LAGOS: The Presidential Fiscal Policy and Tax Reforms Committee has released detailed clarifications to ease growing concerns among Nigerians in the diaspora about the new tax laws scheduled to take effect in 2026.
According to a statement by the committee’s chairman, Taiwo Oyedele, obtained by rapidospace News Online on Thursday, the upcoming framework seeks to make Nigeria’s tax system simpler, fairer, and globally competitive particularly for citizens residing overseas.
The committee explained that personal transfers such as family remittances, gifts, refunds, or community savings contributions do not qualify as taxable income.
Only income earned or deemed to be income such as salaries, business profits, or investment returns will be subject to taxation. Each taxpayer is expected to self-report their income and pay tax were due.
To allay fears of double taxation, the committee clarified that income earned abroad and brought into Nigeria by non-residents will be exempt from tax, whether or not it was taxed in the foreign country.
Nigeria’s existing Double Taxation Agreements (DTAs) with several countries remain valid, while unilateral reliefs will apply for nations without such arrangements to ensure taxpayers are not charged twice.
Residency status will continue to be determined by the 183-day rule—based on the total number of days spent in Nigeria within a 12-month period.
Non-residents will only be taxed on income derived from Nigerian sources such as rent, dividends, or business profits.
The committee noted that income from investments in Nigeria may either be exempt, subject to Capital Gains Tax (CGT), or liable to withholding tax as a final levy.
Government bonds, including Sukuk, remain fully tax-exempt.
Under the new reforms, CGT applies to sales of real estate except for owner-occupied buildings.
Shares are exempt from CGT up to ₦150 million in proceeds and ₦10 million in annual gains.
Dividends, rental income, and non-government bond interest attract a 10% withholding tax as a final charge, which may reduce to 7.5% for residents of partner countries such as the United Kingdom, South Africa, and China.
Clarifying issues around pensions and remote work, the document stressed that only income generated within Nigeria will be taxable for non-residents.
Pensions and stipends earned abroad will not be taxed unless tied to work done in Nigeria.
Similarly, remote workers will be taxed according to the rules of the country where they reside or earn income, not necessarily where payment originates.
Non-residents without Nigerian-source income are not required to obtain a Tax Identification Number (TIN) or file annual returns.
However, individuals with employment or business income from Nigeria must file returns through simplified digital platforms such as TaxProMax or the Joint Tax Board (JTB) portal.
TINs can be obtained via https://tin.jtb.gov.ng, while companies automatically receive one upon registration with the Corporate Affairs Commission (CAC).
The committee reaffirmed that registered non-governmental organizations (NGOs) remain tax-exempt provided they operate strictly for charitable purposes and meet all reporting requirements.
Diaspora-owned small and medium enterprises (SMEs) operating in Nigeria will be taxed like local firms but will continue to enjoy incentives and reliefs available to small businesses.
To strengthen public trust, the new tax framework mandates transparency in the use of tax revenues through regular reporting, independent oversight, and clear links between tax collections and infrastructure or service delivery.
Safeguards are also being introduced to prevent corruption and protect taxpayer data.
According to Oyedele, several incentives under the reforms will encourage diaspora-led investments in agriculture, manufacturing, and the creative sectors.
Additional benefits include VAT exemptions on real estate transactions and corporate tax reliefs for SMEs.
He emphasized that the ultimate goal of the reforms is to make Nigeria’s tax regime more equitable, transparent, and investor-friendly eliminating double taxation and aligning the system with international best practices.
