50 New Tax Exemptions in 2026: Many Will Benefit, But Will You?

Not that long ago, Nigerians were anxious and frustrated about the new tax laws, set to kick in on January 1, 2026. The news that everyone will be taxed even more than they currently are, was difficult to stomach, and understandably so. 

Yesterday, on November 3, the Federal Government (FG), announced not one, not 20, but 50 tax exemptions that’d take effect at the same time as the new tax laws. 

So from January 1, 2026, the Presidential Fiscal Policy & Tax Reforms Committee (PFPTC), led by Taiwo Oyedele, says Nigerians will benefit from 50 new tax exemptions and reliefs under the recently signed tax laws.

This isn’t just “news update”, this is life and death for many young earners and small business owners. No, that’s not an exaggeration. Most Nigerians already struggle to feed their families, and these tax exemptions will reduce the load on people’s pockets. 

These exemptions cut across Nigerians of all categories, but what are they and who would actually benefit from them? Walk with me.

Who Are Those That’ll Benefit?

Again, it’s far reaching, but the first set of people who would enjoy these tax breaks are low earners. Now, depending on who you ask, everyone in Nigeria is a low earner except the senators. However, for these breaks to be effective, “low-earning” has to be defined. Here re the first set of people: 

• Individuals earning national minimum wage or less will be fully exempt from personal income tax. The minimum wage is currently ₦70,000, and in a year, that comes out to ₦840,000. Anyone earning that amount per annum, or less, will be exempt.
• Those with annual gross income up to ₦1.2 million (approx. ₦800,000 taxable) will also be tax-free on PAYE. That means Nigerians earning about ₦100,000 per month will also be exempt from personal income tax or Pay As You Earn (PAYE).
• Small companies (turnover ≤ ₦100 million and fixed assets ≤ ₦250 million) will pay 0% Companies Income Tax.
• Start-ups, agricultural firms, and MSMEs will get targeted reliefs, which means more support for young entrepreneurs and business-owners.

Personal Income Tax & PAYE Reliefs

After taking out money for transport and money for beans and bread, what’s left? Let’s zoom into individual reliefs, because this directly impacts your take-home pay. 

Other than individuals earning the minimum wage or below and those earning up to ₦1.2 million per year, there are other earners that get tax reliefs, but to varying degrees.

• For those earning up to ₦20 million gross, a reduced PAYE rate will apply.
• Gifts received by individuals – cash gifts, that is – will also be tax exempt. Don’t worry you won’t be expected to pay taxes on the money Odogbolu Old Boys Asociation contributed for your birthday.
• Extra deductions allowed include pension fund contributions, NHIS contributions, housing fund, interest on home-loans, life-insurance premiums and even rent relief (20 % of annual rent up to ₦500,000).

Because of these, you’ll keep more of your earnings. Moreover, for renters and young families paying high rents, the rent relief is a direct nod to your reality.

Capital Gains, Pensions & Deductibles

Beyond salary earnings, the reforms cover other important areas like sales. You won’t expected to pay tax on certain sales you make. These include:

• Sale of owner-occupied homes.
• Sale of personal effects or chattels up to ₦5 million.
• Sale of up to two private vehicles per year.

Pension funds, retirement benefits under Pension Reform Act (PRA), and compensation for job loss up to ₦50 million.

This means that if you’ve saved, invested or own property/vehicle assets, you’re less likely to lose large chunks to tax once you sell or transfer them. More so, it shows the system is beginning to consider wealth accumulation, not just earnings.

Corporate, SME & Sector-Specific Reliefs

Importantly, the reforms extend to companies and sectors, and that matters for jobs, start-ups and most importantly, the economy. Here are categories that will benefit:

• Small companies (≤ ₦100 million turnover) and fixed assets under ₦250 million.
• Eligible labelled start-ups: full tax relief.
• Companies that raise staff salaries, provide transport subsidies or hire new staff (retained for 3 years) will get extra deductions (50 %).
• Agriculture (crop, livestock, dairy) will get a 5-year tax holiday.
• VAT / Consumption reliefs: Basic food items, rent, education, health services, baby/sanitary products, disability aids, and electric vehicles all receive full exemption under VAT.
• Stamp duties: e-transfers under ₦10,000, salary payments, intra-bank transfers, share‐transfers: all exempt.

Why These Tax Exemptions Are Critical for 2026?

First, these measures reflect an understanding that Nigeria’s living conditions vary widely. By layering exemptions for the lowest earners, renters, property-owners, asset sellers, start-ups and small businesses, the policy becomes more inclusive. This is positive because:

• It supports income-sensitive relief: those earning less get bigger breaks.
• It acknowledges asset creation and mobility as important, not just earnings.
• It recognises the business-and-employment ecosystem (start-ups, SMEs) as key growth drivers rather than only taxing them.
• It adapts to consumption and living-cost realities: housing, food, health, education all receive relief—so ordinary households get less burdened.

In addition, these reforms may stimulate compliance. If the tax system is fairer and simpler, more people and businesses will participate willingly. As the PFPTC chair noted, one goal is to improve trust, reduce exemptions abuse, and make voluntary compliance more attractive.

Implementation Matters

Of course, the good news doesn’t erase the need for caution: 

• These rules only take effect from January 1, 2026, meaning planning and preparation are key.
• Taxpayers must ensure they document eligibility properly (for example rent paid, pension contributions, business turnover caps).
• Businesses must qualify under “small company” thresholds and meet conditions (turnover ≤ ₦100 m, etc.).
• Government must publish clear guidelines and ensure transparency, otherwise confusion and delays could undermine the relief.

So promises are good, but delivery and clarity will determine real impact.

Conclusion

For young Nigerians who are working, studying, starting businesses or planning to buy homes, the 2026 tax exemptions offer meaningful relief. They aren’t simply “nice to haves”, they address real issues: lower earnings, burdens of rent, barriers to entrepreneurship, cost of living pressures.

By supporting low-income earners, rewarding small businesses, exempting basic goods and assets, and encouraging employment and agriculture, the government is signalling that taxation will become more equitable and growth-oriented.

That said, you must be proactive. Gather documents, understand your eligibility, stay informed when the law takes effect, and plan your finances accordingly. Because relief won’t help if you don’t know you qualify.

In the end, this could be a turning point for Nigeria’s tax system—and for your finances. So pay attention, take action, and let these exemptions work for you.

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