Nigeria's new tax law for freelancers, in plain English (2026)

If you freelance from Nigeria and your clients are in the USA, the UK or Europe, you have probably heard that “the new tax law taxes your dollars now”. The truth is a bit more careful than that. This post walks through what the law actually says, what we checked, and what nobody has made clear yet.

This is not tax advice. We are a software company, not tax advisers. We read the official text of the law so you do not have to start from a rumour, but your own situation can change the answer. Talk to a qualified tax professional before you decide anything.

What changed

The Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 were published in the Federal Government’s Official Gazette on 26 June 2025. Together they sit inside a bigger tax reform. News reports say the personal income tax parts apply from 1 January 2026. The gazette text we read does not give us one simple sentence we can quote on that, so confirm the start date for your situation with the Nigeria Revenue Service or your State internal revenue service.

Who counts as a tax resident

The Act has a definition of “resident individual”. You are one if, in a year of assessment, you meet any one of these:

• you are domiciled in Nigeria
• you have a permanent place available for your domestic use in Nigeria
• you have a place of habitual abode in Nigeria
• you have substantial economic and immediate family ties in Nigeria
• you spend at least 183 days in Nigeria in a 12-month period, counting annual leave and temporary absences
• you serve as a Nigerian diplomat in another country

It is “any one”, not “all”. A freelancer who lives in Lagos all year will usually meet several of these. A person who left Nigeria years ago and rarely visits may meet none. If you are somewhere in between, get advice.

Foreign income is now in scope

Section 12 of the Act says the income, gains or profits of a resident individual are deemed to accrue in Nigeria and are chargeable to tax in Nigeria wherever they arise, and whether or not they were brought into or received in Nigeria.

In plain words: if you are a resident, the place your client lives is not the test. A dollar payment from a client in Texas that lands in a foreign account is not automatically outside the Act just because the money stayed abroad.

Section 120 gives some relief for double tax. Where income from outside Nigeria was taxed in the source country and is also taxable in Nigeria, the foreign tax may be allowed as a credit, limited to the lower of the Nigerian tax attributable to that income and the tax actually paid abroad. Keep proof of anything you paid abroad.

The bands in the law

The Fourth Schedule sets the rates for individuals. They apply to taxable income, which is what is left after reliefs and exemptions:

Slice of taxable income	Rate
First ₦800,000	0%
Next ₦2,200,000	15%
Next ₦9,000,000	18%
Next ₦13,000,000	21%
Next ₦25,000,000	23%
Above ₦50,000,000	25%

Each rate applies only to its own slice, like steps. As an example of how the steps stack, suppose someone had taxable income of ₦4,000,000. The first ₦800,000 is at 0%. The next ₦2,200,000 at 15% is ₦330,000. The remaining ₦1,000,000 at 18% is ₦180,000. That adds up to ₦510,000. This only shows how the table works. It is not what you owe, because we do not know your reliefs, deductions or residency, and we are not building a tax calculator for that reason.

The Act also contains a rent relief of 20% of the annual rent paid, up to a maximum of ₦500,000, whichever is lower, if the individual accurately declares the rent paid and other information the tax authority requires.

Filing

The Administration Act says a return of income must be filed each year of assessment by every taxable person, whether or not they are liable to pay tax. For income from a trade, business, profession or vocation, the return is to include a statement of accounts attested by the taxpayer, or audited accounts.

You may have read that the deadline is 31 March. We could not find a fixed date in the official text we read, so we are not going to print one. Ask your tax authority.

What we do not know yet

Being honest about gaps is more useful than guessing:

• Late filing penalties. Websites quote different amounts. We could not confirm one from the official text.
• Which exchange rate to use to turn a dollar payment into naira for tax. We found no rule in the text we read.
• Which office you file with. Reports differ on how individual returns are split between the Nigeria Revenue Service and State internal revenue services.
• How the rules apply to your own mix of local and foreign clients, and whether you are better off as a business.

Keep good records now

Whatever the answers turn out to be, the same records will help you:

• every invoice you sent, with its number, date, amount and currency
• proof that the money arrived, such as a bank or wallet statement
• the date you received each payment and the exchange rate you used if you converted it
• receipts for business costs
• proof of any tax paid abroad

Talk to a tax professional

If you earn from abroad, ask a qualified accountant or tax adviser three questions: Am I a resident under the Act? Which office do I file with and by when? How should I record and convert foreign payments? Bring your invoices. Our guide on how freelancers receive money shows where your payments may land, which is the first thing an adviser will ask about.

How a2lance helps, and what it does not do

a2lance lets you raise invoices, send them to clients and record what has been paid, so the paper trail is tidy. It does not calculate your tax, file returns or give tax advice. You can also make a clean invoice with the free invoice generator.