All New Tax Rates in Nigeria 2026 – PIT, CIT, VAT, WHT, Development Levy Explained
The Nigeria Revenue Service (NRS) has officially implemented the most significant tax overhaul in the country’s history.
From January 1, 2026, the new Nigeria Tax Act (NTA) has replaced several old laws to simplify how you pay.
Whether you are a salary earner, a small business owner, or a corporate director, your tax liability has changed.
We have identified the exact rates you will pay in 2026 across all major tax categories.
| Tax Category | 2025 Rate (Old) | 2026 Rate (New) | Who it Affects |
| Personal Income Tax (Tax-Free) | First ₦300,000 | First ₦800,000 | All Salary Earners |
| Small SME CIT | 0% (Under ₦25M) | 0% (Under ₦50M) | Small Businesses |
| Medium SME CIT | 20% (₦25M – ₦100M) | 0% (Under ₦50M) | Growing Businesses |
| Large Corporate CIT | 30% (Above ₦100M) | 30% (Above ₦50M) | Large Companies |
| VAT | 7.5% | 7.5% | Consumers/Businesses |
| Education Tax (TETFund) | 3% | Replaced | Corporates |
| Development Levy | N/A | 4% | Mid-to-Large Corps |
| IT/NASENI/Police Levy | 0.25% – 1% | Replaced | Specific Sectors |
1. Personal Income Tax (PIT) – The ₦800,000 Shield
The biggest win for individuals is the new tax-free threshold. If you earn ₦800,000 or less per year (approx. ₦66,667 monthly), you pay 0% tax. For those earning above this, the new progressive rates are:
- First ₦800,000: 0%
- Next ₦2.2 Million: 15%
- Next ₦9 Million: 18%
- Next ₦13 Million: 21%
- Next ₦25 Million: 23%
- Above ₦50 Million: 25%
Use our [Nigeria Tax Calculator 2026] to see your exact take-home pay.
2. Companies Income Tax (CIT) – Small vs. Large
The NRS has simplified corporate taxes by categorizing businesses based on their turnover.
- Small Companies (Under ₦50M Turnover): 0% CIT.
- Large Companies (Above ₦50M Turnover): 30% CIT.
- Note: Professional service firms (Lawyers, Engineers, Accountants) do not qualify for the 0% rate regardless of turnover.
If you are an SME, ensure your [NRS TIN is Verified] to claim the 0% rate.
3. Value Added Tax (VAT) – The 7.5% Standard
Despite rumors of an increase, the VAT rate remains at 7.5% for 2026. However, the NRS has introduced “Input VAT Recovery.” Businesses can now claim back the VAT they paid on services and assets, not just raw materials. Essential goods like basic food, books, and medical supplies remain at 0% VAT.
4. The New 4% Development Levy
This is the “Consolidated Tax” that replaces several old “nuisance” levies. It officially replaces the Tertiary Education Tax (TETFund), IT Levy, NASENI Levy, and Police Trust Fund.
- The Rate: 4% of assessable profits.
- Who Pays: Only medium and large companies.
- Exemption: Small companies (under ₦50M turnover) are exempt from this levy.
5. Withholding Tax (WHT) – New Rules for 2026
Withholding Tax is now seen as an advance payment of your final income tax.
- Key Relief: Small businesses are exempt from WHT on transactions under ₦2 million per month.
- Standard Rates: Generally 5% for most services and 2% for goods (for residents).
Need to prove your tax status for a contract? See our [NRS Tax Clearance Certificate (TCC) 2026 Guide].
