On 26 June 2025, President Bola Ahmed Tinubu signed the four Tax Reform Bills (the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Act, and the Joint Revenue Board Act) into law. And on January 1st, 2026, the Nigerian Tax Reform finally took effect.
Nigerians across various sectors are grappling with the implications of the country’s recent tax reforms, which have been met with a mix of confusion, scepticism, and apprehension. To understand the on-the-ground impact, Piggyvest interviewed five Nigerians to share their personal and professional perspectives on the new tax reforms.
Babajide Duroshola, MD of M-Kopa
What was your initial reaction when you first heard about Nigeria’s tax reforms?
My first thought was: these guys are going to take more of my money without giving me anything in return.
And from a business operations perspective?
From that perspective, there was greater clarity. One thing I liked was the introduction of a tax ombudsman desk for dispute resolution. Previously, if you had issues with the FIRS, you had to travel to Abuja, carry all your documents, and keep going back and forth just to find the right person to speak with. That wasn’t sustainable. Having a proper channel for resolving tax disputes is a good thing. But the capital gains* tax part? I’m not a fan of that.
*The new tax reforms significantly change how Capital Gains Tax (CGT) is calculated. Previously, individuals paid a flat 10% tax on profits from the sale of assets such as land, stocks, or cryptocurrencies. Now, capital gains are consolidated with your regular income and are subject to the progressive tax brackets. This adjustment could increase the tax burden on investment income, depending on your overall income level.
For someone who doesn’t fully understand the new tax laws, can you explain how people can navigate them legally?
This really applies to individuals who hit the 25% tax bracket. When you look at the system, the real compression starts for anyone earning between ₦18 million and ₦50 million annually—you might lose about 1% to 4% of your monthly income. Once you’re above ₦50 million, the higher you go, the more you lose. You could see as much as a 10% reduction in your take-home pay because of changes like the removal of the consolidated relief allowance and the new tax bands.
Now, when it comes to taxes, you have legal, legitimate options for managing your tax burden. They include taking a mortgage, since the interest is tax-deductible. You can also contribute to a life insurance plan or make voluntary contributions to your pension. The interesting thing about voluntary pension contributions is that you can access 50% of that money every quarter. If you deposit ₦1 million, you can withdraw ₦500,000, though the interest is subject to withholding tax.
What’s the general sentiment you’ve observed?
There’s a lot of misinformation. First, people don’t trust the government. When there’s no trust, it’s hard to believe the intentions are good, even if they are. Then you have the whole confusion with the gazette. The version presented to the National Assembly was apparently different from the version that was ultimately passed. So people are confused about what the law actually says.
The other thing is that taxes are personal. Nobody likes paying them, especially when you don’t see the benefits. And because Nigerians like to flex on social media—everybody claims to be rich on Twitter—the reality is now hitting home. Most people don’t even earn up to the threshold where they’d be affected. If you earn below ₦12 million a year, you’re actually taking home more money under the new system—about 3% to 4% more. If you’re earning around ₦1.2 million a month, that’s maybe an extra ₦10,000. It’s not much, but it’s something.
But the real issue is trust. If you don’t trust the government, it doesn’t matter what they do, you’ll always assume the worst.
Looking ahead, do you have any recommendations? Do you think things will get better or worse?
I don’t trust the government, so I don’t expect anything to change for the better. My question is always: what have you done with the little you already had? Nothing. You see state governors buying houses for lawmakers in Abuja instead of in their own states. They’re buying new SUVs every year. All of that is taxpayers’ money being wasted while they claim there’s not enough revenue. Imagine what happens when they start collecting even more. No, I don’t trust that anything will change.
Ama Udofa, Content Creator
What was your initial reaction when you first heard about Nigeria’s tax reforms?
To be honest, it was pure apprehension. As a full-time employee, I was fine. I’ve always remitted taxes. However, as a creator, you’re already your own HR, finance, and legal team. When I heard “tax reform”, my first thought wasn’t about national development; it was, “How much more of my time is this going to take, and how much is it going to cost me?”
And I knew it would cost a lot.
What stood out to you?
What stood out most was the ₦25 million threshold for digital businesses. It felt like the government finally drew a line in the sand and said, “We see you as an industry now.” That’s sort of validating. It means what wasn’t previously considered a real job is now considered a job. But it’s also a warning that the days of flying under the radar are over.
Interesting. And how are you navigating this? Is it changing your approach?
It’s forced me to be much more clinical. In my 9-to-5, taxes are invisible—the company does the hard work of remitting my salaried tax, and I only confirm the details. But in my creator life, I have to be the one holding the line.
It hasn’t just changed my “math” but also how I negotiate. I previously factored in the Withholding Tax (WHT) credit notes. But now I have to follow up to ensure the brand is sufficiently professional to handle the tax documentation properly. I’m apprehensive about working with those who don’t, because I don’t want to incur a tax liability I can’t prove I’ve already partially paid.
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What is the general conversation among fellow creators?
Mostly anxiety about double taxation. Many of us are concerned about being taxed on our gross revenue without accounting for our significant overhead. I pay my lawyer a percentage on every brand deal and my assistant a salary. There are also day-to-day costs. And when I host events, I incur additional wage and logistics costs.
Plus, when you’re a food and lifestyle creator, your work is part of your life, and your living is your job. How do I prove that an expensive dinner or filling up my tank to drive to shoot locations is, in fact, work? Or that I got invited to industry events and every expense incurred, including buying outfits, etc., is part of the job?
That’s a real concern.
There’s also talk about registering companies and all the paperwork, but if the reforms make it harder to deduct real business expenses, then being a creator becomes significantly less sustainable. Creators are asking: “Are they going to tax the money I already spent just to make the content?”
Many aspects remain opaque or confusing, but serious creators are doing their best to consult tax and legal professionals.
What are your worries or expectations?
My concern is that the tax system may outpace the infrastructure. I’m worried about the tech side of the Nigeria Revenue Service. Will their systems be as seamless as the apps we use for work? Or will I be stuck in a manual, bureaucratic loop trying to prove I’m compliant?
I expect a lot of growing pains. I’m preparing for a future where I have to treat my brand like a corporation, not a hobby. We continue to observe and hope for the best.
Oyinkansola Edem, Freelance Content Marketer
What was your initial reaction when you first heard about Nigeria’s tax reforms? What stood out to you as a freelancer?
My initial reaction was worry and stress, because the cost of living is already so high in Nigeria. The taxes will increase the pressure on everyone, and as a relatively high-income earner, I’ll be more affected than some others.
Freelancers have traditionally been exempt from many tax obligations, but the new reforms are coming for us, so no hiding place for anyone. For example, I received an email from my bank a few days ago stating they’d start withholding tax on my interest.
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As someone operating outside traditional payroll structures, how are you navigating these changes? What are you doing differently?
I’ve already reached out to my lawyer, who’s helping me incorporate my agency business. Through it, I’ll manage my work and income, as well as the subcontractors I’ve been working with informally.
This will help me document cash flow properly, deduct appropriate expenses, and pay contractors (and myself) without incurring exorbitant taxes on money that isn’t even all mine.
So the tax I’ll be paying then is the company tax on actual profits and personal income tax on my own salary—and maybe withholding subcontractor taxes if my lawyer says it’s necessary.
Have you talked to other freelancers or clients about the reforms? What’s the general vibe or concern you’re hearing?
Conversations have been ongoing, especially on LinkedIn, where I’m quite active. The general sentiment is similar to mine, and it was even from these talks and interacting with my dad (an experienced accountant) that I figured out the approach I’m now taking.
Looking ahead, what do you expect will actually change for freelancers like yourself? What are you preparing for or worried about?
Any freelancer who doesn’t structure their business and keeps earning as an individual will lose most of their income to taxes (despite their operating expenses), especially if they’re within the high annual income tax bracket. If they try to avoid paying, it’ll likely incur penalty fees, which will make the situation even worse.
The one the bank deducts itself, we have no control over that whatsoever—except we start keeping cash at home, which is quite unsafe. I think fintech apps like Piggyvest and others will also start withholding taxes on our interests and profits.
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Elizabeth Ikotiko, Owner of ScentsbyLibeth
What was your initial reaction when you heard about the tax reforms?
My reaction was mixed. As a small business owner, I was concerned about more financial pressure. What stood out was the government’s focus on expanding the tax base and improving compliance. That could bring more fairness to the system, but it also made me wonder—will small businesses get the support they need to adapt, or will we just be expected to figure it out on our own?
Has the reform changed how you manage your business taxes?
Yes. I’m now more intentional about record-keeping and tracking income and expenses more carefully. I’m also paying closer attention to deadlines and thinking about getting professional advice. I haven’t made major changes yet, but the reforms have pushed me to plan better and be more proactive.
What’s the general sentiment among other small business owners in your circle?
It’s a mix of concern and cautious optimism. Many are worried about increased tax burdens, multiple taxation, and unclear guidelines. But there’s also hope that if done right, the reforms could create a more transparent system. The common complaint is that the government hasn’t done enough to educate small businesses or make compliance easier.
What are you expecting or preparing for?
I’m expecting stricter monitoring and possibly higher tax obligations. My main worry is that without proper support, small businesses will struggle to keep up. And this will affect cash flow and growth. But I’m hopeful that if the reforms are fair, they could level the playing field and encourage better business practices.
Are you making any changes to your business structure as a result of the reforms?
I’ve been considering changing from a Business Name (Enterprise) to a Limited Liability Company, but it’s not easy. The registration fees, legal paperwork, and compliance requirements are much higher for an LLC. There’s also the headache of understanding new tax obligations: corporate income tax, filing requirements, and regulatory reporting. The transition itself can disrupt your operations as you have to update bank accounts, contracts, and records. The long-term benefits might be worth it, but the immediate costs and stress are high.
Have you started registering your LLC?
Yes, I have. My application is currently awaiting approval. Unfortunately, it’s been several weeks, and the delay has been quite frustrating. This is one of the major concerns small business owners face, due to slow processing times and administrative bottlenecks. These delays create uncertainty and can slow down planning and compliance, especially when you’re trying to align with new tax reforms within a limited timeframe.
What does the ₦100 million threshold mean for your business?
My business falls below that threshold, so if I register as an LLC, I won’t have to pay company income tax. But I’ll still need to file annual returns at 0%, and that’s where it now gets tricky. I’m not familiar with the filing system, so I’ll need to pay someone to handle it. It’s one of those things where you’re technically exempt from tax, but you still have to spend money to be compliant. For small business owners like me, that extra cost and paperwork are concerning.
Joy Chime, Assistant Editor, Narrative Landscape Press
What was your initial reaction to the news of the tax reforms?
The immediate thought was that tax equals deductions. Despite all the talk about refunds and incentives—such as setting up limited liability companies—most people don’t have the time or energy to navigate those complexities for a few freelance gigs a year. There is deep scepticism because the government is asking for more taxes while spending as if resources were infinite, rather than respecting the sweat and hard work of the people.
How easy has it been to understand the actual implications of the new law?
It has been incredibly difficult. Even after reading various summaries on how to interpret the incoming tax laws to avoid being caught unprepared, much remains unclear. There was also significant confusion because the version presented to the National Assembly by the FIRS apparently differed from the version ultimately enacted. This lack of clarity makes it hard to know if your take-home pay will actually increase or decrease.
What have you learned about how these reforms affect a standard salary?
Management meetings with accountants have suggested that while pay might slightly increase for some, it depends on specific reliefs. For instance, there is a rent relief of ₦500,000. However, when you start totalling deductions for pension, health insurance, and various schemes, you begin to wonder how much actual cash is left in your pocket for daily life.
Are you worried about how these deductions will be implemented?
There is concern that if deductions are taken from basic salary to fund health insurance, pensions, and housing schemes, immediate take-home pay will be restricted. Many are waiting for final management calculations to see whether they need to “tighten their belts” further.
How do these reforms affect people who earn freelance income alongside a 9-to-5?
There is a lot of talk about a threshold (such as ₦100 million for small businesses) below which you don’t pay certain taxes but still need to declare income. The real worry is that if freelance income goes into a regular personal savings account, it might make you appear to be in a higher tax bracket than you actually are.
What is your strategy for managing this “burden of proof”?
The burden of proof is now on the individual. You have to be able to prove that every Naira entering your account is either already taxed or isn’t taxable income. My strategy is to become more disciplined in record-keeping. I intend to use a dedicated account for freelance income to make tracking easier. Otherwise, you end up acting as your own accountant on top of your regular job and daily stressors.
What is the general sentiment you’re picking up from others regarding these taxes?
Most Nigerians feel a mix of resistance and resignation about these tax reforms. On one hand, people are upset. Why should more money be deducted from their income when they don’t see what their taxes are doing for them? On the other hand, there’s a familiar “let’s wait and see” attitude. Nigerians have learned to adjust to dysfunction, so many are simply bracing themselves for whatever comes next.
To make matters worse, some landlords and service providers are already adding 7.5% VAT to their invoices, even though they’re unsure whether their services fall under the new tax rules.
Do you think most people actually understand what they are paying?
Many people are frustrated by the layers of taxes. If you go to a restaurant, you aren’t just paying for food; you’re also paying VAT, a consumption tax, and a service charge. By the time you add a tip, the extras can feel like they could have bought another plate of food. There is a general lack of curiosity, or curiosity that leads to confusion, because the laws are hidden in layers of fine print.
As a mid-level professional, are you concerned that career progression will only result in higher tax burdens?
That is the main fear. If a salary increase triggers a recalculation that significantly increases the tax burden, the net “win” for the employee feels diminished. But if you work for a company that is already compliant and provides regular evidence of tax remittances (like monthly notifications from the state Internal Revenue Service), the transition shouldn’t be a massive shock.
