Question 1

What are the Nigerian tax rates for 2026?

Accepted Answer

Under the Nigeria Tax Act 2025, the 2026 personal income tax rates are: 0% on the first ₦800,000; 15% on ₦800,001–₦3,000,000; 18% on ₦3,000,001–₦12,000,000; 21% on ₦12,000,001–₦25,000,000; 23% on ₦25,000,001–₦50,000,000; and 25% on income above ₦50,000,000. This progressive system means your effective tax rate is always lower than your top bracket.

Question 2

How much can I earn tax-free in Nigeria?

Accepted Answer

The tax-free threshold for 2026 is ₦800,000 per year (approximately ₦66,667 per month). This is a significant increase from the previous ~₦300,000 threshold. If you earn below ₦800,000 annually, you owe zero tax, though you may still want to track your income for documentation.

Question 3

When is the tax filing deadline in Nigeria?

Accepted Answer

The annual tax filing deadline is March 31 each year for the previous year's income. For 2026 earnings, you must file by March 31, 2027. Other deadlines include monthly VAT returns (due by the 21st) and monthly PAYE remittance (due by the 10th). Late filing incurs penalties starting at ₦50,000.

Question 4

How do I get a TIN (Tax Identification Number) in Nigeria?

Accepted Answer

You can get a TIN through: 1) The Joint Tax Board (JTB) website at jtb.gov.ng, 2) FIRS TaxPro Max portal, or 3) Any tax office in person. You'll need your NIN, BVN, valid ID, and proof of address. Processing typically takes 24-48 hours online. Your TIN is a unique 10-14 digit number used for all tax filings.

Question 5

Do I need to file taxes if I earn below ₦800,000?

Accepted Answer

Technically, you're not required to file if you earn below the ₦800,000 threshold and have no tax liability. However, filing a nil return can be useful to establish a tax history, which may be required for loans, visas, or government contracts. KeepAm helps you track income to prove you're under the threshold.

Question 6

How do progressive tax brackets work?

Accepted Answer

Nigeria uses a progressive tax system where different portions of your income are taxed at different rates. For example, if you earn ₦5,000,000: the first ₦800,000 is taxed at 0%, the next ₦2,200,000 (₦800,001–₦3,000,000) at 15%, and the remaining ₦2,000,000 at 18%. Your effective rate ends up being about 13.8%, not 18%.

Question 7

What is the difference between marginal and effective tax rates?

Accepted Answer

Your marginal rate is the rate on your next naira of income (your highest bracket). Your effective rate is your total tax divided by total income. Someone earning ₦10,000,000 has a 18% marginal rate but only about 12% effective rate. KeepAm shows both rates to help you understand your actual tax burden.

Question 8

Are company tax rates different from personal income tax?

Accepted Answer

Yes. Under the Nigeria Tax Act 2025: Small companies (turnover ≤₦50M) pay 0% Company Income Tax; Medium companies (₦50M–₦500M) pay 20%; Large companies (>₦500M) pay 30%. Plus, there's a 4% Development Levy on profit for companies with taxable profit over ₦500,000.

Question 9

What is the VAT rate in Nigeria?

Accepted Answer

The standard VAT rate in Nigeria is 7.5%. VAT applies to most goods and services. Essential items like basic food, medical services, educational materials, and baby products are exempt. Businesses with annual turnover of ₦50 million or more must register for VAT and charge it to customers.

Question 10

What is Capital Gains Tax in Nigeria?

Accepted Answer

Capital Gains Tax (CGT) is charged at 10% on gains from selling assets like property, shares, and investments. The gain is calculated as selling price minus acquisition cost. Some exemptions apply, including gains from selling your primary residence (under certain conditions) and securities traded on the Nigerian Stock Exchange.

Question 11

What documents do I need to file taxes in Nigeria?

Accepted Answer

You'll need: 1) TIN (Tax Identification Number), 2) Income statements/payslips/bank statements, 3) Receipts for deductible expenses, 4) Rent receipts for rent relief, 5) Pension contribution statements. KeepAm helps you organize all these throughout the year so you're ready for filing.

Question 12

What happens if I don't file taxes in Nigeria?

Accepted Answer

Failure to file taxes in Nigeria carries penalties under the Nigeria Tax Act 2025: ₦50,000 for the first month, plus ₦25,000 for each subsequent month. Interest also accrues at CBN rate plus 10% on unpaid taxes. Persistent defaulters may face prosecution. FIRS can also place restrictions on banking and travel.

Question 13

What are the penalties for late tax filing?

Accepted Answer

Late filing penalties are: ₦50,000 for the first month, ₦25,000 for each additional month. Late payment incurs interest at the CBN monetary policy rate plus 10% per annum. For VAT, late filing attracts ₦50,000 fine plus ₦25,000 per subsequent month. The total penalties can exceed the original tax owed.

Question 14

How do I file my taxes in Nigeria?

Accepted Answer

File through: 1) FIRS TaxPro Max portal (taxpromax.firs.gov.ng) for federal taxes, 2) Your state's tax website (e.g., LIRS for Lagos), 3) In person at any tax office. You'll complete Form A (Annual Return) showing income, deductions, and tax calculation. Payment is via bank or the Remita platform.

Question 15

Can I amend a tax return I already filed?

Accepted Answer

Yes, you can file an amended return if you discover errors in a previously filed return. Contact your tax authority (FIRS or state IRS) within 12 months of the original filing. If the amendment results in additional tax, you'll need to pay the difference plus interest. If you overpaid, you can claim a refund.

Question 16

Do freelancers pay tax in Nigeria?

Accepted Answer

Yes, freelancers must pay personal income tax on all earnings above ₦800,000. As self-employed individuals, you're responsible for self-assessment and filing. Freelancers pay the same progressive rates as employees (15%-25%). You must file and pay by March 31 each year for the previous year's income.

Question 17

Is foreign income taxable in Nigeria?

Accepted Answer

Yes, Nigerian tax residents are taxed on worldwide income, including earnings from foreign clients. Foreign currency income (USD, GBP, EUR) must be converted to Naira using CBN rates at the time of receipt. This applies to Upwork, Fiverr, remote work, and international freelance contracts.

Question 18

What expenses can freelancers deduct from taxes?

Accepted Answer

Deductible expenses include: equipment (laptop, phone, camera, microphone), software subscriptions, internet and data, home office costs, professional training, marketing and advertising, bank charges, professional services (accountant, lawyer), travel for work, and co-working space fees. Keep all receipts as documentation.

Question 19

Do YouTubers and content creators pay tax in Nigeria?

Accepted Answer

Yes, all creator income is taxable: AdSense revenue, sponsorships, brand deals, affiliate commissions, merchandise sales, and platform earnings (TikTok Creator Fund, etc.). YouTube pays in USD, which must be converted to NGN. Creators can deduct equipment, editing software, and production costs.

Question 20

How is AdSense income taxed in Nigeria?

Accepted Answer

AdSense income from Google is taxed as personal income at standard rates (15%-25% above ₦800,000). Google may withhold up to 24% US tax if you haven't submitted W-8BEN form claiming treaty benefits. Once received in Nigeria, the full amount is subject to Nigerian tax. Convert using CBN rate on receipt date.

Question 21

Can I deduct equipment purchases like cameras and laptops?

Accepted Answer

Yes, work-related equipment is deductible. You can deduct the full cost of items under ₦1,000,000 in the year of purchase. For more expensive items, you may need to depreciate over 3-5 years. Keep purchase receipts and invoices. Personal use items aren't deductible—only business use percentage qualifies.

Question 22

What is the small company tax exemption?

Accepted Answer

Under the Nigeria Tax Act 2025, small companies with annual gross turnover of ₦50 million or less pay 0% Company Income Tax (CIT). This is a significant relief for small businesses. However, you may still owe Development Levy (4% of profit above ₦500,000) and must register for VAT if turnover exceeds thresholds.

Question 23

When must I register for VAT in Nigeria?

Accepted Answer

You must register for VAT if your annual taxable turnover exceeds ₦50 million. Registration is done through FIRS TaxPro Max. Once registered, you must charge 7.5% VAT on sales, file monthly returns by the 21st, and remit the difference between output VAT collected and input VAT paid. Non-compliance attracts penalties.

Question 24

What is the Development Levy?

Accepted Answer

Development Levy is a 4% tax on company profits exceeding ₦500,000, introduced under the Nigeria Tax Act 2025. It applies in addition to Company Income Tax. For small companies paying 0% CIT, you still owe Development Levy if your profit exceeds ₦500,000. It's payable with your annual tax return.

Question 25

What is e-invoicing and who needs it?

Accepted Answer

E-invoicing is Nigeria's mandatory electronic invoicing system for VAT-registered businesses. It requires issuing machine-readable invoices through FIRS-approved systems starting 2024. All VAT-registered businesses must comply. E-invoices automatically report to FIRS, improving transparency and reducing tax evasion.

Question 26

Do I pay tax on business expenses?

Accepted Answer

No, legitimate business expenses reduce your taxable profit. Deductible expenses include rent, salaries, utilities, raw materials, marketing, professional fees, and equipment. Personal expenses are not deductible. Keep proper records and receipts. The key is that expenses must be 'wholly, exclusively, and necessarily' for business purposes.

Question 27

What is PAYE and how does it work?

Accepted Answer

PAYE (Pay As You Earn) is the system for taxing employee salaries. Employers must deduct tax from employee salaries monthly and remit to the relevant State Internal Revenue Service by the 10th of the following month. Rates follow the same progressive brackets (0%-25%). Employers also handle pension (8%) and NHF (2.5%) deductions.

Question 28

What goods and services are exempt from VAT?

Accepted Answer

VAT-exempt items include: basic food items, medical and pharmaceutical products, educational materials and services, baby products, agricultural equipment, exported goods and services, and diplomatic goods. These exemptions aim to reduce the cost burden on essential goods and services for Nigerians.

Question 29

What is the difference between input and output VAT?

Accepted Answer

Output VAT is the 7.5% you charge customers on your sales. Input VAT is the 7.5% you pay on business purchases. You remit the difference: if you collected ₦100,000 output VAT and paid ₦40,000 input VAT, you remit ₦60,000 to FIRS. If input exceeds output, you can carry forward or claim a refund.

Question 30

How often do I file VAT returns?

Accepted Answer

VAT returns are filed monthly, due by the 21st of the month following the transaction period. For example, January sales are reported in a return due February 21. Late filing attracts a ₦50,000 penalty for the first month and ₦25,000 for each subsequent month, plus interest on unpaid VAT.

Question 31

What are the penalties for VAT non-compliance?

Accepted Answer

VAT penalties include: failure to register (₦50,000 first month, ₦25,000 each subsequent month); failure to file returns (same penalties); failure to keep records (₦50,000); failure to issue invoices (50% of invoice value). Interest at CBN rate plus 10% applies to late payments. Serious cases may face prosecution.

Question 32

How do I set up e-invoicing for my business?

Accepted Answer

To implement e-invoicing: 1) Register on FIRS FIRSMBS (Multi-Body Solution) platform, 2) Choose an approved e-invoicing solution or use FIRS's free platform, 3) Configure your invoicing system to generate compliant QR codes and reference numbers, 4) Begin issuing electronic invoices for all VAT-able transactions.

Question 33

How accurate is the KeepAm tax calculator?

Accepted Answer

Our calculator uses the official tax brackets and rates from the Nigeria Tax Act 2025 (effective January 2026). It's been verified by certified Nigerian tax professionals. The calculator accounts for the ₦800,000 threshold, rent relief, pension deductions, and all statutory allowances. For complex situations, we recommend professional review.

Question 34

Is my financial data safe with KeepAm?

Accepted Answer

Absolutely. We use bank-level encryption (AES-256) for all data at rest and in transit. Your data is stored on secure servers with SOC 2 compliance. We never share your information with third parties without consent. You can export or delete your data at any time. We also offer two-factor authentication for added security.

Question 35

What can I do with a free KeepAm account?

Accepted Answer

Free accounts include: unlimited tax calculations, 20 income/expense entries per month, basic deadline reminders, WhatsApp result sharing, and access to all our educational resources. Upgrade to Pro for unlimited entries, PDF reports, receipt uploads, and priority support. Business tier adds team features and multi-business tracking.

Question 36

How does KeepAm help me save on taxes?

Accepted Answer

KeepAm identifies tax-saving opportunities: tracking deductible expenses, calculating rent relief, optimizing pension contributions, and reminding you of filing deadlines to avoid penalties. Our Savings Finder analyzes your data and suggests personalized strategies. Most users discover savings worth more than their subscription cost.

Question 37

Is KeepAm a replacement for an accountant?

Accepted Answer

For most freelancers and small business owners, KeepAm handles day-to-day tracking and calculations. You only need an accountant for complex situations: multiple businesses, large investments, international operations, or audit support. Many accountants recommend KeepAm to clients for record-keeping and actually use our reports for filing.

Question 38

Can I share my tax calculations?

Accepted Answer

Yes! Every calculation can be shared via WhatsApp with a pre-formatted message showing your results. Pro users can generate professional PDF reports for sharing with accountants, investors, or lenders. All shared links are secure and can be set to expire.

Frequently Asked Questions About Nigerian Tax

Browse by Category

General Tax Questions

Tax Rates & Brackets

Filing & Deadlines

Freelancer & Creator Tax

Business Tax

VAT & E-Invoicing

Using KeepAm

All Questions

General Tax Questions

Tax Rates & Brackets

Filing & Deadlines

Freelancer & Creator Tax

Business Tax

VAT & E-Invoicing

Using KeepAm

Still have questions?

Learn more in our guides

Nigerian Tax Calculator & Compliance Platform - KeepAm

Frequently Asked Questions About Nigerian Tax

Browse by Category

General Tax Questions

Tax Rates & Brackets

Filing & Deadlines

Freelancer & Creator Tax

Business Tax

VAT & E-Invoicing

Using KeepAm

All Questions

General Tax Questions

What are the Nigerian tax rates for 2026?

How much can I earn tax-free in Nigeria?

When is the tax filing deadline in Nigeria?

How do I get a TIN (Tax Identification Number) in Nigeria?

Do I need to file taxes if I earn below ₦800,000?

Tax Rates & Brackets

How do progressive tax brackets work?

What is the difference between marginal and effective tax rates?

Are company tax rates different from personal income tax?

What is the VAT rate in Nigeria?

What is Capital Gains Tax in Nigeria?

Filing & Deadlines

What documents do I need to file taxes in Nigeria?

What happens if I don't file taxes in Nigeria?

What are the penalties for late tax filing?

How do I file my taxes in Nigeria?

Can I amend a tax return I already filed?

Freelancer & Creator Tax

Do freelancers pay tax in Nigeria?

Is foreign income taxable in Nigeria?

What expenses can freelancers deduct from taxes?

Do YouTubers and content creators pay tax in Nigeria?

How is AdSense income taxed in Nigeria?

Can I deduct equipment purchases like cameras and laptops?

Business Tax

What is the small company tax exemption?

When must I register for VAT in Nigeria?

What is the Development Levy?

What is e-invoicing and who needs it?

Do I pay tax on business expenses?

What is PAYE and how does it work?

VAT & E-Invoicing

What goods and services are exempt from VAT?

What is the difference between input and output VAT?

How often do I file VAT returns?

What are the penalties for VAT non-compliance?

How do I set up e-invoicing for my business?

Using KeepAm

How accurate is the KeepAm tax calculator?

Is my financial data safe with KeepAm?

What can I do with a free KeepAm account?

How does KeepAm help me save on taxes?

Is KeepAm a replacement for an accountant?

Can I share my tax calculations?

Still have questions?

Learn more in our guides