Nigeria's tax system changed significantly for 2026 under the Nigeria Tax Act 2025 — a much higher tax-free threshold and a completely different relief mechanism tied to actual rent paid.
2026 Tax Brackets (Nigeria Tax Act 2025)
| Taxable Income (NGN) | Rate |
|---|---|
| 0 – 800,000 | 0% |
| 800,001 – 3,000,000 | 15% |
| 3,000,001 – 12,000,000 | 18% |
| 12,000,001 – 25,000,000 | 21% |
| 25,000,001 – 50,000,000 | 23% |
| 50,000,001+ | 25% |
The Nigeria Tax Act 2025, effective January 1, 2026, replaced the previous ₦300,000 tax-free threshold with a much higher ₦800,000 threshold — a significant change for lower earners.
Rent Relief Replaced the Old Consolidated Relief Allowance
The previous Consolidated Relief Allowance (CRA) has been replaced with a rent relief: 20% of annual rent paid, capped at ₦500,000. This is a meaningfully different deduction mechanism — it directly ties relief to actual housing costs rather than a flat percentage-of-income formula.
Common Mistakes
- Using the old ₦300,000 threshold. This was replaced by ₦800,000 starting January 1, 2026 — a common source of outdated estimates.
- Still claiming the old CRA formula. Rent relief (20% of rent, capped at ₦500,000) replaced it entirely — you need actual rent payment records to claim it now, not just a percentage of income.
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🇳🇬 Nigeria Tax CalculatorFrequently Asked Questions
When did Nigeria's new tax brackets take effect?
January 1, 2026, under the Nigeria Tax Act 2025.
What replaced the Consolidated Relief Allowance?
A rent relief of 20% of annual rent paid, capped at ₦500,000 — you need to have actual rent payments to claim this, unlike the old CRA which was a flat formula based on income alone.