By Taiwo Oyedele
From 1 January 2026, the new tax laws will provide many reliefs and exemptions for low-income earners, average taxpayers, and small businesses including:
1. Individuals earning the national minimum wage or less (exempt) 2. Annual gross income up to 1,200,000 (translating to about 800,000 taxable income) is exempt 3. Reduced PAYE tax for those earning annual gross income up to 20 million 4. Gifts (exempt)
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5. Pension contribution to PFA 6. National Health Insurance Scheme 7. National Housing Fund contributions 8. Interest on loans for owner-occupied residential housing 9. Life insurance or annuity premiums 10. Rent relief 20% of annual rent (up to 500,000) and
11. Pension funds and assets under the Pension Reform Act (PRA) are tax-exempt. 12. Pension, gratuity or any retirement benefits granted in line with the PRA 13. Compensation for loss of employment up to 50 million
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14. Sale of an owner-occupied house 15. Personal effects or chattels worth up to 5 million 16. Sale of up to two private vehicles per year 17. Gains on shares below 150 million per year or gains up to 10 million 18. Gains on shares above exemption threshold if the proceed is reinvested 19. Pension funds, charities, and religious institutions (non-commercial)
20. Small companies (turnover not more than 100 million and total fixed assets not more than 250 million) pay 0% tax 21. Eligible (labelled) startups are exempt 22. Compensation relief 50% additional deduction for salary increases, wage awards, or transport subsidies for low-income workers 23. Employment relief 50% deduction for salaries of new employees hired and retained for at least three years 24. Tax holiday for the first 5-years for agricultural businesses (crop production, livestock, dairy etc) 25. Gains from investment in a labeled startup by venture capitalist, private equity fund, accelerators or incubators
26. Small companies are exempt from 4% development levy
27. Small companies, manufacturers and agric businesses are exempt from withholding tax deduction on their income 28. Small companies are exempt from deduction on their payments to suppliers
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29. Basic food items 0% VAT 30. Rent Exempt 31. Education services and materials 0% VAT 32. Health and medical services 33. Pharmaceutical products 0% VAT 34. Small companies ( 100m turnover) are exempt from charging VAT 35. Diesel, petrol, and solar power equipment VAT suspended or exempt 36. Refund of VAT on assets and overheads to produce VATable or 0% VAT goods and services 37. Agricultural inputs fertilizers, seeds, seedlings, feeds, and live animals 38. Purchase, lease or hire of equipment for agric purposes 39. Disability aids hearing aids, wheelchairs, braille materials 40. Transport shared passenger road transport (non-charter) 41. Electric vehicles and parts exempt 42. Humanitarian supplies exempt 43. Baby products 44. Sanitary towels, pads or tampons 45. Land and building
46. Electronic money transfers below 10,000 47. Salary payments 48. Intra-bank transfers 49. Transfers of government securities or shares 50. All documents for transfer of stocks and shares
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