President Bola Tinubu has assured Nigerians that the new tax laws will not add an extra burden on existing taxpayers but will provide relief for low-income workers.

This was revealed by the President while delivering his address on Wednesday, as Nigeria marks its 65th Independence Day anniversary.

He said the tax-to-GDP ratio has risen to 13.5 percent from less than 10 percent, adding that the ratio is expected to increase further when the new tax law takes effect in January.

“The tax law is not about increasing the burden on existing taxpayers but about expanding the base to build the Nigeria we deserve and providing tax relief to low-income earners.”

READ ALSO: ‘We Now Sell More Than We Buy’, Tinubu Tells Nigerians On 65th Independence Day

His assurance comes as the new tax laws are set to take effect in January 2026.

The President acknowledged that the various economic reforms have brought what he described as “temporary pain” to Nigerians, adding that allowing the country to slip into bankruptcy was not an option at the time he took over the administration of the country in 2023.

“Fellow Nigerians, I have always candidly acknowledged that these reforms have come with some temporary pains. The biting effects of inflation and the rising cost of living remain a significant concern to our government. However, the alternative of allowing our country to descend into economic chaos or bankruptcy was not an option. Our macro-economic progress has proven that our sacrifices have not been in vain. Together, we are laying a new foundation cast in concrete, not on quicksand.

“The accurate measure of our success will not be limited to economic statistics alone, but rather in the food on our families’ tables, the quality of education our children receive, the electricity in our homes, and the security in our communities. Let me assure you of our administration’s determination to ensure that the resources we have saved and the stability we have built are channelled into these critical areas. Today,  the governors at the state level, and the local government autonomy are yielding more developments.”

He assured Nigerians of hope, urging Nigerians to patronise locally-made goods and pay their taxes.

“Therefore, on this 65th Anniversary of Our Independence, my message is hope and a call to action. The federal government will continue to do its part to fix the plumbing in our economy. Now, we must all turn on the taps of productivity, innovation, and enterprise, just like the Ministry of Interior has done with our travel passports, by quickening the processing. In this regard, I urge the sub-national entities to join us in nation-building.  Let us be a nation of producers, not just consumers. Let us farm our land and build factories to process our produce. Let us patronise ‘Made-in-Nigeria’ goods. I say Nigeria first. Let us pay our taxes.”

Highlights Of New Tax Laws Starting January 1, 2026

• Consolidation And Simplification

The new tax laws repeal and consolidate multiple existing tax statutes, such as the Companies Income Tax Act, the Personal Income Tax Act, the Value Added Tax Act, and the Capital Gains Tax Act, into a single tax regime.

This strategy is aimed at reducing ambiguity, eradicating duplication, and addressing the age-long multiple tax crisis among different levels of government, and addressing misunderstandings. It is also intended to make it easier for taxpayers to easily understand and comply with their tax obligations.

• Relief For Individuals And Small Businesses

Personal Income Tax: Workers earning less than N800,000 annually are now completely exempt from personal income tax.

Company Income Tax

Companies with an annual turnover of up to N100 million and total fixed assets not exceeding N250 million are now exempt from CIT, Capital Gains Tax, and the new Development Levy. This is a significant increase from the previous turnover threshold of N25 million.

VAT Exemptions

The new regime removes Value-Added Tax on a range of essential goods and services, including basic food items, educational books and tuition, and shared road transport services. This is to ease financial burden on everyday citizens.

• Review Of Corporate And Capital Gains Tax

Capital Gains Tax

For companies, the CGT rate is increased from 10% to 30%, aligning it with the Companies Income Tax rate. For individuals, capital gains will now be taxed at the applicable progressive income tax rate based on their income band.

Tax On Digital And Virtual Assets

The new laws broaden the tax base to include profits from digital and virtual assets, reflecting modern economic transactions.

Development Levy

A four percent Development Levy has been introduced, which replaces several smaller sundry levies. This applies to assessable profits for all companies except for small companies and non-resident entities.

• Incentives And Economic Development

The Pioneer Status Incentive regime has been replaced with the Economic Development Tax Incentive. This new regime provides tax benefits for a longer duration (up to 20 years) for businesses in qualifying sectors.

Companies just setting out in the agricultural sector are now exempt from income tax for their first five years of operation in the country to encourage investments in agric-based businesses, encourage production, and enhance food security.

As from January 1, 2026, profits from goods exported from Nigeria are exempt from income tax, provided the proceeds are repatriated back to the country through official legal routes.

• Administrative Reforms

The new laws establish the Nigeria Revenue Service (NRS) as the sole body responsible for collecting federally chargeable taxes, aiming to unify a previously fragmented system.

The Nigeria Tax Administration Act introduces a unified procedural framework for tax administration, including provisions for advance tax rulings, and enhances the enforcement powers of the tax authorities.

Also, an Office of the Tax Ombudsman is created as an independent body to resolve complaints and disputes between taxpayers and tax authorities.