Earn ₦1.2m a year or less? The new tax laws were written with you in mind

Tax reform does not usually make young people excited. This one is worth a closer look, because it changes the rules for millions of low earners and small-business owners.

Since 1 January 2026, four new laws have been in force: the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act and the Joint Revenue Board (Establishment) Act.

If you earn the minimum wage

Minimum-wage earners, and people with an annual gross income of up to ₦1.2 million, are exempt from personal income tax. For many young workers early in their careers, that means more of their pay stays with them.

If you run a small business

Small companies with turnover under ₦100 million and fixed assets under ₦250 million are exempt from Company Income Tax, Capital Gains Tax and the 4 per cent Development Levy. That covers many start-ups, salons, studios and trading businesses.

There is a catch to remember. Exempt businesses must still register for a Tax Identification Number (TIN) and file returns. Being exempt does not mean you can stay off the system.

Fifty reliefs and exemptions

The government has also announced 50 reliefs and exemptions aimed at low-income earners and small and medium-sized enterprises.

A bigger base, a lighter touch

The aim is to collect more overall while asking less of those who earn least. According to a government-linked report, tax collections rose from ₦12.3 trillion in 2023 to ₦28.3 trillion in 2025.

President Bola Ahmed Tinubu has listed tax restructuring alongside subsidy removal and currency reform as the core of his reform agenda. He thanked young supporters at the State House this week for standing by it.

The practical advice: if you are self-employed or run a small business, get your TIN and file your returns. If you qualify as a small company, you may owe little or no tax, but you still need to be registered.