The Presidential Fiscal Policy and Tax Reforms Committee has issued clarifications to address concerns raised by Nigerians in the diaspora regarding the new tax reforms set to take effect in 2026. The explanations were contained in a document released by the committee’s Chairman, Taiwo Oyedele.
According to the committee, personal transfers from abroad — including family support, gifts, refunds, and community savings contributions — will not be taxed. It emphasized that only income earned or classified as income, such as salaries, profits from business operations, and investment returns, is taxable.
The committee further stated that every individual is required to self-report income and pay tax only where necessary, noting that the reforms are aimed at eliminating confusion and double taxation.
On concerns relating to income earned abroad, the committee clarified that any foreign income brought into Nigeria by a non-resident is exempt from tax, regardless of whether tax was paid abroad. It added that Nigeria has several Double Taxation Agreements (DTAs), and where no DTA exists, unilateral relief is available to ensure the same income is not taxed twice.
Regarding residency status, the committee reaffirmed that Nigeria applies the 183-day rule, meaning individuals physically present in the country for 183 days or more within a 12-month period are considered tax residents. Nigerians living abroad who do not meet this threshold are not taxed on their foreign employment or business income. Dual citizenship, the committee noted, has no effect on tax obligations.
For investments, it stated that government bonds and Sukuk instruments remain tax-exempt, while capital gains tax applies mainly to the sale of real estate that is not owner-occupied. Dividends, rental income, and interest from non-government bonds attract a 10% withholding tax, which may be reduced to 7.5% for citizens of countries with which Nigeria has tax agreements, such as China, South Africa and the UK.
On remote work and pensions, the document clarified that only income arising from work done in Nigeria is taxable, and pensions earned abroad are not taxable unless tied to work performed in Nigeria. Remote workers are taxed based on where they reside and where the work is carried out, not where the salary is paid from.
On tax compliance, the committee noted that non-residents without Nigeria-sourced income are not required to file tax returns or obtain a Tax Identification Number (TIN). However, individuals or businesses earning income within Nigeria must register and file returns using simplified platforms such as TaxProMax and the Joint Tax Board’s TIN portal.
The committee also explained that NGOs remain tax-exempt as long as they operate solely for charitable purposes and comply with reporting standards. Diaspora-owned SMEs operating in Nigeria will be taxed like other local businesses but remain eligible for small business incentives and exemptions.
It said the broader reforms aim to improve transparency, reduce corruption in tax administration, link revenue to visible public services, and create a fairer and more globally competitive tax structure.
