19/10/2025
12 FACTS ABOUT THE NEW TAX REFORMS 2025
◇ Nigerian tax residents are now taxed on their worldwide income.
◇ You become a tax resident if you spend 183 days or more in Nigeria within a year.
◇ Personal Income Tax is the tax generated from individual incomes of Nigeria residents.
◇ Personal Income Tax will be applied to a resident individual's worldwide income, which is now precisely specified by the new Act.
◇ Under the new Nigerian Tax Act, "worldwide income" means that individuals considered tax residents of Nigeria are subject to tax on all their income, regardless of whether it is earned within Nigeria or outside the country.
◇ Tax for non-residents applies exclusively to income generated in Nigeria.
◇You can claim a credit in Nigeria for taxes already paid abroad on the same income, under Double Tax Treaties or unilaterally.
◇ Nigerian remote workers and content creators abroad are now obligated to self-report their Nigeria-sourced income.
◇ The reforms offer diaspora entrepreneurs benefits like investment income exemptions, lower withholding taxes, and raised thresholds for small businesses.
◇All Nigerian-sourced income is subject to reporting,including earnings from remote work or business activities connected to Nigeria.
◇ Living abroad and not in Nigeria typically exempts your foreign income from Nigerian taxation.
◇ NOTE however, that any money transfer made from abroad to persons in Nigeria for any business purposes will attract tax COME 2026 under the new TAX REFORMS.
GENERAL EXAMPLE
Where A, a non-resident comes to Nigeria 🇳🇬, say on a work leave, to spend just 30 days. However, he ends up staying beyond the threshold, he will be taxed, both on his foreign income for the period above the threshold. And where he engages in any income activities within Nigeria, he will be taxed also - whether or not he stayed for 20 days.
