If you’re a Nigerian freelancer or remote worker, 2026 is bringing a major shift in how you’ll be taxed. In June 2025, President Bola Tinubu signed four significant tax reform bills into law. The most comprehensive update to Nigeria’s tax system in decades. And for the first time, the government is directly targeting digital workers, remote employees, and freelancers who earn income from international clients.

This isn’t optional. This isn’t a maybe. Starting January 1, 2026, if you’re earning money as a freelancer in Nigeria, you’re expected to register, file, and pay taxes, or face serious penalties.

In this guide, I’m breaking down everything you need to know: who has to pay, how much, what you can deduct, how to avoid double taxation, and most importantly, how to stay compliant without losing your mind, or your money.

Let’s get into it.

Table of Contents

1. What Changed? The 4 New Tax Bills Explained
2. Who Is Considered a Tax Resident in Nigeria?
3. The Tax Brackets: What You’ll Actually Pay
4. What You Must Do to Stay Compliant
5. Business Expenses You Can Deduct
6. How to Avoid Double Taxation
7. Penalties for Non-Compliance (They’re Serious)
8. Step by Step: How to File Your Taxes as a Freelancer
9. Common Questions Answered
10. My Final Thoughts

1. What Changed? The 4 New Tax Bills Explained

Nigeria’s tax system has historically focused on formal employees through PAYE (Pay As You Earn), where employers automatically deduct taxes from monthly salaries. But with the explosion of the digital economy and thousands of Nigerians now earning from platforms like Upwork, Fiverr, Toptal, and direct international clients, the government decided it was time to bring everyone into the system.

In June 2025, four major bills were signed into law:

The Nigeria Tax Act (NTA)

This consolidates over 50 separate tax laws into one unified code. Instead of navigating multiple confusing documents, there’s now one main tax law that covers everything. From personal income tax to corporate tax to VAT.

The Tax Administration Act

This standardizes how taxes are collected across federal, state, and local governments. Previously, different states had different processes. Now there’s one system.

The Nigeria Revenue Service (NRS) Act

This replaces the Federal Inland Revenue Service (FIRS) with a new, more independent body focused on efficiency, transparency, and digital enforcement. The NRS is equipped with better technology to track digital transactions, which means they can see your Payoneer withdrawals, your Paystack transfers, your Wise payments, all of it.

The Joint Revenue Board Act

This establishes better coordination between tax authorities and introduces dispute resolution mechanisms, including a Tax Appeal Tribunal and Tax Ombudsman for people who want to challenge tax assessments.

The government has created a clearer, more enforceable tax structure and they now have the tools to track digital income in ways they couldn’t before.

2. Who Is Considered a Tax Resident in Nigeria?

This is critical because your residency status determines whether you owe taxes to Nigeria or not.

According to the Nigeria Tax Act, you are considered a Nigerian tax resident if any of the following apply:

• You are domiciled in Nigeria (meaning Nigeria is your permanent home)
• You have a permanent place of residence in Nigeria
• You have substantial economic and family ties in Nigeria
• You spend 183 days or more in Nigeria within a 12-month period

That last one is key. If you’re physically in Nigeria for more than half the year, you’re automatically a tax resident, even if your clients are in the US, UK, Canada, or anywhere else.

3. The Tax Brackets: What You’ll Actually Pay

Let’s talk numbers.

The new law introduces a ₦800,000 annual tax-free threshold. This means if you earn ₦800,000 or less per year (after deductions), you don’t pay personal income tax.

For everyone earning above ₦800,000, here’s how the progressive tax system works:

Annual Income Range	Tax Rate
First ₦800,000	0%
Next ₦2.2 million (₦800k – ₦3M)	15%
Next ₦9 million (₦3M – ₦12M)	18%
Next ₦13 million (₦12M – ₦25M)	21%
Next ₦25 million (₦25M – ₦50M)	23%
Above ₦50 million	25%

Example Calculation

Let’s say you earn ₦5 million annually as a freelancer.

Step 1: Calculate gross income ₦5,000,000

Step 2: Subtract allowable deductions (we’ll cover this in detail below) Let’s assume ₦1,000,000 in legitimate business expenses (internet, electricity, software, rent portion, etc.)

Taxable income: ₦5,000,000 – ₦1,000,000 = ₦4,000,000

Step 3: Apply tax brackets

• First ₦800,000 = ₦0 (tax-free)
• Next ₦2.2M (from ₦800k to ₦3M) = ₦2.2M × 15% = ₦330,000
• Remaining ₦1M (from ₦3M to ₦4M) = ₦1M × 18% = ₦180,000

Total tax due: ₦510,000

That’s roughly 10.2% of your gross income, or 12.75% of your taxable income after deductions. It is very easy to track your taxes in one place, I personally use the freelance planner. At the end of the year, all I have to do is take the information i have in there and file.

Is this fair? Compared to some countries, yes. Compared to the quality of services we get in Nigeria? That’s debatable. But it’s what we’re working with.

4. What You Must Do to Stay Compliant

The law is clear, even if you’re exempt from paying tax, you still must file annual returns. Here’s what you need to do:

Step 1: Register with the Tax Authority

You need a Tax Identification Number (TIN). You can register with either:

• Your State Internal Revenue Service (SIRS) if you’re earning locally or as an individual
• The Federal Inland Revenue Service (FIRS) / new Nigeria Revenue Service (NRS) if your income is from federal sources

How to register:

1. Visit your state’s tax office website or the FIRS portal
2. Provide your BVN, valid ID, and proof of address
3. Fill out the registration form
4. Receive your TIN

Deadline: Do this right now, today, to avoid penalties when the law takes effect.

Step 2: Track All Your Income

From January 1, 2026, you need to keep detailed records of:

• Every payment received from clients (invoices, payment confirmations)
• Currency conversions (the law requires you to declare foreign earnings in Naira using the official CBN exchange rate)
• Withholding tax certificates (if clients deducted tax at source)

Tools that can help:

• Accounting software (Wave, QuickBooks, Zoho Books)
• Spreadsheets (if you’re on a budget)
• Your payment platform’s transaction history (Payoneer, Wise, Paystack, etc.)

Step 3: File Annual Returns by March 31

At the end of each tax year, you must file a self-assessment return declaring:

• Your total income for the year
• All deductions and reliefs claimed
• Your calculated tax liability
• Proof of payment (if tax is owed)

The return must be filed on or before March 31 of the year following the tax year.

For example:

• Tax year: January 1, 2026 – December 31, 2026
• Filing deadline: March 31, 2027

Step 4: Pay Your Tax

Once you’ve calculated your liability (or had a tax professional do it), you pay through approved government channels. Your state tax authority or the NRS will provide payment options. Usually online portals, designated bank accounts, or payment platforms.

Step 5: Keep Records

Store all receipts, invoices, bank statements, and tax filings for at least 6 years. In case of an audit, you’ll need to prove everything.

5. Business Expenses You Can Deduct

Here’s where freelancers have an advantage over salaried employees: you can deduct legitimate business expenses to reduce your taxable income.

According to Taiwo Oyedele:

“People who are not in paid employment have the opportunity for more deductions if they can demonstrate it is for their business.”

What You Can Deduct

Internet and Data Costs If you work online, your internet bills and data subscriptions are fully deductible. Keep your receipts.

Electricity Bills / Generator Fuel Power is essential for remote work. You can deduct a portion of your electricity costs or generator fuel expenses. Be reasonable, don’t try to deduct 100% if you’re working from home and also using power for personal use. A 50-70% allocation for business use is justifiable.

Software and Tools Adobe Creative Cloud, Grammarly, Notion, Slack, Zoom, Canva Pro, project management tools, any software you pay for to deliver your services is deductible.

Equipment Laptops, monitors, microphones, cameras, drawing tablets, etc. If you buy equipment for work, you can deduct it. For high-value items, you may need to depreciate them over time rather than deduct the full amount in one year.

Rent (Partial) If you work from home, you can deduct 20% of your annual rent or ₦500,000, whichever is lower.

For example:

• If your annual rent is ₦1,200,000, you can deduct ₦240,000 (20%)
• If your annual rent is ₦3,000,000, you can only deduct ₦500,000 (the cap)

Marketing and Advertising Money spent on Facebook ads, Google ads, sponsored posts, business cards, website hosting, domain names, all deductible.

Professional Development Courses, certifications, books, workshops, conferences related to your freelancing work can be deducted.

Travel (Work-Related) If you travel to meet clients or attend work events, transportation and accommodation costs are deductible. Keep receipts and document the business purpose.

For Content Creators: Wardrobe and Makeup If you’re a video creator, YouTuber, or presenter and your appearance is part of your work, you can deduct wardrobe and makeup expenses. This is explicitly mentioned in the law.

The 2026 freelance execution planner makes it so easy to track all these expenses. You literally have the templates set up for you. You can get yours here to start tracking your finances today,

What You cannot Deduct

• Personal expenses (groceries, entertainment that’s not client related)
• Fines and penalties
• Political donations
• Personal gifts

Pro tip: When in doubt, ask yourself: “Is this expense necessary for me to generate income?” If yes, it’s likely deductible. If no, thne it doesnt count.

6. How to Avoid Double Taxation

One of the biggest concerns for Nigerian freelancers is double taxation, being taxed both in Nigeria and in the country where your client is based.

Here’s how the law addresses this:

Double Taxation Treaties (DTTs)

Nigeria has signed Double Taxation Treaties with 15 countries:

• Belgium
• Canada
• China
• Czech Republic
• France
• Netherlands
• Pakistan
• Philippines
• Romania
• Singapore
• Slovakia
• South Africa
• Spain
• Sweden
• United Kingdom

How DTTs work: If you earn income from a client in any of these countries, typically:

1. The source country (where the client is) has the first right to tax
2. Nigeria then grants you a tax credit for the tax you already paid abroad
3. You don’t pay the full tax twice, you only pay the difference if Nigeria’s rate is higher

Example:

• You earn £10,000 from a UK client
• UK taxes you at 20% = £2,000
• You convert the income to Naira and calculate your Nigerian tax
• If Nigerian tax on that income is ₦equivalent of £2,500, you only pay the ₦equivalent of £500 to Nigeria (the difference)
• If Nigerian tax is lower, you don’t owe Nigeria anything additional on that income

What About Countries Without DTTs? (Like the US)

For countries that don’t have a treaty with Nigeria, such as the United States, the law introduces a unilateral tax credit.

How it works:

• You earn income from a US client
• The US taxes you on that income
• You keep proof of payment (tax return, withholding certificate, etc.)
• When filing in Nigeria, you present that proof
• Nigeria grants you a tax credit for what you paid abroad
• You only pay the difference to Nigeria

The challenge: This requires documentation. If you can’t prove you paid tax in the other country, Nigeria may tax you in full. So keep meticulous records.

7. Penalties for Non-Compliance 

The government isn’t playing around with enforcement. The penalties for non-compliance are steep:

Failure to Register for Tax

Penalty: ₦50,000 for the first month + ₦25,000 for each subsequent month you remain unregistered.

If you wait 6 months to register, you’re looking at ₦50,000 + (5 × ₦25,000) = ₦175,000 in fines before you’ve even filed anything.

Failure to File Annual Returns

Penalty: ₦100,000 for the first month + ₦50,000 for each subsequent month.

Miss the March 31 deadline by 4 months? That’s ₦100,000 + (3 × ₦50,000) = ₦250,000.

Filing Incomplete or Inaccurate Returns

Penalty: Same as above. ₦100,000 for the first month + ₦50,000 monthly.

The government can also audit you, and if they find you deliberately underreported income, additional penalties and interest apply.

Companies Hiring Unregistered Freelancers

If you’re hired by a Nigerian company and you don’t have a TIN, that company faces a ₦5,000,000 fine.

This means companies will start demanding proof of tax registration before contracting with freelancers. No TIN = no contract.

Bottom line: The days of flying under the radar are over. Compliance is no longer optional.

8. Step-by-Step: How to File Your Taxes as a Freelancer

Let me walk you through the actual filing process so you know what to expect:

Before the Tax Year Begins (Now)

1. Register for your TIN (as explained in Section 4)

2. Set up your record-keeping system

• Create a spreadsheet or use accounting software
• Track every payment received
• Track every business expense
• Save all receipts digitally

3. Open a separate savings account for taxes

• Every time you get paid, immediately transfer 15-25% to this account
• Don’t touch it until tax time
• This prevents the shock of a large tax bill with no money to pay it

During the Tax Year (Jan 1 – Dec 31, 2026)

4. Quarterly check-ins

• Every 3 months, calculate your estimated tax liability based on income so far
• Adjust your savings rate if needed
• This keeps you on track and avoids surprises

You can easily track these in the 2026 freelancer execution planner.

5. Request Withholding Tax Certificates

• If any client (especially Nigerian companies) deducted tax at source, get a certificate
• You’ll use this to offset your liability when filing

End of Tax Year / Filing Season (Jan – March 2027)

6. Gather all documentation

• Total income for the year (in Naira)
• Total deductible expenses (with receipts)
• Withholding tax certificates (if any)
• Proof of foreign tax paid (if applicable)

7. Calculate your taxable income

• Gross income – Deductions = Taxable income

8. Apply the tax brackets (as shown in Section 3)

9. Subtract any credits

• Withholding tax already paid
• Foreign tax credits

10. File your self-assessment return

• Visit your state tax authority’s portal or the NRS portal
• Fill out the return form online
• Upload supporting documents
• Submit before March 31

11. Pay any outstanding tax

• If you owe tax after credits, pay through the designated channels
• Keep proof of payment

12. Store everything

• Keep copies of your filed returns, receipts, and payment confirmations for at least 6 years

Should You Hire a Tax Professional?

Yes, if:

• You earn over ₦5 million annually
• You have clients in multiple countries
• You’re claiming complex deductions
• You want peace of mind

Maybe not if:

• Your income is straightforward (one or two clients, simple expenses)
• You’re comfortable with numbers and record-keeping
• You’re earning under ₦2 million

A good tax consultant costs ₦50,000 – ₦200,000 depending on complexity. For most mid to high earning freelancers, it’s worth it to avoid mistakes.

9. Common Questions Answered

Q: I earn in USD/GBP/EUR. How do I convert to Naira for tax purposes?

A: You must use the official Central Bank of Nigeria (CBN) exchange rate on the date you received the payment, not the black market rate, not the rate your platform gave you. The CBN publishes daily rates on their website.

Q: What if my income varies wildly month to month?

A: That’s normal for freelancers. Your tax is calculated on your total annual income, not monthly. So it doesn’t matter if you made ₦1M in January and ₦100k in February, what matters is your total for the year.

Q: Can I deduct losses from a previous year?

A: The law allows for loss carry forward in some cases, but the rules are complex. Consult a tax professional if you had a loss making year.

Q: What if I have multiple income streams (freelancing + a side business + investments)?

A: You declare all of it. Your tax return covers your worldwide income from all sources. Freelancing, business, investments, rental income, everything.

Q: Do I pay VAT as a freelancer?

A: Generally, no. VAT applies to businesses with annual turnover above ₦25 million. Most solo freelancers fall below this. However, if you register a company and exceed that threshold, VAT becomes relevant.

Q: What if I can’t afford to pay my tax bill?

A: The law allows for payment plans in some cases. Contact your tax authority immediately, don’t just ignore it. Penalties and interest will only make it worse.

Q: I’m planning to leave Nigeria permanently. Do I still owe tax?

A: Once you’re no longer a resident (under 183 days in Nigeria, no permanent home here), you’re only taxed on Nigerian-source income. But you must formally change your residency status with the tax authorities.

10. My Final Thoughts

Look, I’m not going to sugarcoat this, paying taxes in Nigeria feels frustrating when you look at the state of our infrastructure, healthcare, education, and public services.

As freelancers, many of us have built our careers despite the system, not because of it. We pay for our own internet. We buy generators because AEDC is a joke. We invest in private healthcare. We avoid public schools. And now the government wants a cut of our income?

I get the anger. I feel it too.

But here’s the reality: this law is happening whether we like it or not.

The government has the technology to track our income. Platforms like Payoneer, Wise, and Paystack are all linked to BVNs. Banks report large transactions. The days of operating invisibly are over.

So we have two choices:

1. Ignore it and face penalties (not recommended)
2. Get smart about it and minimize our liability legally

I’m choosing option 2.

That means:

• Understanding the law thoroughly
• Claiming every legitimate deduction
• Keeping meticulous records
• Filing on time
• And yes, paying what I legally owe

Does it suck? Yes. Is it fair given what we get in return? Debatable. But is it avoidable? No.

What I’m Doing Personally

For transparency, here’s my plan:

1. I registered for my TIN in 2019 (i’ve had it since)
2. I’m working with a tax consultant to ensure I’m claiming all eligible deductions
3. I’m setting aside 20% of every payment I receive into a separate tax savings account
4. I’m keeping every receipt and tracking every expense in the 2026 freelance execution planner.
5. I’ll file my return in February 2027 (early, to avoid the March rush)

I’m not happy about it. But I’m prepared.

Resources

Official Government Portals:

• Federal Inland Revenue Service (FIRS)
• Nigeria Tax Act 2025 (Full Text)
• Lagos State Internal Revenue Service: https://lirs.gov.ng
• Abuja Internal Revenue Service: https://fctirs.gov.ng/ 

Tax Calculators:

• FIRS Tax Calculator (check their website for 2026 updates)

Recommended Tax Consultants:

• PwC Nigeria
• KPMG Nigeria
• Deloitte Nigeria
• Or search for “tax consultant near me” and verify their credentials

Exchange Rate:

• CBN Official Exchange Rate

Final Checklist: What to Do Right Now

☐ Register for your TIN today
☐ Set up a record keeping system (spreadsheet or the 2026 freelance planner)
☐ Open a separate savings account for taxes
☐ Start tracking all income and expenses
☐ Save all receipts digitally
☐ Research tax consultants if your income is complex
☐ Set a reminder for March 1, 2027 to start your tax return
☐ Share this guide with other freelancers who need it

Have questions? Drop them in the comments below or DM me. Let’s navigate this together.

And if you found this helpful, share it with every Nigerian freelancer you know. Knowledge is power, especially when it comes to protecting your money.

Disclaimer: I’m not a tax professional or lawyer. This guide is based on my research and understanding of the Nigeria Tax Act 2025. For specific advice related to your situation, consult a qualified tax consultant.