A Practical, No-Nonsense Explanation for Individuals, Workers, Creators, Investors & Small Businesses in Nigeria
A major shift is coming to Nigeria’s financial landscape. On January 1, 2026, a new tax law will officially take effect, one that affects every individual who earns money in Nigeria, whether online or offline, and whether local or abroad.
As a community positioning ourselves to raise responsible, empowered, and financially disciplined kingdom citizens—people who will earn, manage, and pay tithes in millions, we must also prepare to give Caesar what belongs to Caesar.
Taxes are now a fixed part of the Nigerian financial journey. And ignorance is no longer an excuse.
To help Nigerians understand what is coming, I created a comprehensive “Questions & Answers on the New Nigerian Tax Law.”
A panel of professionals in finance, taxation, and compliance contributed to this work. This guide focuses specifically on individuals and small businesses, the people most affected by the change.
Below is everything you need to know, explained clearly and practically.
With NIN + BVN + TIN + global data systems, evasion will be extremely difficult.
When Will the New Nigerian Tax Act Take Effect?
January 1st, 2026.
No extensions. No delays.
Whether you are ready or not, the implementation begins.
Who Does This Tax Law Apply To?
In simple terms: Everyone who earns income in Nigeria.
This includes:
Salaried workers
Traders
Freelancers
Content creators
Influencers
Remote workers
Commission earners
Side hustlers
Property agents
Even the controversial category the government mentioned publicly, “runs girls”
(They claimed Lagos generated a shocking ₦60–₦600 billion from this category.)
If you earn in Nigeria, you will be taxed.
It also applies to Nigerians who:
live in Nigeria
but earn from abroad
and do not pay tax in that foreign country
Meaning:
If you are a Nigerian resident and you have properties, contracts, or investments in London, Dubai, Ghana, Kenya, or anywhere else, the income must be taxed in Nigeria.
And secrecy can no longer protect you.
NIN, BVN, bank systems, and global information-sharing platforms have been connected.
This is the time to:
declare all foreign investments
get a tax consultant
stop being stingy with professional advice
prepare before enforcement begins
3. Will Transfers and Deposits Into My Bank Account Be Taxed?
No.
Money movement, POS, banking app transfers, ATM withdrawals, and deposits are not taxable events.
But there is a warning.
If people keep using your account “to help them move money,” you may be flagged for:
money laundering
unexplained turnover
suspicious activity
If you boost your account for visa purposes with unexplained deposits, expect scrutiny.
Record keeping will save you.
For events, weddings, burials, and birthdays, label all transactions clearly:
“Contribution”
“Refund”
“Loan repayment”
“Gift”
Descriptions matter more than ever.
4. Will the Money Sitting in My Account Be Taxed?
No.
Money in your account is not taxable.
Only income is taxable, not:
savings
previous earnings
stored cash
But you need evidence to show that the money came from non-taxable sources.
Otherwise, government officials can misinterpret your transactions and attempt extortion.
Documentation = Protection.
5. I’m a Student With No Job. Will I Pay Tax?
No.
If you are not earning taxable income, you do not owe tax.
Taxable income includes:
salary
commission
business profit
investment returns
Pocket money from parents is not taxable.
Upkeep from siblings is not taxable.
6. Will Tax Authorities Monitor Business Accounts More Closely Now?
Yes, with frightening accuracy.
There is something called SCUML, pronounced like a tongue-twister: “scumul.”
If your business receives:
₦5 million or above weekly (for personal/small categories)
₦10 million or above weekly (for corporate categories)
You must file weekly reports with EFCC.
Every company must also:
employ a Compliance Officer
send that officer for EFCC training
send directors for compliance training
Your bank statement is not taxed.
Your profit is.
This is why we are teaching this now—before you start praying unnecessary warfare prayers because of avoidable audits.
7. Will I Pay Tax On Loans Borrowed From Banks, Apps, or Individuals?
No.
A loan is not income.
But the lender’s interest is taxed to them, not you.
However, you must prove the money was truly a loan.
Documents like:
loan agreements
clear WhatsApp chat records
transfer descriptions
Example of invalid evidence:
“₦2m as discussed.”
As discussed for what? Birthday? Business? Loan? Rent?
Be clear.
8. I Run a One-Man Business. Do I Pay Personal Income Tax or Company Income Tax?
It depends on your registration:
A. If you run a Business Name (Enterprise)
You pay Personal Income Tax.
You and the business are the same legal entity.
B. If you run a Limited Liability Company
You pay Company Income Tax.
The company is separate from you.
If the business owes money, you personally do not owe.
If the company makes no profit, it pays no tax.
This is why understanding:
gross profit
net profit
profit-before-tax
allowable deductions
…is important for business owners.
9. If I Sell Shares and Make a Profit, Will I Pay Tax?
Mostly no.
You are exempt as long as:
the value of shares sold ≤ ₦150 million
the gain ≤ ₦10 million
If your gain exceeds ₦10 million, the excess is taxable.
This makes the stock market extremely attractive now.
It also opens new opportunities for:
investment advisors
brokers
tax consultants
portfolio managers
10. I Am a Pensioner. Will My Pension Income Be Taxed?
No.
Approved pension and retirement benefits remain tax-exempt.
11. Are Military Salaries Taxable?
No.
The new law exempts military officers from tax.
Rightfully so.
12. Do Creatives, Musicians, Authors, and Sports Figures Still Enjoy Foreign Income Exemptions?
No.
All income, whether earned in Nigeria or internationally, is now taxable for Nigerian residents.
So if you earn:
YouTube revenue
Spotify royalties
Book sales from Amazon
Brand deals from abroad
Affiliate commissions
International prize money
…Nigeria wants its portion.
13. Are Crypto Profits Taxable?
Yes.
Crypto, NFTs, and digital asset profits are now taxable.
There is no “wallet they cannot track.”
That era is over.
14. Who Is Exempt From Paying Personal Income Tax?
You are exempt if you earn:
the national minimum wage
less than ₦800,000 per year
Everyone else must pay.
15. What Are the New Tax Bands?
A Progressive System:
₦0 – ₦800,000: 0%
₦801,000 – ₦3,000,000: 15%
₦3,000,001 – ₦12,000,000: 18%
₦12,000,001 – ₦25,000,000: 21%
₦25,000,001 – ₦50,000,000: 23%
₦50,000,001 and above: 25%
Meaning:
If you pray, “Lord, bless me with the land,”
You must also accept:
25% to government
10% to God
= 35% of your financial responsibility.
If that bothers you, don’t argue with the tithe; argue with the government.
Or remain at ₦800,000 and enjoy exemption.
But I believe you want to rise.
Come out of poverty.
16. Are Severance Pay and Employer Compensation Taxable?
Yes.
Severance pay, terminal benefits, and compensation are taxable unless they fall into specific exempt categories like:
death
injury
disability
Any other kind of exit payment above those exceptions is taxable income.
17. Will I Pay Tax If Someone Dash Me Money?
No.
Gifts are not taxable.
But your proof matters more than ever.
Descriptions must clearly state:
“Gift”
“Birthday gift”
“Support for wedding”
This protects you during audits.
18. Will I Pay Tax on Family Support?
No.
Upkeep from:
siblings
parents
children
uncles
aunties
…is not taxable.
But again—document everything clearly.
19. Will I Pay Tax If Someone Repays a Loan I Gave Them?
No.
Loan repayment is not income.
Just ensure you can prove the original loan.
20. Will My Savings Be Taxed?
No.
Only earned income is taxed.
Savings are safe.
Your bank balance is not the issue.
But the source of the money must be clear.
21. Are Interests From Savings or Fixed Deposits Taxable?
Yes.
Interest is income.
Therefore taxable.
22. Is Rental Income Taxable?
Yes.
Rent is business income, whether it is:
a room
a flat
a shop
a shortlet
a duplex
Rental earnings must be declared.
23. Will Cooperative Money Be Taxed?
It depends.
Your contributed capital → not taxable
Dividends, profits, interest → taxable
24. Will I Pay Tax If I Run an Online Business?
Yes.
Online does not mean exempt.
Income is income.
25. What If My Income Is Irregular?
Still taxable.
Tax is based on annual total, not consistency.
26. Will Pastors and Church Workers Pay Tax?
Yes, if they earn:
salaries
allowances
honorariums
Offerings given directly to them as gifts are not taxable, unless they are tied to services.
27. Will Churches and Ministries Pay Tax?
Religious organisations are exempt only on donations.
But business arms like:
schools
bakeries
event centers
water factories
…must pay tax like every other business.
Church-employed staff must also pay.
28. What Happens If I Refuse to Pay Tax?
Penalties include:
heavy fines
blocked accounts
business shutdown
imprisonment
asset seizures
With NIN + BVN + TIN + global data systems, evasion will be extremely difficult.
29. What Should I Do Now? (Before January 1st, 2026)
Hire a tax consultant
Keep proper records
Separate personal and business accounts
Stop cash-based transactions
Use clear transaction descriptions
Declare foreign investments
Appoint a compliance officer if you run a company
Stay transparent
Now is the time to prepare, not after enforcement begins.
Conclusion: Preparing for the New Tax Era and Why Real Estate Is Your Best Shield
Nigeria is entering a new era of taxation, one defined by data, digital tracking, global compliance, and strict enforcement. For years, tax administration in the country relied heavily on paperwork, manual processes, and human discretion.
But from January 1st, 2026, everything changes. Every account, every transaction, every income stream, every debt repayment, every business activity, and every personal earning will be visible through interconnected systems.
This is not a season to panic. It is a season to prepare.
It is a season to understand that tax compliance is no longer optional. It is no longer something you push aside, ignore, or postpone. Whether you are an entrepreneur, a freelancer, a salary earner, a business owner, a pastor, a homemaker selling online, or an investor—the rules will apply to you.
But while we face this new wave of financial scrutiny, there is something you must not forget:
Real estate remains one of the safest shields against excessive taxation.
Not because real estate is used to evade tax, it is not. But because real estate, when strategically chosen and properly structured, gives you what the tax system cannot take away:
Capital appreciation that grows without being taxed yearly
Wealth is stored in physical assets, not volatile cash flows
Rental income that can be structured through allowable deductions
Ownership that protects you against inflation and currency devaluation
Long-term value that remains even as tax policies evolve
The ability to spread income across assets rather than bank accounts
The opportunity to leverage legal tax planning through property trusts, joint ownership, and investment vehicles
While the government can tax your salary, business earnings, and bank interest, it cannot tax the increase in your land value until you sell it. And even when you sell, proper structuring can significantly reduce what you owe.
The wealthy understand this.
The financially literate understand this.
And in a new tax-focused Nigeria, you must understand this too.
The smartest thing you can do today is to begin positioning your finances in ways that protect your future. This is not the season to leave your money lying idle in your account, where it is visible, taxable, and depreciating. It is the season to move strategically—to convert cash into appreciating assets that hold value even in turbulent times.
And few assets on earth hold value like real estate—especially well-selected real estate in fast-growing cities.
If you need clarity on how to position yourself, how to structure your investments, what type of real estate shields you better, or how to diversify your income in a tax-efficient way…
Send me a direct message on WhatsApp:
I will help you break it down.
I will help you review your situation.
And I will guide you with the same insider clarity I have shared in this article.
The future belongs to those who prepare today.
