Nigeria’s New Tax Net: Remote Workers to Face Income Tax from 2026
Nigerians working remotely for international companies or operating as freelancers are set to join the country’s tax net. Starting in January 2026, new legislation will require these digital professionals, including those coding for a U.S. startup from Lagos, to pay income tax, similar to traditional employees. This move, which comes after the laws were signed in June 2025, marks a significant shift in Nigeria’s revenue generation strategy, aiming to broaden the scope of taxable income and enhance national earnings.
# Key Details of Nigeria’s Evolving Tax Landscape
The updated tax regulations are a critical component of Nigeria’s renewed efforts to boost its financial resources and streamline its tax processes. Under these new provisions, salaries will be subject to a maximum income tax rate of 25%. This rate positions Nigeria’s personal income tax as comparatively lower than several other African nations, including South Africa (45%), Kenya (35%), Egypt (27.5%), and Algeria (35%). The primary objective behind these reforms is to significantly increase Nigeria’s tax-to-GDP ratio from its current standing of less than 10% to an ambitious 18% by 2027. By bringing more individuals, especially those in the burgeoning remote work and freelance sectors, into the formal tax system, the government aims to achieve greater financial stability and fund essential public services. Chapter Two of the new legislation, specifically addressing the Taxation of Income of Persons, explicitly extends the definition of taxable income to encompass the gains, profits, or earnings of individuals, ensuring wider compliance.
This strategic expansion of the tax base for Nigeria’s remote workers and freelancers underscores a broader governmental commitment to fiscal responsibility. It represents an adaptive approach to an evolving global workforce, ensuring that all contributors to the economy, regardless of their work location or employment structure, share in the national tax burden. As January 2026 approaches, remote professionals across Nigeria will need to prepare for these new financial obligations, aligning with the country’s ambitious targets for economic growth and self-sufficiency.
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