The new Nigerian tax law (Nigeria Tax Act 2025) changed the thresholds quite significantly. Here’s the exact, current position—no guesswork.
1. For Individuals (Salary Earners, Civil Servants, etc.)
✅ Tax-free threshold:
If you earn ₦800,000 or less per year
→ You pay ZERO tax
That is roughly:
₦66,667 per month
👉 What happens above ₦800,000?
Only the amount above ₦800,000 is taxed
Tax is progressive (0% – 25%)
Example:
Salary = ₦1,200,000/year
First ₦800,000 = 0% tax
Remaining ₦400,000 = taxed at 15%
📌 Simple interpretation
Annual Income
Tax
≤ ₦800,000
No tax
Above ₦800,000
Start paying tax
⚠️ Extra note (important)
Even if you earn slightly above:
You may still pay very small tax, not heavy
2. For Companies (Businesses)
✅ Tax-free threshold (new rule):
If a company earns ₦100 million or less per year (turnover)
→ No Company Income Tax (CIT)
But there’s a condition:
Fixed assets must not exceed ₦250 million
👉 If above ₦100 million:
Company pays:
30% Corporate Income Tax
Other applicable taxes/levies
📌 Simple interpretation
Company Turnover
Tax
≤ ₦100 million
No company income tax
> ₦100 million
Tax applies
3. Big Picture (What Changed)
Before:
Tax started from very low income
Now:
Government shifted burden to:
Higher earners
Bigger companies
👉 Low-income individuals and small businesses are now mostly protected
4. Practical Meaning for You
As a civil servant:
If your salary is:
Around minimum wage → likely no tax
Mid-level → small tax
High income → progressively higher tax
Bottom Line
Individuals:
👉 Start paying tax only after ₦800,000/year
Companies:
👉 Start paying company tax only after ₦100 million turnover