50 Tax Exemptions for Workers, Businesses Herald FG’s Target for Inclusive Growth in 2026
The Federal Government has unveiled an extensive package of 50 tax exemptions and reliefs to take effect from January 1, 2026, in a major push to reduce the financial burden on citizens and stimulate economic expansion.
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, said the new measures, totalling 50 distinct exemptions, form part of the administration’s broader strategy to simplify Nigeria’s tax system and make it more equitable for low- and middle-income earners as well as small businesses.
According to details released by the committee, the policy will exempt individuals earning the national minimum wage or less from paying Personal Income Tax. Workers with an annual income of up to ₦1.2 million—roughly ₦800,000 in taxable income—will also fall outside the tax bracket.
The framework introduces a progressive structure for PAYE, reducing the tax burden for those earning up to ₦20 million yearly.
Certain allowances, including pensions, health insurance, and housing contributions, will remain deductible, while rent reliefs of up to 20 per cent per year, capped at ₦500,000, will apply.
Oyedele explained that retirees’ benefits and compensation for job loss of up to ₦50 million will stay tax-free, ensuring that vulnerable groups are protected.
He added that the reforms also prioritise asset ownership. Gains from selling an owner-occupied home, personal effects valued at up to ₦5 million, or two private vehicles within a year will no longer attract Capital Gains Tax.
Shareholders will likewise benefit from exemptions on transactions below ₦150 million annually or up to ₦10 million, while reinvested share proceeds will enjoy similar waivers. Pension funds, charities, and non-commercial religious organisations will maintain their existing tax-free status.
Companies with annual turnover under ₦100 million and fixed assets not exceeding ₦250 million will be exempt from Companies Income Tax. Firms that increase salaries or offer transport support to low-income staff will qualify for a 50 per cent additional tax deduction, while those that employ and retain new workers for at least three years will get a similar incentive.
In agriculture, enterprises involved in crop, livestock, or dairy production will enjoy a five-year tax holiday. Investors in certified startups through venture capital or accelerator programmes will also receive tax reliefs.
The Value Added Tax regime will be restructured to exempt or zero-rate essential goods and services, including basic food items, rent, education, health, agricultural inputs, diesel, petrol, and solar energy equipment.
Small companies earning less than ₦100 million annually will no longer need to charge VAT, while items such as baby products, disability aids, sanitary supplies, and shared passenger transport will also be VAT-free.
Electronic transfers below ₦10,000, salary payments, intra-bank transactions, and transfers involving government securities or shares will no longer attract stamp duty charges.
Economic analysts say the reforms signal one of the boldest efforts in years to fix Nigeria’s tax system, ease the cost of living, and promote voluntary compliance.
Oyedele said the initiative underscores government’s resolve to build a fair, predictable tax regime that supports productivity and inclusive growth, describing it as “a pathway to shared prosperity built on equity and efficiency.”
