The new tax law, set for implementation in 2026, has generated serious concerns among citizens, business owners, investors, and Nigerians in the diaspora, with a major point of contention on why diaspora citizens who neither work in nor earn from the Nigerian economy should be taxed at all.
In a statement sighted by TVC on Thursday, the Chairman Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, made clarifications on how the Tax affects every citizen, dismissing the fear stirring on social media, suggesting that the government will deduct tax on regular transfers, like upkeeps, gifts, family remittance, refunds, including community savings or contributions.
Oyedele provided answers to some of the frequently asked questions and clarified issues of concern.
๐๐ฆ๐ฉ๐๐๐ญ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ฐ ๐๐๐ฑ ๐๐๐๐จ๐ซ๐ฆ ๐๐๐ฐ๐ฌ ๐จ๐ง ๐๐ข๐ ๐๐ซ๐ข๐๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐๐ข๐๐ฌ๐ฉ๐จ๐ซ๐๐๐ข๐ฅ๐ฅ ๐ญ๐ก๐ ๐ฆ๐จ๐ง๐๐ฒ ๐ ๐ฌ๐๐ง๐ ๐ญ๐จ ๐๐ข๐ ๐๐ซ๐ข๐ (๐๐จ๐ซ ๐๐๐ฆ๐ข๐ฅ๐ฒ, ๐ฎ๐ฉ๐ค๐๐๐ฉ, ๐ ๐ข๐๐ญ๐ฌ, ๐ฉ๐ซ๐จ๐ฃ๐๐๐ญ๐ฌ ๐จ๐ซ ๐จ๐ญ๐ก๐๐ซ ๐ฉ๐๐ฒ๐ฆ๐๐ง๐ญ๐ฌ) ๐๐ ๐ญ๐๐ฑ๐๐ ๐ฎ๐ง๐๐๐ซ ๐ญ๐ก๐ ๐ง๐๐ฐ ๐ฅ๐๐ฐ๐ฌ?
A: No, genuine personal transfers such as family remittances, gifts, refunds (e.g., flight tickets), or community savings contributions are not treated as taxable income. Only income earned or deemed to be income (e.g., wages, business profits, investment returns) is subject to tax. Every individual is required to self-report their income and pay tax where applicable. Tax authorities are expected to issue guidelines on how to distinguish taxable from non-taxable inflows.
๐๐ข๐ฅ๐ฅ ๐ ๐๐ ๐ญ๐๐ฑ๐๐ ๐ญ๐ฐ๐ข๐๐, ๐๐๐ซ๐จ๐๐ ๐๐ง๐ ๐ข๐ง ๐๐ข๐ ๐๐ซ๐ข๐, ๐จ๐ง ๐ญ๐ก๐ ๐ฌ๐๐ฆ๐ ๐ข๐ง๐๐จ๐ฆ๐?
A: No. Income earned abroad and brought into Nigeria by a non-resident individual is now specifically exempted from tax in Nigeria, regardless of whether tax was paid abroad or not, for instance, those who reside in countries with no personal income tax. In addition, Nigeria has Double Taxation Agreements (DTAs) with several countries, and the new tax laws provide for unilateral relief where a DTA does not exist to ensure that the same income is not taxed twice.
๐๐จ๐ฐ ๐ข๐ฌ ๐ญ๐๐ฑ ๐ซ๐๐ฌ๐ข๐๐๐ง๐๐ฒ ๐๐๐ญ๐๐ซ๐ฆ๐ข๐ง๐๐, ๐๐ง๐ ๐ฐ๐ข๐ฅ๐ฅ ๐ง๐จ๐ง-๐ซ๐๐ฌ๐ข๐๐๐ง๐ญ๐ฌ ๐ฐ๐ข๐ญ๐ก ๐๐ข๐ ๐๐ซ๐ข๐๐ง ๐๐ฌ๐ฌ๐๐ญ๐ฌ ๐จ๐ซ ๐๐๐๐จ๐ฎ๐ง๐ญ๐ฌ ๐๐ ๐ญ๐๐ฑ๐๐? ๐๐ง๐ฒ ๐ข๐ฆ๐ฉ๐๐๐ญ ๐จ๐ง ๐๐ฎ๐๐ฅ-๐๐ข๐ญ๐ข๐ณ๐๐ง๐ฌ๐ก๐ข๐ฉ?
A: Residency is based on the 183-day rule (cumulative days of physical presence in Nigeria within 12 months). Non-residents are taxed only on income derived from Nigeria (e.g., rental income, dividends, business profits). Diaspora Nigerians living abroad who are not tax resident in Nigeria are not taxed on their foreign employment or business income. Dual citizenship has no impact on the tax status of an individual, whether resident or non-resident in Nigeria.
๐๐จ๐ฐ ๐๐จ ๐ญ๐ก๐ ๐ง๐๐ฐ ๐ฅ๐๐ฐ๐ฌ ๐๐๐๐๐๐ญ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ๐ฌ (๐ฌ๐ญ๐จ๐๐ค๐ฌ, ๐ซ๐๐๐ฅ ๐๐ฌ๐ญ๐๐ญ๐, ๐๐จ๐ง๐๐ฌ, ๐ญ๐ซ๐๐๐ฌ๐ฎ๐ซ๐ฒ ๐๐ข๐ฅ๐ฅ๐ฌ, ๐๐ฎ๐ค๐ฎ๐ค, ๐๐ญ๐.)?
A: Generally, income from investments in Nigeria is either exempt, subject to capital gains tax (CGT) or withholding tax as a final tax. Government bonds, including Sukuk, are tax-exempt. CGT applies to the sale of real estate other than the sale of owner-occupied buildings. Shares are exempt up to proceeds not exceeding N150 million and N10 million gains in a year. Dividends, non-government bond interest and rental income are subject to withholding tax at 10% as final tax, which may be reduced to 7.5% for recipients in certain countries such as the UK, South Africa and China.
๐๐ข๐ฅ๐ฅ ๐ข๐ง๐๐จ๐ฆ๐๐ฌ ๐ฌ๐ฎ๐๐ก ๐๐ฌ ๐ฉ๐๐ง๐ฌ๐ข๐จ๐ง๐ฌ, ๐ฌ๐ญ๐ข๐ฉ๐๐ง๐๐ฌ, ๐จ๐ซ ๐ซ๐๐ฆ๐จ๐ญ๐ ๐ฐ๐จ๐ซ๐ค ๐๐๐ซ๐ง๐ข๐ง๐ ๐ฌ ๐จ๐ ๐๐ข๐๐ฌ๐ฉ๐จ๐ซ๐๐ง๐ฌ ๐๐ ๐ญ๐๐ฑ๐๐ ๐ข๐ ๐ซ๐๐๐๐ข๐ฏ๐๐ ๐ข๐ง๐ญ๐จ ๐ ๐๐๐ง๐ค ๐๐๐๐จ๐ฎ๐ง๐ญ ๐ข๐ง ๐๐ข๐ ๐๐ซ๐ข๐ ๐จ๐ซ ๐๐๐ซ๐ง๐๐ ๐ฐ๐ก๐ข๐ฅ๐ ๐ญ๐๐ฆ๐ฉ๐จ๐ซ๐๐ซ๐ข๐ฅ๐ฒ ๐ฉ๐ซ๐๐ฌ๐๐ง๐ญ ๐ข๐ง ๐๐ข๐ ๐๐ซ๐ข๐?
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A: Only income that arises in Nigeria is taxable for non-residents. Pensions and stipends from abroad are not taxed in Nigeria unless received for work done in Nigeria. Remote workers are taxed based on the rules in the country where they are resident or earn such income, not merely where payment is made. For residents (see Q3), worldwide income applies, subject to reliefs, allowances, and exemptions, e.g., low-income thresholds.
๐๐จ ๐๐ข๐ ๐๐ซ๐ข๐๐ง๐ฌ ๐๐๐ซ๐จ๐๐ ๐ง๐๐๐ ๐ ๐๐๐ฑ ๐๐๐๐ง๐ญ๐ข๐๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ฎ๐ฆ๐๐๐ซ (๐๐๐) ๐จ๐ซ ๐ญ๐จ ๐๐ข๐ฅ๐ ๐๐ง๐ง๐ฎ๐๐ฅ ๐ญ๐๐ฑ ๐ซ๐๐ญ๐ฎ๐ซ๐ง๐ฌ ๐ข๐ง ๐๐ข๐ ๐๐ซ๐ข๐?
A: It depends. A TIN is not required, and there is no requirement to file tax returns unless you earn employment or business income from Nigeria. Non-residents without Nigerian-source income are not obliged to file annual returns. Those with taxable employment or business income in Nigeria are required to file returns. Simplified channels (e.g., TaxProMax, online TIN applications) are available to ease compliance. The same rule applies to the opening and continued operation of a bank account in Nigeria, a TIN is not required unless such an account is for business purposes or the receipt of income.
๐๐จ๐ฐ ๐๐๐ง ๐๐ข๐ ๐๐ซ๐ข๐๐ง๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐๐ข๐๐ฌ๐ฉ๐จ๐ซ๐ ๐ฐ๐ก๐จ ๐ซ๐๐ช๐ฎ๐ข๐ซ๐ ๐ ๐๐๐ ๐จ๐๐ญ๐๐ข๐ง ๐จ๐ง๐?
A: For individuals, a TIN can be obtained from the Joint Tax Board via tin.jtb.gov.ng. For companies, TIN is now automatically assigned at the point of registration with the Corporate Affairs Commission. Those with existing companies without a TIN can obtain one from the FIRS.
๐๐จ๐ฐ ๐๐ซ๐ ๐๐๐๐ฌ ๐๐ง๐ ๐๐ข๐๐ฌ๐ฉ๐จ๐ซ๐-๐จ๐ฐ๐ง๐๐ ๐ฌ๐ฆ๐๐ฅ๐ฅ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ๐๐ฌ ๐ข๐ง ๐๐ข๐ ๐๐ซ๐ข๐ ๐๐๐๐๐๐ญ๐๐?
A: NGOs are tax-exempt if they are registered and operate strictly for charitable purposes, and comply with reporting and filing requirements. Diaspora-owned SMEs in Nigeria are treated like local businesses, taxed on profits but eligible for incentives and reliefs available to small enterprises.
๐๐จ๐ฐ ๐ฐ๐ข๐ฅ๐ฅ ๐ญ๐ก๐ ๐ ๐จ๐ฏ๐๐ซ๐ง๐ฆ๐๐ง๐ญ ๐๐ง๐ฌ๐ฎ๐ซ๐ ๐๐๐๐จ๐ฎ๐ง๐ญ๐๐๐ข๐ฅ๐ข๐ญ๐ฒ ๐ข๐ง ๐ญ๐ก๐ ๐ฎ๐ฌ๐ ๐จ๐ ๐ญ๐๐ฑ๐๐ฌ ๐๐จ๐ฅ๐ฅ๐๐๐ญ๐๐?
A: The reforms mandate transparency measures, including public reporting, governance structure and independent oversight for tax revenues. Other fiscal measures are being strengthened to link tax revenues to visible infrastructure and service delivery, with safeguards against corruption and a framework to prevent and punish misuse of taxpayer data.
๐๐ซ๐ ๐ญ๐ก๐๐ซ๐ ๐ข๐ง๐๐๐ง๐ญ๐ข๐ฏ๐๐ฌ ๐จ๐ซ ๐ฌ๐ฉ๐๐๐ข๐๐ฅ ๐๐๐ง๐๐๐ข๐ญ๐ฌ ๐๐จ๐ซ ๐๐ข๐๐ฌ๐ฉ๐จ๐ซ๐ ๐๐ข๐ ๐๐ซ๐ข๐๐ง๐ฌ ๐ฎ๐ง๐๐๐ซ ๐ญ๐ก๐ ๐ง๐๐ฐ ๐ซ๐๐๐จ๐ซ๐ฆ๐ฌ?
A: Incentives under the new laws apply generally to certain investments, including diaspora-led investments in key sectors (e.g., priority sector incentives in agriculture, creative sector, manufacturing, etc), SME corporate tax exemption threshold, exemption of VAT on real estate, etc.
๐๐๐ฒ ๐๐๐ค๐๐๐ฐ๐๐ฒ: The reforms make the tax system in Nigeria fairer and more friendly to Nigerians in the diaspora, address the incidence of double taxation, align Nigeria with global best practice, simplify and provide clarity where tax is payable or filing obligation is applicable.
