Over the past few months, you’ve probably seen plenty of hot takes online about Nigeria’s new tax policy. Some say it’s another way to “milk citizens,” while others claim freelancers and content creators are doomed. The truth? Most of these opinions are either exaggerated or misunderstood.
Let’s break it down in simple terms.
Key Dates to Keep in Mind
• Effective date: January 1, 2026
• First filing deadline: March 31, 2027 (covering all your 2026 income)
So, if you earn money in 2026, you’ll file and pay by March 2027.
What Exactly Gets Taxed?
The tax isn’t on money sitting in your savings account. It’s on your income — money you earn from work, business, or investments.
Think of it this way:
Income – Expenses = Taxable Profit
Example:
• Mr Ade, a farmer, made ₦1m selling crops.
• He spent ₦700k on fertilizer, labor, and farm tools.
• Net profit = ₦300k.
• That ₦300k is what FIRS will tax, not the whole ₦1m.
Taxable vs. Non-Taxable Income
Not every naira that enters your account will be taxed.
Taxable
• Salary
• Freelancing and remote jobs
• Content creation (YouTube, TikTok, blogs, ads revenue)
• Business profits
• Trading profits (stocks, crypto when cashed out)
Not Taxable
• Gifts from family and friends
• Remittances from abroad
• Betting or giveaway winnings
• Loans
• Money you’re just holding for someone else
How Will It Be Collected?
• Self-filing: You calculate your income, subtract expenses, and report to FIRS.
• Quarterly option: You can spread tax payments across the year instead of paying all at once.
• Digital monitoring: Banks, fintech apps, and BVN-linked accounts may be cross-checked to reduce tax evasion.
Why Influencers & Freelancers Are Concerned
If you earn through:
• PayPal, Payoneer, Geegpay, Grey
• YouTube or TikTok
• Crypto (cashing out via exchanges)
Then yes, this applies to you. FIRS is paying close attention to digital income streams.
POS Operators
Most POS operators in Nigeria are sole proprietors or small businesses.
• Turnover threshold matters:
• If yearly turnover ≤ ₦25m → 0% corporate income tax (if registered as a company).
• But if it’s a sole proprietorship, profit is taxed under Personal Income Tax (PIT).
How it’s taxed:
• Government doesn’t tax the full inflow (since POS agents handle large customer deposits/withdrawals daily).
• Tax is on their commission/profit margin (e.g., ₦100 per withdrawal, ₦50 per deposit).
• If an agent earns ₦1m profit yearly from fees, that ₦1m is the taxable income, not the billions in cash handled.
Other taxes:
• May need to remit Withholding Tax (WHT) on services they pay others for.
• Still liable for VAT if they provide any vatable service (though cash withdrawal itself is not vatable).
Crypto Traders
The new tax laws explicitly recognize digital/virtual assets as taxable.
How it’s taxed:
- Profits from crypto (buy low, sell high) are treated as Capital Gains Tax (CGT) or Income Tax, depending on whether it’s occasional trading vs. business-like activity.
- CGT is 10% in Nigeria (on gains, not on total sales).
- If trading is a regular business (day trading, exchanges, large volumes), FIRS/NRS may classify it as business income → subject to PIT (if individual) or CIT (if company).
Example:
- Ade buys ₦5m worth of Bitcoin, sells for ₦6.2m → profit = ₦1.2m.
- CGT = 10% of ₦1.2m = ₦120,000
Forex Traders
Similar treatment to crypto, but classified under financial trading income.
• Occasional forex trading → taxable as capital gains.
• Full-time/large-scale forex trading → taxable as business income.
• If individual → PIT applies (progressive 7–24%).
• If incorporated company → CIT applies (0%, 20%, or 30% depending on turnover).
Example:
• Trader makes ₦10m profit in a year.
• If sole proprietor → taxed under PIT (let’s say effective ~19% = ₦1.9m).
• If registered company with ₦10m turnover → 0% CIT (small company).
Key Difference Between Them
• POS operators: Taxed on commissions/profit, not on customer deposits/withdrawals.
• Crypto traders: Gains taxed (CGT or income tax depending on activity).
• Forex traders: Similar to crypto, profits taxable as CGT or income tax.
What About Nigerians in the Diaspora?
If you live abroad and only send money home (remittances), you’re not taxed.
But if you’re abroad and still earn income in Nigeria (like renting out your property), then that income is taxable.
Risks of Playing Smart
Some people think they can avoid tax by routing money through crypto wallets or using multiple bank accounts. But remember, blockchain and fintech transactions leave digital footprints. It’s only a matter of time before tax authorities catch up — and penalties can be heavy.
Why This Isn’t All Bad
Yes, taxes are painful, but here’s the bigger picture:
• Countries that tax properly usually have stronger accountability.
• Paying tax also gives you credibility — it makes accessing loans, grants, or government support much easier.
• The more Nigerians comply, the more power we have to demand better leadership.
Final Thoughts
The new tax policy isn’t as scary as it sounds. It’s not about taxing your savings or gifts; it’s about ensuring everyone contributes fairly from what they earn.
As a freelancer, creator, or business owner, the best thing you can do now is:
1. Keep records of your income and expenses.
2. Separate personal spending from business spending.
3. File honestly when the time comes.
What’s your take on this new policy? Do you think Nigerians are ready for it, or is it another struggle ahead? Drop your thoughts in the comments — let’s discuss.
Thanks for clearing my guts about this Tax wahala
Say no to unnecessary tax 😭😭😔
They want us to hit the road and protest like Nepal 🇳🇵