In the coffee shops of Abuja and co-working spaces of Lagos, a new gospel is spreading. It speaks not of salvation, but of taxation. The Nigerian government, grappling with dwindling oil revenues and a desperate need for cash, is preparing a fiscal revolution set to kick in on January 1, 2026. The sermon, delivered with unnerving clarity by its chief evangelist, Taiwo Oyedele, is simple: everyone who earns must pay.

For Nigeria’s tech ecosystem, this new creed is causing a crisis of faith.

Oyedele, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has been on a mission to enlighten — or perhaps forewarn — the populace. His message leaves little room for interpretation.

“If you are a remote worker, you are a worker,” Oyedele stated at a recent event, erasing any ambiguity for those earning dollars from a European or American company while living in Nigeria. “The obligation falls on you to self-declare… If you now refuse to declare, the government will see the movement of the money, and they will deem it as your income, charge you tax on it, add a penalty, and interest for the late payment.”

This divine oversight extends to everyone. Social media influencers, diasporans with rental income, and even sex workers have been told to prepare their tithes. The government’s logic is refreshingly straightforward: if money enters your account, it’s income, and a portion of it belongs to Caesar.

The New Commandments: What the 2026 Tax Law Says

Signed into law in June 2025, the new reforms aim to drag Nigeria’s tax-to-GDP ratio from a paltry sub-10% to an ambitious 18% within three years. The commandments are written in the language of progressive taxation, designed, in theory, to spare the poor and tax the prosperous.

• Personal Income Tax (PIT): A new tax-free annual income threshold of ₦800,000 has been introduced. Earnings between ₦800,001 and ₦3,000,000 will be taxed at 15%, with higher bands reaching up to 25%. For a mid-level software developer earning ₦6m a year, the new tax bill will be a significant and unavoidable ₦930,000.
• Capital & Digital Gains: Crypto traders and startup investors can no longer look the other way. The new law mandates that net gains from digital assets and capital market sales are taxable. In a gesture of goodwill, the law allows for the offsetting of losses against gains. However, for those with a net gain of more than ₦10m from asset sales in a year, the taxman will be waiting.
• Diasporan Duty: For Nigerians living abroad, the rules are based on physical presence. Spend more than 183 days a year in Nigeria, and you are considered a tax resident, liable to pay tax on your global income. To avoid a double whammy, the government graciously offers a tax credit for taxes already paid in another country.

The Pincer Movement: Enter Withholding Tax

A separate, more immediate mechanism is already causing confusion. Quietly unveiled in an October 2024 gazette, the Deduction of Tax at Source (Withholding) Regulations, 2024, requires businesses to deduct tax at the point of payment and remit it to the government.

This Withholding Tax (WHT) is an advance payment on a person’s final annual tax bill. In theory, it’s not a double tax. In practice, it creates it could be. 

Consider a Nigerian freelancer earning $5,000 from a US client through a local payment platform. Under the new WHT rules, the platform might be obligated to withhold, say, 10% ($500) before the money even hits the freelancer’s account. At year-end, that same freelancer must also declare the full $5,000 as income and pay Personal Income Tax on it. While the $500 WHT is supposed to be creditable against the final tax bill, the burden of proving it, claiming it, and navigating the bureaucracy falls squarely on the individual. It’s a system that, for the taxpayer, feels exactly like being taxed twice.

This sense of anxiety is now compounded by aggressive enforcement. Nigeria’s tax authorities are increasingly using “Best of Judgement” (BOJ) assessments — a tactic where, lacking clear data, they essentially guess a taxpayer’s liability based on their perceived lifestyle.

We’ve already seen this lead to public clashes. Tayo Oviosu, founder of fintech giant Paga, recently protested a personal income tax bill that he said was greater than his entire year’s earnings. His experience underscores a troubling shift: tax assessments appear less grounded in filed accounts and more in a superficial check of a founder’s apparent wealth.

Ultimately, this strategy strong-arms founders and tech workers into a corner: to dispute an inflated bill, they must open their private books, despite already having taxes deducted at source.

Mr. Oyedele’s recent comment inadvertently revealed the government’s seemingly ominous motive: “If you refuse to declare, the government will track the movement of the money, consider it as your income, and impose tax on it, along with penalties and interest for late payment.”

An Ecosystem Under Pressure

This aggressive fiscal push is happening against the backdrop of a catastrophic economic crisis. President Bola Tinubu’s administration has pursued painful reforms, including floating the naira. The currency’s subsequent freefall, coupled with inflation soaring past 30%, has created a toxic cocktail for businesses.

International giants like Microsoft, Unilever, and Procter & Gamble have either exited or significantly scaled back their Nigerian operations. For the tech ecosystem, once the darling of the continent, the impact has been devastating.

According to data from Launch Base Africa, Nigerian startups raised just $156.6m in the first half of 2025, a staggering drop from the $1.2bn raised in the full year of 2022. The country has fallen to fourth place on the continent for VC funding, behind South Africa ($349.7m), Egypt, and Kenya.

The Bottom Line

The Nigerian government is in an unenviable position, forced to find revenue wherever it can. It sees a globally-connected, dollar-earning tech sector and, understandably, wants it to contribute its fair share.

However, the timing and execution are fraught with risk. The tech ecosystem is already reeling from an economic crisis that has decimated its customer base and scared off investors. Slapping it with a complex, two-pronged tax assault could be the final straw for many. Founders and skilled tech workers are globally mobile; if the cost and complexity of doing business in Nigeria become too high, they will leave.

As 2026 approaches, the government’s fiscal gospel is clear, but its methods are causing alarm. The question is whether this drive to tax every naira will build a more sustainable state or simply chase away the very people creating its future economy. For now, many are bracing for a judgement day where the only thing that matters is what’s in the collection plate.