By Chioma Obinagwam
On June 26, 2025, President Bola Ahmed Tinubu signed four transformative tax reform bills into law, marking Nigeria’s most significant fiscal overhaul since 1999. Effective January 1, 2026, the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Act, and Joint Revenue Board Act aim to simplify compliance, boost revenue, and align with global standards. Tax expert @FinPlanKaluAja1, in a detailed X post, offers critical insights on how individuals and businesses can navigate these changes. His advice emphasizes strategic investments and professional guidance to maximize tax benefits.
Key Changes in the tax reform
The new tax regime introduces exemptions and incentives but requires proactive financial planning. Unlike the current law, which grants automatic tax relief (20% of gross income plus ₦200,000 or 1% of gross, whichever is higher), the 2025 reforms tie deductions to specific investments. Small businesses and low-income earners benefit significantly, but compliance with other taxes, like VAT and electronic transfer levies, remains.
Kalu Aja’s key points for navigating the reform
@FinPlanKaluAja1 highlights the following actionable insights:
Income tax exemptions: Individuals earning below ₦800,000 annually pay no personal income tax. For example, a ₦100,000 remittance or crypto profit under this threshold is tax-free, but earnings above ₦800,000 (e.g., ₦1,900,000 crypto profit) are taxable at 15%–25%.
Corporate tax relief: Companies with turnovers below ₦50 million (up from ₦25 million) or fixed assets under ₦250 million are exempt from Companies Income Tax, Capital Gains Tax, and the 4% Development Levy. A business earning ₦1,900,000 profit from a crypto sale avoids corporate tax if under this threshold.
Investment-based deductions: To claim tax relief, individuals must invest in a Retirement Savings Account, National Health Insurance Scheme, National Housing Fund, or life insurance for themselves or their spouse. Rent relief (20% of rent paid, capped at ₦500,000) replaces the Consolidated Relief Allowance.
Professional guidance: Tax avoidance is legal, but evasion is not. Kalu advises hiring an accountant or tax professional, or pooling resources with others to afford expert advice, emphasizing, “Tax is not a Twitter discussion.”
Strategic compliance for success
With these reforms, Nigeria incentivizes financial planning and small business growth. By following @FinPlanKaluAja1’s advice—investing strategically and seeking professional help—individuals and businesses can navigate the new tax landscape effectively while minimizing liabilities.
Kalu Aja, Confiance News gathered, is a respected financial planner and economic analyst with over two decades of experience helping Nigerians understand complex fiscal policies, personal finance, and national reforms. His insights simplify economic shifts, making them accessible to professionals, entrepreneurs, and everyday citizens.
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