
That means instead of paying tax, you can use that money to expand, hire staff, or invest in better tools. The system is now designed to reward builders, not just collectors.
If your turnover falls between ₦100 million and ₦500 million, you’ll pay 20% tax on profit, not total income.
For example: if your business made ₦20 million profit, your tax is ₦4 million.
That’s a major relief from the previous 30%.
Only the very big players, those earning above ₦500 million, will pay 30%. And if your company is making billions (₦50 billion+ locally or €750 million+ globally), there’s an extra “top-up” tax to ensure fairness.
But for most Nigerian businesses and SMEs, the relief is huge.
The government wants you to build, not just pay
If you invest in priority sectors like agriculture, tech, manufacturing, or energy, you’ll get a 5% annual tax credit on the amount invested for up to 5 years.
That’s ₦5 million off your taxes yearly if you invest ₦100 million in those sectors.
In plain terms: Nigeria now wants its people to build, not just hustle.
What you’ll need from 2026
From 2026, your Tax ID (NIN or CAC RC number) will be your key to everything. You’ll need it to:
- Open or run a business account
- Register a company or NGO
- Operate investment or pension accounts
If you already have a TIN, no problem, it remains valid. It automatically doubles as your new Tax ID.
But if you’ve never registered? Don’t worry. You can get it free from firs.gov.ng or your State IRS / JTB office.
Students, homemakers, and those not earning any income don’t need to register. This is strictly for income earners.
What happens if you ignore it?
From 2026, without a valid Tax ID, you won’t be able to:
- Open or maintain a business account
- Receive dividends or make investments
- Buy insurance or pension plans
- Bid for contracts, grants, or government deals
So, if you’re a small business owner, freelancer, or side hustler, don’t wait till panic season. Fix it early.
How to prepare now
- Confirm your turnover and assets.
Know your numbers, what you earn, spend, and own. It helps you stay ready. - Get or verify your Tax ID.
Visit FIRS, JTB, or link your NIN. Simple and free. - Keep proper records.
Use tools like Zoho Books, QuickBooks, or Tally to track your income and expenses. Even an Excel sheet is better than nothing. - Apply for 0% or 5% credit if you qualify.
Don’t wait till someone else tells you how. - Start planning now.
2026 will favour those who prepared, not those who complained.
Final thoughts
Here’s the truth: tax isn’t your enemy. Confusion is.
For the first time, Nigeria’s tax system is giving small businesses and creators a fair chance to grow. It’s not about taking from you, it’s about helping you build better.
So don’t wait for deadlines or penalties. Learn the system, use it to your advantage, and position yourself early.
The future will belong to those who understand how money, and systems, really work.
And now that you know, go make it count.
