18/12/2025
1️⃣ If your company deducts tax before paying your salary, you are already covered under Pay-As-You-Earn (PAYE). You won’t pay any additional tax on your salary. Your employer will remit your tax directly to the Nigeria Revenue Service (NRS) on your behalf.
▶️ However, you may still need to file an annual tax return if:
i. You earn additional income outside your salary (through another business, freelancing, investments, POS commissions, rental income, etc.).
ii. You qualify for tax refunds or additional deductions (pension, NHF, approved donations).
iii. You want to claim reliefs or allowances not captured under PAYE.
For most full-time employees whose only income is salary, PAYE fulfills your tax obligation, and no further tax is due unless you have other income sources.
2️⃣ PAYE Is Now Lighter:
Your employer will still deduct tax monthly, but for low- and average-income earners, the percentage deducted is now lower than before. According to the tax authorities, deductions are now more progressive.
3️⃣ You Must Have a Tax Identification Number (TIN), Even as an Individual:
Every Nigerian earning income must have a TIN. It is required for:
• Opening bank accounts
• Business transactions
• Loan applications
• Government grants
▶️ How to Get Your TIN:
You can register through the Joint Tax Board (JTB) website, use the FIRS USSD code (*829 #) to check or generate one, or visit a tax office in person. The process is free.
4️⃣ If you earn below ₦800,000 annually (about ₦66,000 monthly), you are fully exempt from paying Personal Income Tax (PIT).
▶️ If you earn above ₦800,000, only the amount above ₦800,000 will be taxed, using progressive tax rates (starting at about 7%). Everyone enjoys the ₦800,000 relief.
5️⃣ Contributions and Gifts Remain Tax-Free:
Savings into pension accounts, life insurance, health insurance, and the National Housing Fund (NHF) remain tax-exempt. Ajo (thrift contributions) is also exempt. Gifts and inheritance (below certain thresholds), scholarships, and some family support funds are not taxed.
6️⃣ Severance Pay, Gratuity, and Compensation Enjoy Higher Tax-Free Allowances:
If you lose your job, are laid off, or receive compensation due to injury or termination, a larger portion, or in some cases, the entire amount, may be tax-free.
7️⃣ You Must Declare All Income Sources. Not Just Salary:
This includes:
• Side hustle income
• Business profits
• Rental income
• Affiliate earnings
• Crypto profits
• Gift card trading profits
8️⃣ Tax Filing Is Now Fully Digital:
You can now file your taxes:
• From your phone
• On a national tax portal
• Without visiting any office
• Without middlemen or agents
✅ Let me stop here for now. Stay glued to my page (Abiodun Olusola)! This December, I’ll explain everything you need to know about the new tax law.
There’s no need to panic about it. We will all be fine, I believe.
Please note: I am not a government official, and I have no personal stake in the new tax law. I am not supporting or promoting it. I’m simply here to enlighten you, free of charge. So please don’t accuse me of anything.
If you choose to panic about it, that’s your decision. If you want to criticize the government, that’s also your business. My goal is purely to educate those who need clarity. This is not political in any way.
©️ Abiodun Olusola (page)kindly follow him for more update on investments, taxation e.t.c.
