Nigeria Income Tax Rates 2026: Personal Tax, Capital Gains, Company Tax and 2017-18 History
Nigeria introduced a substantially revised income tax framework effective 1 January 2026. This guide explains the current tax bands and principal rules, while preserving the historical 2017-18 rates for readers researching earlier tax years.
Legal framework and commencement
The Nigeria Tax Act 2025 (official government-hosted text) consolidates the previous personal income tax, company income tax and capital gains legislation. The Federal Ministry of Finance transition guidelines confirm the 1 January 2026 commencement and clarify how earlier accounting periods, audits, filings and existing incentives are treated. The Nigeria Tax Administration Act 2025 provides administrative rules; the Nigeria Revenue Service (Establishment) Act 2025 and Joint Revenue Board (Establishment) Act 2025 reorganise revenue institutions.
2026 personal income tax rates
Section 58(1) and the Fourth Schedule of the Nigeria Tax Act 2025 establish progressive rates for individuals. The brackets apply to annual taxable income after applicable exemptions and deductions, not to the whole gross salary at a single flat rate.
| Annual taxable income (NGN) | Marginal rate |
|---|---|
| First 800,000 | 0% |
| Next 2,200,000 (to 3,000,000) | 15% |
| Next 9,000,000 (to 12,000,000) | 18% |
| Next 13,000,000 (to 25,000,000) | 21% |
| Next 25,000,000 (to 50,000,000) | 23% |
| Above 50,000,000 | 25% |
Under section 30, qualifying deductions and reliefs affect taxable income. Rent relief is generally the lower of 20% of annual rent paid and NGN 500,000, subject to statutory requirements. The former consolidated relief allowance is not carried over unchanged. Review the Joint Revenue Board Personal Income Tax Guidelines 2026 for PAYE examples, relief documentation and employer responsibilities.
Resident and non-resident individuals
Tax residence, source of income, the type of employment or business activity and any applicable double-tax treaty determine Nigerian tax exposure. Residents are generally assessed on taxable worldwide income, subject to statutory relief and foreign tax credits. Non-residents may be liable on qualifying Nigerian-source income under the Act. Employers must apply the appropriate PAYE and withholding rules; there is no universal 20% flat tax on every non-resident or all income above NGN 800,000.
Capital gains tax under the 2026 framework
The historic standalone flat 10% capital gains tax is no longer the general rule for disposals arising under the 2026 framework. Chargeable gains are integrated into income taxation: an individual's taxable gains may fall within the progressive personal rates, while a company's chargeable gains generally form part of its taxable profits at the applicable company rate. Exemptions, allowable costs, asset categories, share disposal rules and transitional dates can materially change the outcome. Consult the Nigeria Tax Act 2025, Chapter Two, Part VIII before treating any disposal as taxable.
2026 company income tax and small-company relief
Under section 56 of the Nigeria Tax Act 2025, the general company income tax rate is 30%, while qualifying small companies benefit from a 0% company income tax rate. A small company is generally defined by annual turnover not exceeding NGN 100 million and total fixed assets not exceeding NGN 250 million, subject to statutory exclusions and qualification conditions. A potential reduction of the general rate to 25% should not be treated as operative without confirmation of the required commencement instrument. Certain companies may also face a 4% development levy and other sector-specific rules.
Corporate taxable profits are determined after allowable expenses, losses and capital allowances under the Act. A non-resident company with a Nigerian taxable presence or other taxable Nigerian-source profits should examine the Act's nexus, attribution and applicable treaty provisions.
Withholding tax in Nigeria
Withholding tax is generally a collection mechanism applied to specified payments such as dividends, interest, royalties, rent and certain service or contract fees. The rate depends on the payment type, recipient, residency, current Deduction of Tax at Source (Withholding) Regulations 2024, applicable exemptions and treaties. Withholding may be a credit against final tax in some cases and final in others. For current compliance, see the Joint Revenue Board's tax policies and regulations and the 2026 personal income tax guidelines rather than relying on the historic table below.
Historical Nigeria income tax rates for 2017-18
Before the 2026 reforms, personal income tax was governed principally by the Personal Income Tax Act, with progressive rates as follows. The thresholds refer to successive portions of chargeable income after the then-applicable reliefs.
| 2017-18 annual chargeable income (NGN) | Marginal rate |
|---|---|
| First 300,000 | 7% |
| Next 300,000 | 11% |
| Next 500,000 | 15% |
| Next 500,000 | 19% |
| Next 1,600,000 | 21% |
| Above 3,200,000 | 24% |
Historical capital gains tax
For the 2017-18 period, the general capital gains tax rate was 10%, subject to the former Capital Gains Tax Act and its exemptions. This figure is not the current general 2026 rate.
Historical withholding tax reference
The following table reproduces the original page's indicative 2017-18 withholding categories. Actual liability depended on the nature of the contract, payer, recipient and then-current rules; it should not be used as a current withholding schedule.
| Payment type | Individuals (historic) | Companies (historic) |
|---|---|---|
| Rent, interest and dividends | 10% | 10% |
| Directors fees | 10% | Not applicable |
| Equipment hire | 10% | 10% |
| Royalties | 5% | 10% |
| Consultancy, technical and commission fees | 5% | 10% |
| Management fees | 5% | 10% |
| Construction / building contracts | 5% | 10% |
| Other qualifying contracts | 5% | 10% |
Historical company income tax
The standard company income tax rate in 2017-18 was 30%. The original article also mentioned a 20% concession for certain manufacturing, agricultural or export-oriented businesses under specified conditions; such incentives were conditional and cannot be assumed to apply to all companies with low turnover. For pre-2026 periods, consult the legislation and guidance effective in the relevant assessment year.
Returns, records and transitional obligations
Individuals, employers and companies should retain payroll, contract, expense and asset-disposal records and verify the correct filing authority and due date. The Ministry of Finance transition guidelines explain that prior-period liabilities and assessments remain subject to the prior law. Returns for relevant post-commencement periods are administered under the new framework. Obtain transaction-specific advice where a disposal or accounting period crosses 1 January 2026.
Official legislation and guidance
- Nigeria Tax Act 2025 - government-hosted PDF
- Joint Revenue Board - Personal Income Tax Guidelines 2026
- Federal Ministry of Finance - Tax Acts 2025 transition guidance
- Joint Revenue Board - regulations and tax reforms
- Nigerian Investment Promotion Commission - Investment incentives and tax rates
This article provides general legal and tax information. Rates, thresholds, exemptions and administrative practice should be checked against the current gazetted law and applicable guidance before filing.