What Nigeria’s 2026 Tax Reforms Mean for Your Income, Business, and Crypto

From January 1, 2026, Nigeria will begin implementing one of its biggest tax reforms in recent years. These changes affect everyday people, business owners, and even those who invest in digital assets like Bitcoin. 

The reforms aim to simplify the system, reduce the burden on small earners and businesses, and encourage Nigerians to plan their finances better.

Here is a breakdown of what the new tax laws mean for your income, your business, and your crypto activities.

Personal Income: Who Pays and Who Doesn’t

Under the new rules, if your personal income is below ₦800,000 a year, you will not pay any income tax. This means students, low-income earners, or those living mainly on small family support will not be taxed on their income.

However, tax relief is no longer automatic. In the past, Nigerians got an automatic tax deduction of 20% of their gross income plus either ₦200,000 or 1% of their income (whichever was higher). 

From 2026, you will only get relief if you put money into specific investments. To reduce your taxable income, you can:

• Contribute to a Retirement Savings Account
  
• Pay into the National Health Insurance Scheme
  
• Buy life insurance for yourself or your spouse
  
• Contribute to the National Housing Fund
  
• Get a 20% rent relief (capped at ₦500,000)
  

In other words, the government now wants Nigerians to save or invest in structured systems before they enjoy tax deductions.

Business Taxes: Relief for Small Companies

If you own a business with an annual turnover of less than ₦50 million, you won’t pay corporate income tax. This is meant to ease the pressure on small companies and startups.

However, businesses will still have to deal with other charges like VAT and electronic transfer taxes. Larger businesses with turnovers above ₦50 million will continue to pay corporate tax as usual.

To stay compliant, business owners are advised to:

• Keep receipts and proper records of transactions
  
• Use digital payments more than cash to create an audit trail
  
• Work with an accountant to avoid errors
  

Crypto and Digital Assets: Profits Now Matter

For Nigerians trading or investing in crypto, the new rules are clear:

• Simply holding Bitcoin or any crypto is not taxable.
  
• If you sell at a loss, no tax applies.
  
• If you sell at a profit, you will pay tax if your total annual income crosses the ₦800,000 threshold.
  
• Income from staking crypto will be taxed because it is seen as earnings.
  

Example:

• Buy Bitcoin for ₦100,000 and sell for ₦200,000 → profit of ₦100,000. No tax, since total income is below ₦800,000.
  
• Buy Bitcoin for ₦100,000 and sell for ₦2,000,000 → profit of ₦1.9 million. You will pay tax on the profit because your income is above the tax-free limit.

Banking, Stocks, and Investments

The reforms also affect how banks and investments are taxed:

• Bank accounts: Interest earned on savings is taxable, but your account balance itself is not.
  
• Bonds: Federal Government bonds remain tax-free.
  
• Stocks: Holding shares is tax-free. Selling at a profit? You’ll be taxed on the gains.
  
• Rent: You can claim 20% relief on rent, capped at ₦500,000.
  
• Insurance premiums: Payments remain tax-free.
  
• Retirement savings: Contributions, growth, and withdrawals are tax-free.
  

What You Should Do Now

The key message is simple, income is taxable, assets are not. You will only be taxed when money comes in as profit, interest, or earnings.

To prepare for 2026, consider talking to a tax professional who can guide you on the best way to reduce your tax burden. As a business owner, keep proper documentation and rely less on cash transactions. And, as an individual, take advantage of tax relief options like pensions, health insurance, and housing contributions.