Nigerian freelancers: you now have to file a tax return.

Most of us have never filed a tax return. Until recently there wasn't much reason to think about it — no employer deducting anything, no letters arriving, nothing forcing the issue.

That changed on 1 January 2026, when the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 came into force. I've read both properly, and a lot of what's circulating online is still based on the earlier draft — with numbers that didn't survive into the
final version. So here's the plain version.

1. Your foreign income is taxable here.
   If you live in Nigeria, you're taxed on your worldwide income. It doesn't matter that the client is in Berlin, that Upwork is American, or that the money sat in a dollar wallet for six months. Working remotely from Lagos for a US client isn't "foreign income" in the way people hope — you did the work here.
2. The platforms do not pay your tax for you.
   This is the assumption that costs people the most. Upwork, Fiverr, Payoneer — none of them remit anything to Nigeria on your behalf. Some withhold US tax in some situations; that's a different country's tax, and it doesn't settle yours. And paying VAT on things you buy doesn't cover it either. VAT is a tax on spending. This is a tax on earning. Two different things.
3. You're taxed on profit, not on everything that landed
   Subtract what it cost you to earn it: internet and data, software you need for the work, the business share of your laptop, platform fees, payment charges, co-working space. The platform fee catches people out. If a client pays $1,000 and Upwork keeps $100, you earned $900 — not $1,000. Declaring the gross means paying tax on money you never received. Keep the receipts. Under the new law a deduction you can't document can be disallowed, which means it gets added back.
4. The rates
   - First ₦800,000 — 0%
   - Next ₦2,200,000 — 15%
   - Next ₦9,000,000 — 18%
   - Next ₦13,000,000 — 21%
   - Next ₦25,000,000 — 23%
   - Above ₦50,000,000 — 25%

   It's banded. Only the slice inside each band is taxed at that band's rate — so moving up a band never leaves you worse off overall. Plenty of part-time freelancers are under ₦800,000 taxable and owe nothing at all.

5. The Consolidated Relief Allowance is gone
   If you've read about CRA — the "higher of ₦200,000 or 1% of gross, plus 20% of gross" formula — it was abolished by the new Act. Any calculator or guide still applying it is working from the old law and will show you a number that's too low. That's the wrong direction to be wrong in.
   What replaced it as the main personal relief is rent relief: 20% of your annual rent, capped at ₦500,000. You need proof of payment, and it doesn't apply if you own your home and pay no rent. Most people don't claim it because nobody tells them it exists.
6. Which exchange rate — the question everyone asks
   Naira, at the official rate, on the day you were paid. Not the parallel rate. Not today's rate. And not one average for the whole year — convert each payment separately, using the rate for the date that payment landed. Twelve payments in a volatile year are twelve different conversions. Collapsing them into one number is a guess dressed up as a figure, and it won't match anything if you're ever asked to show your working.
   Keep, for each payment: the date, the amount in the original currency, the rate you used, and where you got it. The Acts don't spell out a conversion method — so what protects you isn't citing a rule, it's being able to show how you got there.
7. Get a Tax ID — there's a direct cost to not having one
   Registration is required of every taxable person. But the practical reason is money. When a Nigerian company pays you for professional or consultancy work, it has to withhold a slice and remit it. With a Tax ID that's 5%. Without one, the payer must deduct at double — 10%.
   On a ₦500,000 invoice that's ₦25,000 versus ₦50,000. Withholding isn't a penalty in itself — it's an advance against tax you'd owe anyway, and you claim it back when you file. But it leaves your account at double the rate, and the only route to getting it back is filing a return, which needs the Tax ID you skipped.
   Worth knowing too: the Act requires banks and other financial-services providers to make a Tax ID a condition for opening an account and for operating an existing one. How fast each bank actually enforces that is a separate question I can't answer — but the direction isn't ambiguous.
8. Where it goes, and when
   Personal income tax is administered by your State Internal Revenue Service — based on where you live, not where your clients are. Not the federal body, unless you're running a registered company with its own obligations. Returns are annual, due 31 March for the year before. So income earned in 2026 is filed by 31 March 2027.
9. Even if you owe nothing, you file
   The Act requires a return from every taxable person "whether or not liable to pay tax". If your answer is zero, you file a nil return saying so. it feels pointless the first time. It isn't — it puts your year on record. Without one there's no filed position for that year, just an absence, and an absence is what gets asked about later.
10. VAT — probably not your problem
    A business under ₦50 million in annual turnover is exempt from charging and filing VAT. Watch that number. A lot of what's online still says ₦100 million — that figure came from an earlier draft, before the final version lowered it. If a source quotes ₦100 million, it's working from the bill rather than the law.

The honest summary