Nigeria completed its biggest tax overhaul in decades in 2025. The Nigeria Tax Act 2025 and three companion acts were signed on 26 June 2025 and took effect on 1 January 2026, and the Federal Inland Revenue Service (FIRS) was replaced by the new Nigeria Revenue Service (NRS). For Chinese residents and companies, the changes that matter most are the new personal income tax bands, company income tax plus the 4% development levy, and how to use the China–Nigeria double tax treaty.
Personal income tax marginal rates (from 2026)
Key points
- Personal income tax: the first ₦800,000 a year is tax-free and the top rate is 25% (above ₦50m).
- Company income tax: 30% for turnover above ₦100m; small companies are exempt; large firms and multinationals pay at least 15%.
- A 4% development levy on assessable profit replaces several older levies.
- VAT stays at 7.5%; basic food, medical products and education are zero-rated; e-invoicing is now in the law.
- The China–Nigeria double tax treaty has been in force since 21 March 2009 and applied from 1 January 2010.
Main taxes at a glance (from 2026)
| Tax | Rate | Notes |
|---|---|---|
| Personal income tax (PAYE) | 0%–25% | Withheld by employer; rent relief 20%, capped at ₦500,000 |
| Company income tax | 30% / 0% for small companies | Small: turnover ≤ ₦100m and fixed assets ≤ ₦250m |
| Minimum effective tax | 15% | Large companies and multinational group members |
| Development levy | 4% | On assessable profit |
| VAT | 7.5% | Some items zero-rated |
Calculations, filing dates and transition rules are explained in our detailed guide to the 2026 Nigeria Tax Act.
Individuals: how much tax will I pay?
Employers withhold PAYE monthly from salaries earned in Nigeria. There are six bands: 0% on the first ₦800,000, 15% on the next ₦2.2m, 18% on the next ₦9m, 21% on the next ₦13m, 23% on the next ₦25m and 25% above ₦50m. At about ₦1,333 to the dollar in October 2026, the tax-free ₦800,000 is roughly $600. If part of your salary is also paid in China, where you pay tax depends on your residence status and the treaty, so keep your Nigerian tax receipts to claim credit at home.
Companies: tax, incentives and free zones
Companies with turnover above ₦100m pay 30% income tax plus the 4% development levy. Pioneer Status has been replaced by the Economic Development Incentive, a 5% annual tax credit on qualifying new capital spending. Free zone enterprises still get relief, but pay full tax if more than 25% of sales are domestic, and large ones face the 15% minimum rate; see the free zones guide. Tax registration for a new company is covered in the company registration guide.
Tax treaties
The China–Nigeria double tax treaty was signed on 15 April 2002, entered into force on 21 March 2009 and has applied since 1 January 2010. The bilateral investment treaty has been in force since 18 February 2010. On 13 July 2026 Hong Kong and Nigeria signed a tax agreement cutting withholding tax on dividends, interest and royalties from 10% to 7.5%; it is not yet in force. Groups investing through a Hong Kong company should watch for its entry into force.
Compliance reminders
Enforcement is tightening under the new law, and e-invoicing is now a legal requirement. Common problems at Chinese companies include incomplete VAT invoices and input records, late PAYE remittances, missing transfer-pricing documentation, and split payrolls for expatriate staff that are never declared. An annual tax health check by a qualified local firm is worth the cost, and the Nigeria Revenue Service’s latest notices are the final word. Before you leave Nigeria or change jobs, ask your employer for a tax clearance or annual tax certificate; you may need it for permit renewals or to claim a tax credit in China.
Common questions at a glance
Does FIRS still exist? It has been replaced by the Nigeria Revenue Service (NRS), which now handles registration and filing. Are betting winnings taxed? Betting is for adults 18+ only. Since February 2026 Lagos has applied a 5% withholding tax on online betting winnings, deducted by the operator at payout. Are small companies really exempt? Companies with turnover up to ₦100m and fixed assets up to ₦250m pay no company income tax, but must still register and file. For tax-related transfers, see also the naira exchange guide.
Sources
- PwC Nigeria: The Nigerian tax reform acts
- Guardian Nigeria: Who will pay under Nigeria’s new tax laws
- PaySpace: Nigeria tax reform 2026
- AllAfrica: Nigeria Revenue Service replaces FIRS (Jan 2026)
- 商务部《对外投资合作国别（地区）指南·尼日利亚（2025年版）》
- Orbitax: China–Nigeria tax treaty
- HKSAR Government: Hong Kong–Nigeria tax agreement signed (Jul 2026)
- EY: Economic Development Incentive replaces Pioneer Status
- Mondaq: Free trade zones in Nigeria – incentives
- Yogonet: Lagos introduces 5% withholding tax on online betting winnings
In this section
FAQ
When did Nigeria's new tax law take effect?
The Nigeria Tax Act 2025 was signed on 26 June 2025 and took effect on 1 January 2026.
What is the tax-free threshold in Nigeria?
The first ₦800,000 of annual income is taxed at 0%; income above that is taxed progressively from 15% to 25%.
Is there a China–Nigeria double tax treaty?
Yes. It was signed in 2002, entered into force on 21 March 2009 and has applied since 1 January 2010.
What is the VAT rate in Nigeria?
Still 7.5%, with basic food, medical products and education zero-rated.
Facts checked: 2026-10-22 · Niriliya Huaren Editorial Team · How we check facts