Personal Income Tax (PIT) is a tax imposed on the income of individuals, communities, families, executors, and trustees. Under the Nigeria Tax Act 2025, significant reforms have been introduced to make the system more progressive.
Individuals earning an annual taxable income of N800,000 or less are now fully exempt from Personal Income Tax. This is a significant increase from the previous minimum wage-based thresholds.
The tax structure remains progressive, but the top marginal tax rate for high income earners has been increased to 25% (previously 24%).
PIT applies to the worldwide income of Nigerian residents. Residency is defined to include those with significant economic or family ties in Nigeria during the year.
For employees, tax is deducted at source (PAYE). Self-employed individuals must file annual returns. The reforms emphasize digitization of compliance systems.
