The Joint Revenue Board says 18 state Houses of Assembly have adopted a model tax harmonisation law intended to reduce overlapping charges on individuals and businesses.

Executive Secretary Olusegun Adesokan disclosed this at the board’s 160th meeting in Kaduna, where officials reviewed progress and implementation challenges.

According to Adesokan, the framework consolidates more than 50 state and local government collection items into nine categories. He said it also prohibits cash collection and revenue-collection roadblocks.

Adesokan rejected suggestions that the reforms had increased taxes across the board, saying low-income earners and micro-businesses were receiving relief.

Opening the meeting, Kaduna Governor Uba Sani urged revenue authorities to address administrative weaknesses and use technology to improve collection processes.

He emphasised that reform should make compliance easier and strengthen taxpayers’ willingness to meet their obligations, rather than focus solely on increasing revenue.

The board said the meeting would help identify outstanding gaps in implementation. Punch

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Nigeria’s tax collections rose to ₦27.1 trillion within the first seven months of 2026, according to the Nigeria Revenue Service (NRS), highlighting the continued growth of government revenue from taxation.

The revenue performance comes as the Federal Government continues efforts to strengthen domestic revenue mobilisation and reduce dependence on volatile sources of government income. The NRS is responsible for administering federal taxes and improving compliance among taxpayers across the country.

The latest collection figure reflects the growing importance of taxation to Nigeria’s public finances. As government spending demands increase, stronger domestic revenue mobilisation remains critical to financing infrastructure, social programmes and other development priorities.

The NRS has continued to focus on improving tax administration, expanding the country’s taxpayer base and making collection processes more efficient. Greater use of digital systems and data-driven monitoring is also expected to improve compliance and reduce revenue leakages.

For businesses and individuals, the increase in tax collections could signal a stronger emphasis on tax compliance as authorities continue to broaden the formal tax base. The challenge for government, however, will be ensuring that higher revenue collections are matched by efficient and transparent public spending.

Increased tax revenue could provide additional fiscal space for investment in critical infrastructure, including roads, housing, electricity, healthcare and other public services. This is particularly important as Nigeria faces significant infrastructure and housing needs across its rapidly growing population.

The development also highlights the importance of creating a tax system that encourages compliance without placing excessive pressure on businesses and households. A predictable and transparent tax environment can help improve investor confidence while giving government a more sustainable source of revenue.

With tax collections reaching ₦27.1 trillion in seven months, the performance will likely strengthen the government’s focus on domestic revenue mobilisation for the remainder of the year.

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Many Nigerians believe that selling a personal asset such as a house, car, or valuable possession is automatically tax-free. However, the Nigeria Tax Act (NTA) 2025 introduces specific conditions, thresholds, and limits that determine whether gains from such sales are exempt from tax or included in an individual’s taxable income.

The reforms form part of a broader effort to simplify Nigeria’s tax system and align the treatment of gains with the wider income tax framework.

According to a publication by PwC, the new law introduces limits on exemptions for principal private residences, personal chattels, and motor vehicles, while also changing how gains are taxed.

Tax professional Tomi Akinwale explained that gains from the sale of personal assets can carry tax implications, although not every gain will be taxable.

“Thresholds matter, and context determines the tax outcome,” he said.

Can You Sell Your Home Without Paying Tax?

One of the major reliefs under the Act relates to a taxpayer’s principal residence.

Section 51 of the Nigeria Tax Act exempts gains arising from the disposal of a dwelling house and up to one acre of adjoining land, provided the land is not used for commercial purposes.

However, the exemption comes with important conditions.

The relief can only be claimed once during an individual’s lifetime. This means that a taxpayer who has already benefited from the exemption on the sale of one qualifying residential property may not be able to claim it again on another home sale.

The Act also addresses mixed-use properties. Where a building is used partly as a residence and partly for business purposes, only the residential portion may qualify for the exemption. Similarly, where only part of a qualifying property is sold, the proceeds must be apportioned accordingly.

According to PwC, these provisions establish clearer limits to what many taxpayers previously considered a blanket exemption for residential property sales.

What Happens When You Sell Personal Belongings?

The Act also introduces clearer rules for the disposal of personal chattels.

Personal chattels include movable personal property such as jewellery, artwork, household items, collectibles, and other valuable possessions.

Under Section 52 of the Act, gains from the disposal of these assets are exempt only where the total consideration does not exceed N5 million or three times the annual national minimum wage, whichever is higher.

This marks a significant increase from the former Capital Gains Tax Act, which provided a much lower exemption threshold of N1,000 for personal and domestic effects.

As a result, ordinary personal transactions may remain exempt, but high-value disposals could attract tax liabilities depending on the value involved.

The law also contains anti-avoidance measures. Multiple assets sold to the same buyer, connected persons, or persons acting together may be treated as a single transaction for tax purposes, preventing taxpayers from splitting sales to remain below the exemption threshold.

Are Gains from Selling Your Car Taxable?

Section 53 of the Nigeria Tax Act provides a specific exemption for private vehicles.

Under the provision, a motor vehicle used solely for private or non-profit purposes is not treated as an asset for calculating taxable gains.

However, the exemption is not unlimited.

The Act restricts the relief to a maximum of two privately used vehicles disposed of by an individual within a year of assessment.

This means individuals selling one or two personal vehicles annually may benefit from the exemption, while additional disposals could attract closer scrutiny from tax authorities.

Akinwale noted that the provision is designed to provide relief for genuine personal-use vehicles while discouraging repeated sales that resemble commercial trading activities.

Why Are These Changes Being Introduced?

The reforms are part of the government’s wider strategy to improve revenue mobilisation and close loopholes in the tax system.

PwC stated that the new framework aligns the taxation of gains more closely with the broader income tax regime while reducing opportunities for tax arbitrage.

For taxpayers, this means understanding the nature of an asset, the applicable exemption, and the value of a transaction has become increasingly important.

Individuals can no longer assume that every personal asset sale automatically qualifies for tax relief.

What Taxpayers Should Do Before Selling an Asset

Experts advise taxpayers planning to dispose of valuable assets to maintain proper records, including:

• Acquisition costs
• Renovation or improvement expenses
• Valuation reports
• Sale agreements
• Other transaction-related documents

These records may be necessary to determine whether a gain qualifies for exemption and, where tax applies, how much tax is payable.

The Nigeria Tax Act 2025 preserves key exemptions for genuine personal-use assets but introduces clearer rules on eligibility and qualifying conditions.

For homeowners, the principal private residence exemption remains available but can only be used once in a lifetime. For personal belongings, the value of the transaction determines eligibility for relief. For vehicle owners, the exemption applies to a maximum of two private vehicles per year.

As Nigeria moves toward a more integrated tax framework, individuals planning to sell valuable assets should carefully consider the tax implications before completing any transaction.

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Nigerian consumers may soon face higher banking and service charges as financial institutions adjust to the compliance demands of the country’s evolving tax regime, raising concerns that the cost of reforms could eventually be transferred to customers.

Speaking on the development, managing consultant at Pedabo, Albert Folorunsho, warned that businesses are likely to pass rising compliance costs down the value chain.

“All of these costs are going to be passed on to the customer, by either the bank that is on-lending to them or whatever the case may be,” he said.

Analysts and operators have expressed concerns that while the reforms are designed to improve revenue collection and encourage investment, they also introduce new compliance obligations that increase operational costs for businesses.

Companies are now expected to integrate tax compliance more directly into their operations, including transaction processing, reporting systems, and documentation requirements.

The reforms are supported by expanded digital reporting obligations, stricter audit mechanisms, and clearer tax treatment rules, especially in the financial and structured lending sectors.

Folorunsho explained that the shift changes how businesses interact with the tax system, making tax compliance part of day-to-day decision-making rather than a periodic obligation.

For banks and financial intermediaries, this means investing in upgraded systems, enhanced reporting frameworks, and stricter compliance processes, all of which come with additional costs.

Nigeria’s tax reform drive is aimed at improving revenue mobilisation. The country’s tax-to-GDP ratio rose to about 13.5 per cent in late 2025 from below 10 per cent in previous years, with authorities targeting 18 per cent by 2027.

Despite the improvement, the figure remains below the 15 per cent benchmark widely considered necessary to adequately fund government functions.

Compared to regional peers, Nigeria still trails behind countries such as Ghana, Kenya, and Senegal in tax revenue performance.

The reforms include measures such as consolidated development levies and targeted tax credits aimed at broadening the tax base while encouraging investment in sectors like infrastructure and energy.

However, experts warn that the additional compliance requirements could lead to higher costs across the economy.

“Costs related to tax compliance will likely be passed to customers by financial intermediaries,” Folorunsho said.

Authorities have also moved to clarify misconceptions surrounding the reforms, particularly concerns that bank account balances or transfers would be directly taxed.

“Tax is not on your account balance. The basis of calculating tax is not bank accounts,” Folorunsho explained.

Olarinde Olufemi, a member of the UN Subcommittee on Environmental Tax, also clarified that taxable income does not include account balances and that business turnover determines small business tax status.

Experts further explained that monetary gifts are not taxable where no service has been rendered in exchange.

“A gift is what you receive without any consideration. If you have just received a gift, it is not liable to tax,” Folorunsho added.

To ease implementation concerns, officials disclosed that more than 30 draft guidance notes are being finalised to simplify compliance under the new tax framework.

However, delays in issuing detailed guidelines have left many firms navigating uncertainty while trying to comply with evolving regulations.

Analysts say the reforms represent a major shift in Nigeria’s fiscal strategy, focusing more on efficiency, compliance, and wider participation rather than increasing tax rates.

Still, many believe the immediate burden of adjustment is likely to be shared across businesses and consumers through higher service charges and operational costs.

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Nigeria’s tax reform programme is beginning to yield early results, with more than 100 million Nigerians now captured in the tax system, signalling a major shift in compliance and revenue mobilisation.

The disclosure was made by the Minister of State for Finance, Taiwo Oyedele, who said the reforms are already transforming how individuals and businesses engage with the country’s tax framework.

According to him, the number of registered taxpayers has surged from fewer than 10 million before the reforms to over 100 million, reflecting what he described as growing confidence in the new system.

The impact is also being felt within the business space, as thousands of informal enterprises are now seeking formal registration daily with the Corporate Affairs Commission, a trend seen as a significant step toward broadening the tax base.

Oyedele explained that the reforms were designed to reduce the burden on low-income earners and small businesses while encouraging voluntary compliance. Measures introduced include tax exemptions for small companies, higher income thresholds for individuals, and the removal of taxes on essential needs such as food, healthcare, education, transportation, and rent.

He noted that these policy adjustments are helping to reposition the tax system as more inclusive and growth-oriented, particularly for micro, small, and medium enterprises that previously operated outside the formal economy.

The minister also highlighted the introduction of a Tax Ombud system aimed at protecting taxpayers and ensuring fairness, adding that this has contributed to improved trust in the system.

Despite the early gains, Oyedele acknowledged that the reform process is still evolving and may require adjustments over time to address emerging gaps.

He stressed that continuous stakeholder engagement would be critical in refining the laws through periodic updates, particularly via finance legislation.

Addressing recent reports suggesting he admitted errors in the reforms, Oyedele dismissed the claims as misleading, stating that his comments had been taken out of context.

He clarified that while no reform is perfect, ongoing improvements should not be misconstrued as evidence of failure, noting that the legislative process has already been concluded and the laws formally gazetted.

Oyedele urged Nigerians to rely on verified information from official sources to avoid confusion, warning that misinterpretation of policy statements could undermine public understanding of the reforms.

Analysts say the rapid expansion of the tax net and increased business formalisation could significantly boost government revenue in the long term, while also reducing reliance on oil earnings.

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Nigeria’s new tax law has introduced a major change that is already stirring confusion across offices, markets, and online spaces: mandatory annual tax returns for individuals, including low-income earners.

Since the law took effect in 2026, many Nigerians have been asking the same questions. If tax is already deducted from salary, why file again? Do small traders earning below ₦800,000 a year need to bother? And what happens if someone ignores it completely?

Experts say understanding the new requirements early could save Nigerians money, stress, and penalties.

What Is a Tax Return?

A tax return is a yearly declaration of income to the government. It shows how much money a person earned from salary, business, freelance work, rent, or other sources, and what deductions or reliefs apply.

Under the Nigeria Tax Administration Act, filing a return allows tax authorities to confirm whether a person has paid the correct tax, owes additional tax, or qualifies for a refund.

Who Must File Under the New Law?

Under the new framework, every individual with income must file a tax return, even if no tax is ultimately payable.

This includes:

• Salary earners under PAYE
• Freelancers and gig workers
• Small traders and artisans
• Business owners
• Landlords earning rental income

Employers are still required to file PAYE returns for staff by January 31 each year. However, individuals must file their personal tax returns by March 31, regardless of income level.

What About Low-Income Earners?

One key relief under the new tax law is that Nigerians earning ₦800,000 or less annually are exempt from paying personal income tax.

However, experts stress that such individuals must still file a nil return to confirm their exempt status. Failure to do so may result in being classified as non-compliant, which can create problems later when tax clearance is required.

Benefits Many Nigerians Are Missing

Tax experts say filing returns is not just about compliance; it also unlocks benefits.

Rent relief now allows individuals to deduct 20% of annual rent paid from taxable income, provided proper documentation is submitted. This can reduce the amount of tax deducted from salaries or even result in refunds.

Filing also enables access to a Tax Clearance Certificate, which is often required for:

• Bank loans
• Business registrations
• Government contracts
• Visa and official applications

For freelancers and workers with multiple income streams, filing accurately can prevent future disputes and audits.

Penalties Have Increased

The law also introduces stiffer penalties for non-compliance.

Missing the March 31 deadline attracts a ₦100,000 fine for the first month, followed by ₦50,000 for every additional month of delay. Under-declaring income can also lead to interest charges, audits, and enforcement actions.

With improved digital monitoring, including BVN-linked financial data and electronic invoicing, tax authorities now have stronger tools to detect undeclared income.

Challenges on the Ground

Despite the reforms, many Nigerians face real obstacles. Limited internet access, lack of digital skills, missing rent receipts, and difficulty obtaining a Tax Identification Number remain common problems.

Experts argue that tax authorities must increase public awareness, deploy help desks in markets and local councils, and simplify filing processes to ensure inclusion.

What Nigerians Should Do Now

Tax professionals advise Nigerians to start early. Gather payslips, rent documents, and records of side income. Visit state internal revenue portals or the Nigeria Revenue Service platform for guidance.

Those unsure of the process are encouraged to seek help from tax offices or licensed practitioners rather than waiting until deadlines approach.

A Shift Nigerians Must Adapt To

While concerns remain about how tax revenues are used, analysts say the new tax law reflects a shift toward broader compliance rather than higher tax rates.

Understanding and filing tax returns, they say, is no longer optional. It is now a key requirement for financial stability, access to opportunities, and long-term peace of mind.

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The Lagos State Internal Revenue Service (LIRS) has extended the deadline for the filing of employers’ annual tax returns by one week, shifting the cutoff date from February 1 to February 7, 2026.

The extension was announced by the Executive Chairman of LIRS, Dr. Ayodele Subair, who said the decision was taken to give employers additional time to complete and submit accurate returns in line with statutory requirements.

In a statement issued on Friday, Dr. Subair explained that under existing tax regulations, employers are required to file their annual tax returns by January 31 of every year. However, the service decided to grant a brief extension to ease compliance pressures and reduce filing errors.

“The extension is intended to support employers by allowing more time to properly reconcile records and submit accurate annual returns,” the LIRS chairman said.

Compliance remains mandatory

Despite the extension, Dr. Subair stressed that timely tax compliance remains a legal obligation for all employers operating in Lagos State, urging organisations to embed compliance into their routine business practices.

“Employers are expected to treat tax compliance as a core responsibility, not an afterthought. Filing annual returns accurately and on time is critical to sustaining a transparent and efficient tax system,” he stated.

He warned that failure to comply within the extended deadline could attract penalties in line with existing tax laws, adding that the grace period should not be misconstrued as a waiver of statutory obligations.

Mandatory electronic filing

Dr. Subair reiterated that electronic filing through the LIRS eTax platform remains the only approved method for submitting employers’ annual tax returns, noting that manual submissions have been completely phased out.

“All employers must file their annual returns exclusively via the LIRS eTax portal. Manual filing is no longer accepted under any circumstances,” he said.

He described the eTax platform as secure, user-friendly, and accessible around the clock, allowing employers to file returns conveniently without physical visits to LIRS offices.

Employers are required to submit their returns through the official portal at etax.lirs.net, which enables digital processing and faster verification of tax records.

Accurate employee data critical

The LIRS chairman also emphasised the importance of submitting accurate employee information, particularly Tax Identification Numbers (TaxIDs), to avoid delays or rejection of filings.

“Employers must ensure that the TaxID of every employee is correctly captured in their annual returns. Inaccurate or incomplete records could affect processing and compliance status,” Dr. Subair noted.

He explained that accurate data submission helps improve tax administration, strengthens revenue forecasting, and enhances service delivery across the state.

Strengthening Lagos’ revenue base

The extension comes as Lagos State continues efforts to strengthen its internally generated revenue base through improved compliance, digitalisation, and taxpayer education.

LIRS has increasingly relied on technology-driven solutions to simplify tax processes and reduce bottlenecks, while encouraging voluntary compliance among businesses and employers.

Officials say the latest deadline extension reflects a balance between enforcement and support, ensuring that employers have adequate time to comply without undermining statutory timelines.

Dr. Subair urged employers who are yet to file to take advantage of the extension and complete their submissions well ahead of the new deadline.

“The additional time provided should be used responsibly. Employers are encouraged to file early to avoid last-minute technical challenges,” he added.

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The National Orientation Agency (NOA) has dispelled widespread fears that the federal government will directly deduct taxes from Nigerians’ bank accounts when new tax laws take effect in January 2026. In its latest weekly briefing, the agency addressed misconceptions surrounding the Nigerian Tax Act, 2025, and the Nigerian Tax Administration Act (NTAA), emphasizing that claims of automatic deductions are unfounded and stem from misinformation.

“Taxes will not be automatically deducted from the bank accounts of Nigerians,” the NOA stated unequivocally, seeking to reassure the public amid growing anxiety.

Clarifying the provisions of the NTAA, the agency explained that Section 29 mandates banks and financial institutions to submit quarterly reports on customers whose cumulative monthly transactions exceed N25 million for individuals and N100 million for corporate entities. This measure aims solely to detect potential tax evasion and does not authorize any direct withdrawal of funds by the government.

“The reporting requirement is a tool for monitoring and ensuring tax compliance, not a mechanism for automatic deductions,” the NOA added.

Highlighting the limited impact of this provision, the agency noted that only about five percent of bank customers maintain balances exceeding N500,000. Consequently, over 90 percent of Nigerians are unlikely to be affected by the reporting mandate.

The NOA also underscored that the new tax reforms are designed to alleviate financial pressure on low-income earners and small businesses. Individuals with annual incomes of N800,000 or less will be exempt from personal income tax, while businesses generating annual turnovers below N100 million will be relieved from profit tax obligations.

“These reforms seek to broaden the tax base, enhance compliance, and reduce evasion without imposing additional burdens on the majority of Nigerians,” the agency stated.

Furthermore, the agency anticipates that the revised laws will increase transparency in financial reporting and bring more eligible taxpayers into the formal tax system, strengthening Nigeria’s fiscal foundation.

As the January 2026 implementation date approaches, the NOA’s clarifications aim to build public confidence in the government’s commitment to fair and transparent taxation.

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