As part of the Federal Government’s 2024–2026 Fiscal Reform Agenda, Nigerians are set to benefit from a comprehensive tax relief package designed to ease the cost of living, support small businesses, and stimulate inclusive growth.
Below is the itemized list of the 50 tax exemptions and reliefs that will take effect from January 1, 2026, under the new tax reform laws:
1. Individuals earning the national minimum wage or less are fully exempt.
2. Annual gross income up to ₦1,200,000 is exempt.
3. Reduced PAYE tax applies to those earning up to ₦20 million annually.4. Gifts are exempt from tax.
5. Pension contributions made to a Pension Fund Administrator (PFA) are exempt.
6. Contributions to the National Health Insurance Scheme (NHIS) are exempt.
7. National Housing Fund (NHF) contributions are exempt.
8. Interest on loans used for owner-occupied residential housing is exempt.
9. Life insurance or annuity premiums are exempt.
10. Rent relief of 20% of annual rent (up to ₦500,000) is granted.
11. Pension funds and assets under the Pension Reform Act (PRA) are tax-exempt.
12. Pension, gratuity, or retirement benefits granted under the PRA are exempt.
13. Compensation for loss of employment up to ₦50 million is exempt.
14. The sale of an owner-occupied house qualifies for capital gains tax exemption.
15. Personal effects or chattels worth up to ₦5 million are exempt from capital gains tax.
16. Sale of up to two private vehicles per year enjoys capital gains tax exemption.
17. Gains on shares below ₦150 million per year or gains up to ₦10 million are exempt.
18. Gains on shares above the exemption threshold are exempt if proceeds are reinvested.
19. Capital gains exemptions apply to pension funds, charities, and religious institutions (for non-commercial activities).
20. Small companies with turnover not exceeding ₦100 million and fixed assets not above ₦250 million will pay 0% Companies Income Tax.
21. Eligible labeled startups are fully exempt.
22. Compensation relief grants 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income workers.
23. Employment relief allows 50% deduction for salaries of new employees hired and retained for at least three years.
24. A five-year tax holiday is granted to agricultural businesses (crop production, livestock, dairy, etc.).
25. Gains from investments in labeled startups by venture capitalists, private equity firms, or incubators are exempt.
26. Small companies are exempt from the 4% development levy.
27. Small companies, manufacturers, and agricultural businesses are exempt from withholding tax on their income.
28. Small companies are exempt from withholding tax on payments to their suppliers.
29. Basic food items are subject to 0% VAT.
30. Rent is VAT-free.
31. Education services and materials attract zero-rated VAT.
32. Health and medical services are VAT-exempt or zero-rated.
33. Pharmaceutical products are VAT-exempt or zero-rated.
34. Small companies with turnovers of ₦100 million or less are exempt from charging VAT.
35. Diesel, petrol, and solar-power equipment enjoy VAT suspension or exemption.
36. VAT refunds apply on assets and overheads used in producing VATable or zero-rated goods and services.
37. Agricultural inputs such as fertilisers, seeds, seedlings, animal feeds, and live animals are VAT-exempt.
38. Purchase, lease, or hire of agricultural equipment is VAT-exempt.
39. Disability aids such as hearing aids, wheelchairs, and braille materials are VAT-exempt.
40. Shared passenger road transport (non-charter) is VAT-exempt.
41. Electric vehicles and their parts are VAT-exempt.
42. Humanitarian supplies are VAT-exempt.
43. Baby products are VAT-exempt.
44. Sanitary towels, pads, and tampons are VAT-exempt.
45. Land and building transactions enjoy exemption (VAT or stamp duty depending on the context).
46. Electronic money transfers below ₦10,000 are exempt from stamp duty.
47. Salary payments are exempt from stamp duty.
48. Intra-bank transfers are exempt from stamp duty.
49. Transfers of government securities or shares are exempt from stamp duty.50. All documents related to the transfer of stocks and shares are exempt from stamp duties.
These 50 tax exemptions and reliefs reflect the government’s determination to reduce the financial burden on citizens and stimulate growth across key sectors of the economy.
President Asiwaju Bola Ahmed Tinubu ’s administration means well for Nigerians, and with sustained reforms like this, the nation is on a clear path to recovery and prosperity.