Nigeria Implements New Tax Laws: Impact of ₦800k Threshold & Bank Narration Rules

Nigeria has officially commenced a significant fiscal overhaul on January 1, 2026, following the signing of the Nigeria Tax Act by President Bola Tinubu in 2025. The new tax laws introduce rules governing personal income tax and corporate tax administration.

The reforms include a ₦800k income threshold, stricter compliance measures for high-turnover businesses and wealthy individuals, and the replacement of the previous flat relief system with a progressive tax structure. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, clarified that the tax authorities will monitor deductions based on bank transfers to combat baseless tax insinuations and misinformation.

The system will continue to be based on self-declaration, with taxpayers required to report their income annually. The reforms also involve the Nigeria Revenue Service (NRS) transitioning towards a digital-first enforcement model.