The Federal Government has introduced a new tax regime requiring all individuals earning taxable income to file a self-assessment return declaring all income sources by March 31 of every year, while corporate organisations must submit their annual employee tax returns by January 31.
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, made the clarification during an online engagement session organised in collaboration with the Joint Revenue Board (JRB) for human resource managers, payroll officers, chief financial officers and tax managers.
Oyedele explained that the session was designed to guide employers and businesses on the practical implementation of the new Tax Reform Acts across workplaces nationwide.
Under the new framework, individuals and businesses benefiting from special tax incentives are now required to file a separate return disclosing the incentives enjoyed. The Joint Revenue Board—made up of federal and state tax authorities—will coordinate the process to ensure a clear and seamless experience for taxpayers.
Addressing partnership income, Oyedele clarified that personal income tax for partners must be paid to the states where the partners reside, not to a central national tax office. According to him, this ensures fairness and allows states to receive revenue linked to residents living and working within their jurisdictions.
“Personal Income Tax remains payable to the relevant State Internal Revenue Services, not the NRS,” Oyedele said on his WhatsApp platform.
“All revenue agencies will work together under the Joint Revenue Board to ensure a harmonised and seamless experience for taxpayers.”
He also highlighted provisions designed to protect low-income earners, noting that workers earning the national minimum wage or less are automatically exempted from personal income tax.
“The new laws protect low-income earners with automatic exemption for anyone earning the national minimum wage or less,” he said, adding that workers earning slightly above the threshold may still pay no tax once allowable deductions and reliefs are applied.
“Where deductible contributions and rent relief are taken into account, employees earning up to ₦100,000 per month may also see their tax liability drop to zero,” he explained.
On remote work and foreign employers, Oyedele said the tax system has been adjusted to boost Nigeria’s attractiveness to global talent and investors. Under the new rules, foreign companies will no longer be taxed in Nigeria solely because their employees work remotely from the country.
“Nigeria is now more competitive for global talent,” he said.
To ensure proper compliance, Oyedele outlined a step-by-step approach for calculating employee taxes. Payroll managers are to begin with gross income, add benefits-in-kind where applicable, deduct pension, NHIS, NHF and similar contributions, then apply rent relief—20 per cent of actual rent paid, capped at ₦500,000. The first ₦800,000 of taxable income is exempt, with progressive rates applied thereafter.
Although the top marginal tax rate under the new law is 25 per cent, Oyedele noted that most workers would pay far less due to available deductions and reliefs.
He said the reforms are aimed at creating a fairer, simpler and worker-friendly tax system, while ensuring that all levels of government receive adequate revenue to deliver public services.
As implementation begins, he stressed that timely filing and proper understanding of the new rules will be crucial for both employers and employees to avoid penalties and fully benefit from the reliefs provided by law.