If you’ve spent the last year working from your favourite Lagos café or a home office in Abuja while “clocking in” for a company in London or New York, you already know that the remote life is the ultimate flex. However, as we step into 2026, the “administrative” side of the hustle is getting a significant makeover.
On January 1, 2026, the Nigeria Tax Act and its accompanying bills officially took effect. Insights from the National Revenue Service indicates that these reforms are part of a broader mandate to modernise and streamline tax administration.
Here is a breakdown of what the new Nigeria Revenue Service (NRS) rules mean for your Naira.
More Cash in Your Pocket: The ₦800,000 Threshold
Let’s start with the good news. The government has officially raised the tax-exempt threshold to help with the rising cost of living. The Nigeria Tax Act (NTA) 2025 stipulates that if your annual income is ₦800,000 or less, you are officially exempt from Personal Income Tax (PIT).
This means entry-level remote workers or those side-hustling while finishing school keep 100% of their earnings up to that point.
The “183-Day Rule” and Your Tax Residency
One of the biggest questions for digital nomads is: “Where do I actually owe tax?” The 2026 laws have cleared up the residency fog.
According to PwC Nigeria’s Global Tax Summaries, if you are physically present in Nigeria for 183 days or more in any 12-month period, you are a tax resident. This means your “worldwide income”—including foreign currency payments from overseas—is subject to tax in Nigeria, regardless of where the employer is based.
Simplification for the “Solopreneur”
Many remote workers operate as small businesses or registered freelancers. If that’s you, there’s a silver lining. Reports from Techpoint Africa highlights that small companies with a turnover of ₦100 million or less are now exempt from Companies Income Tax (CIT) and the newly introduced Development Levy. This allows you to reinvest more into your equipment and “work-from-anywhere” setup.
Redundancy and “Rainy Day” Protection
In the volatile world of global tech, “layoffs” have unfortunately become a common word. The new laws offer more of a cushion here. According to an analysis by Andersen in Nigeria, tax-exempt compensation for loss of employment (redundancy pay) has been significantly increased from ₦10 million to ₦50 million. This ensures that if a foreign contract ends abruptly, the taxman won’t be taking a huge chunk of your severance package.
The New “Development Levy”
You might notice a new term popping up on corporate invoices: the Development Levy. The Joint Revenue Board Act (JRBEA) has consolidated several smaller taxes, like the Tertiary Education Tax and IT Levy, into a unified 4% levy. While this primarily impacts larger companies, it simplifies the “alphabet soup” of Nigerian taxes, making it easier for everyone to stay compliant.
The 2026 tax reforms are leaning heavily toward simplification and digitisation. While the idea of the Nigeria Revenue Service (NRS) having a clearer view of digital income might feel daunting, the higher thresholds and exemptions are a breath of fresh air. As always, if your hustle is reaching “big league” status, it’s worth a quick chat with a tax pro!
As always, if your “hustle” is getting substantial, it’s worth having a quick catch-up with a tax consultant to ensure you’re making the most of the new reliefs!
