Nigeria Tax Law 2026 Glossary

Tax charged on the income of individuals, partnerships, and communities. In Nigeria, this is governed by the Personal Income Tax Act (PITA) and includes PAYE (Pay As You Earn) deductions.

A system of income tax collection where employers deduct tax from employees' salaries or wages at the point of payment. The deducted amount is remitted to the Federal Inland Revenue Service (FIRS) on behalf of the employee.

A tax-free amount that individuals can earn before income tax is applied. For the 2026 tax year, the personal allowance is ₦200,000 per annum.

Reductions in taxable income granted to taxpayers for specific expenses or circumstances. Common reliefs include pension contributions, National Housing Fund (NHF), and life insurance premiums.

A mandatory contribution scheme where employees contribute 2.5% of their monthly basic salary to the National Housing Fund. This contribution is tax-deductible.

Progressive tax rate structure where different income ranges are taxed at different rates. For 2026: First ₦300,000 at 7%, Next ₦300,000 at 11%, Next ₦500,000 at 15%, Next ₦500,000 at 19%, Next ₦1,600,000 at 21%, Above ₦3,200,000 at 24%.

The portion of an individual's income that is subject to taxation after deducting all allowable expenses, reliefs, and personal allowance.

Total income earned by an individual before any deductions, allowances, or taxes are applied. This includes salary, bonuses, allowances, and other emoluments.

The government agency responsible for assessing, collecting, and accounting for all types of taxes in Nigeria, including personal income tax and PAYE.

A certificate issued by FIRS confirming that a taxpayer has fulfilled all tax obligations for a specified period. Required for various transactions including government contracts and travel.