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New Tax Reforms in Nigeria for 2026: What the Nigerian Diaspora Need to Know
Overview

The Nigerian Tax Reforms, scheduled to begin in January 2026, represent the most comprehensive overhaul of the tax system since 1999, focusing on streamlining tax rates, expanding reliefs, and harmonizing fragmented tax laws. For members of the Nigerian diaspora, these changes bring significant clarifications regarding remittances, foreign-earned income, and investment, aiming to protect genuine support inflows and encourage engagement in national development.

The reforms introduce progressive tax rates, expand reliefs for low-income earners, and clarifies what is and isn’t taxable for Nigerians in the Diaspora.

Start Date

January 1, 2026

Critical Factors

183 day rule

Determines if all your income is taxed in Nigeria or not

The Big Picture: What’s Changing?

Starting January 2026, Nigeria is consolidating over a dozen fragmented tax laws into a streamlined system designed for transparency, fairness, and ease of compliance. The reforms introduce progressive tax rates, expand reliefs for low-income earners, and most importantly clarify for the diaspora what is and isn’t taxable .

Key changes for individuals include:

Zero tax for annual incomes up to ₦800,000

Progressive rates from 15% to 25% based on income brackets

New rent relief capped at ₦500,000 or 20% of annual rent

Raised exemption for job loss compensation from ₦10M to ₦50M

Clear guidelines protecting genuine remittances from taxation

2026 Nigerian Tax Reform: Progressive Tax Rates by Income Bracket

The reforms roll out in phases throughout 2026, giving everyone time to understand and prepare.

1. The Good News: Your Foreign Income is Safe and NOT taxed.

The most important takeaway for non-resident Nigerians is this: The new tax laws do not tax your foreign earned income or remittances.

The core principle of the reform is that Tax Residency, not citizenship, determines your tax obligation in Nigeria. Taiwo Oyedele, Chairman of the PFPTRC, has repeatedly confirmed this: “Income earned abroad and brought into Nigeria by a non-resident individual is now specifically exempted from tax in Nigeria, regardless of the source or nature of the income. Diaspora remittances or investments are not subject to these new taxes.”

This explicit exemption removes a major source of ambiguity and is a significant win for diaspora confidence and investment.

What does get taxed? Income derived from Nigerian sources are taxed, such as business profits, rental income from properties you own, or returns on investments that you have in Nigeria. But even here, Double Taxation Agreements (DTAs) with most major countries protect you from being taxed twice on the same income.

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2. The Critical Factor: The 183-Day Rule

While your foreign income is exempt, your status as a Non-Resident Individual (NRI) is not automatic. It is determined by the 183-Day Rule.

Under the new law, you are considered a Nigerian Tax Resident (TRI) if you are physically present in Nigeria for 183 days or more (in aggregate) within any 12-month period. Crucially, this period includes all days of leave and temporary absence.

If you are present in Nigeria for 183 days or more, you are classified as a Tax Resident and become liable to pay tax, in Nigeria, on your Worldwide Income.

If you are present in Nigeria for less than 183 days, you are considered a Non-Resident Individual (NRI) and are not liable to pay tax on your Worldwide Income.

Who Needs to Pay Attention?

While people sending remittances can breathe easy, three diaspora profiles should pay closer attention:

Diaspora Investors: If you own properties, stocks, or businesses in Nigeria generating income, you’ll need to report and pay taxes on those earnings according to the new progressive rates. The good news? Double Taxation Agreements (DTAs) mean if you’ve already paid tax abroad, you can get relief.

Remote Workers: If you work remotely for international companies but your work is managed from Nigeria, you may be reclassified for tax purposes. Documentation becomes crucial here. So you should keep clear records of your employment status and income sources.

Property Owners: Real estate investments remain attractive, but you’ll need to disclose properties and pay capital gains tax when applicable. The new guidelines aim to make this process more transparent and straightforward

Reporting Requirements

Self-reporting is required for all individuals; guidelines will clarify taxable versus non-taxable inflows.

Property owners must disclose real estate and capital gains for taxation at progressive rates.

Remote workers who operate businesses abroad but are managed from Nigeria may be reclassified as Nigerian entities for tax purposes.

Who Needs to Pay Attention?

While people only sending remittances can breathe easy, three diaspora profiles should pay closer attention:

Diaspora Investors: If you own properties, stocks, or businesses in Nigeria generating income, you’ll need to report and pay taxes on those earnings according to the new progressive rates. The good news? DTAs mean if you’ve already paid tax abroad, you can get relief.

Remote Workers: If you work remotely for international companies but your work is managed from Nigeria, you may be reclassified for tax purposes. Documentation becomes crucial. So you should keep clear records of your employment status and income sources.

Property Owners: Real estate investments remain attractive, but you’ll need to disclose properties and pay capital gains tax when applicable. The new guidelines aim to make this process more transparent and straightforward.

Practical Steps for Compliance and Protection

To remain compliant and protect your financial interests under the new regime, follow these steps:

Assess Your Situation

Determine if you have Nigerian-sourced income. If you’re only sending money home to family, you’re in the clear. If you own businesses or properties generating income, you should pay more attention to the new rules.

Track Your Travel Meticulously

Action: Keep a meticulous record of all entry and exit dates to Nigeria.

Why: This is your primary defense against being mistakenly classified as a Tax Resident. If your total stay approaches the 183-day limit, consult a tax professional immediately.

Document Your Funds Clearly

Action: Maintain separate bank accounts for foreign and Nigerian income. When remitting funds, clearly label the purpose (e.g., “Family Support,” “Investment Capital”).

Why: Clear documentation proves the source of your funds, supporting your claim for exemption as an NRI.

Verify Withholding Tax (WHT) Credit:

Ensure that companies paying dividends or interest in Nigeria provide proper documentation for the WHT they deduct, as this may count as your final tax.

Leverage Double Taxation Agreements (DTAs)

Nigeria has DTAs with over a dozen countries, including Canada, China, France, the Netherlands, South Africa, and Spain.

If you have Nigerian-sourced income (e.g., rental income), a DTA allows you to claim a tax credit in your country of residence for the tax paid in Nigeria, preventing the same income from being taxed twice.

Consult the Right Experts

Seek advice from an international tax specialist familiar with both Nigerian tax law and the laws of your country of residence.

Register and Stay Informed

Nigerian-Sourced Income: If you derive income from Nigeria, you must register for a Tax Identification Number (TIN) and ensure all withholding taxes are properly remitted.

Digital Platforms: Monitor the official website of the PFPTRC (fiscalreforms.ng) and the Federal Inland Revenue Service (FIRS) for official circulars and digital compliance tools

Join diaspora-focused forums, subscribe to newsletters and updates from Diaspora focused organizations like NGEX, attend webinars and listen to podcasts that explain the tax reforms

Nigeria’s 2026 tax reforms protect genuine remittances, and encourage meaningful engagement. Some in the Diaspora will face new reporting requirements, but most diaspora Nigerians will continue supporting family and community exactly as before, with zero tax implications.

The key is staying informed, documenting properly, and seeking guidance when needed. Your contributions to Nigeria’s economy and your loved ones’ well-being remain valued and protected.

Disclaimer

This post is for informational purposes only and does not constitute legal or financial advice. All hypothetical scenarios and any estimated financial impacts are for illustrative purposes only. You should consult with a qualified tax professional to assess your specific tax obligations.

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October 26, 2025
Most powerful African passports for intra-Africa travel
While global passport rankings often dominate travel discussions, a fascinating pattern emerges when examining mobility within Africa itself. Intra-African passport mobility data reveals surprising disparities between regional access and global passport strength.

Cape Verde leads the continent with visa-free or visa-on-arrival access to 35 African nations, followed closely by Ghana (34) and a trio of countries — Benin, Seychelles, and The Gambia — each with access to 33 countries. This West African dominance in regional mobility stands in stark contrast to global passport rankings, where island nations like Seychelles and Mauritius far outperform their continental neighbors on the world stage. it is also pivotal that you protect yourself against legal liabilities.

Some of Africa’s largest economies e.g. South Africa, Nigeria, Egypt don’t feature in the top intra-Africa passport rankings, suggesting that economic power doesn’t directly translate to increased regional mobility privileges.

Exploring Mobility Within the African Continent

Perhaps most revealing is that approximately 53% of potential intra-African travel scenarios offer either visa-free access or visa-on-arrival options. This figure highlights both progress toward continental integration and the significant work still needed to achieve the African Union’s vision of seamless mobility across the continent.

Regional economic communities appear to be driving integration more effectively than continent-wide initiatives, with ECOWAS countries showing particularly strong intra-regional access. Meanwhile, nations experiencing political instability or security challenges—Somalia (15), Sudan (18), and Libya (20)—face the most restricted movement within Africa.

Key insights from the map

The data in the map reveal clear patterns in visa-free and visa-on-arrival access across African nations:

West African Dominance: West African countries hold the strongest passports for intra-African travel, with Cape Verde (35 countries), Ghana (34), Benin (33), and The Gambia (33) leading the continent.

Regional Clusters: There appears to be a correlation between geographical proximity and visa accessibility. Countries within established regional economic communities like ECOWAS (Economic Community of West African States) tend to have higher mobility scores.

Island Nation Advantage: Island nations like Cape Verde (35) and Seychelles (33) rank among the top performers, suggesting their strategic importance as transit and tourism hubs.

Contrast with Global Rankings: Interestingly, Africa’s strongest passports for internal travel don’t necessarily match their global Henley Passport Index rankings, highlighting the distinction between intra-continental and global mobility.

North-South Divide: Northern African countries show moderate strength (Morocco – 32, Algeria – 28), while Southern African nations display varying degrees of access (South Africa – 31, Namibia – 29).

Lowest Mobility: Somalia (15), Sudan (18), and Djibouti (19) have the most restricted access within Africa, correlating with ongoing security concerns and political instability.

The realities about African integration:

The data reveals clear patterns in visa-free and visa-on-arrival access across African nations:

Implementation of AfCFTA: The African Continental Free Trade Area (AfCTA) aims to increase mobility across Africa, but implementation varies widely across regions.

Colonial Legacy Effects: Former French colonies in West Africa show strong intra-regional mobility, possibly reflecting historical connections and established migration routes.

Economic Development Correlation: There’s a partial correlation between economic development and passport strength, though exceptions exist.

Regional Integration Progress: The higher scores among neighboring countries suggest that regional economic communities have been more successful at implementing free movement protocols than continent-wide initiatives.

As the African Continental Free Trade Area (AfCFTA) continues implementation, addressing these mobility gaps becomes increasingly crucial for realizing Africa’s economic potential. The continent’s paradoxical passport landscape—where regional strength often diverges from global influence—offers valuable insights into the complex interplay of history, economics, and politics shaping Africa’s integration journey.
March 19, 2025
Nigerian immigrants in Canada
Nigerian Immigrants (Diaspora) in Canada are emerging as a powerhouse demographic that deserves attention in the ever-evolving landscape of global business where savvy executives are constantly on the lookout for untapped markets and influential communities.

The Nigerian Diaspora in Canada is a dynamic and influential community that offers significant opportunities for businesses looking to expand their reach and connect with a highly skilled and engaged demographic. With a growing population and a strong entrepreneurial spirit, Nigerian immigrants in Canada represent a valuable market segment that can contribute to the success of organizations.

The Nigerian-Canadian Success Story

As of 2021, there were 124,705 Nigerians in Canada, a remarkable 175% growth since 1980. This rapid expansion signals a community that’s not just growing in numbers, but in economic and cultural influence as well.

Economic Clout and Spending Power: The median income for Nigerians in Canada is CA$51,000 (2021 data), indicating a demographic with significant spending power. This affluence is further evidenced by the $585 million in remittances sent from Canada to Nigeria in 2021 – a clear indication of financial stability and international ties.

A Highly Educated Workforce: Nigerian-Canadians are known for their emphasis on education and professional achievement. The community boasts high rates of post-secondary education, making them valuable contributors to Canada’s knowledge economy and potential high-value customers or partners for your business.

Entrepreneurial Spirit: With 157 Nigerian restaurants across Canada and businesses in other sectors in Canada, it’s clear that entrepreneurship runs deep in this community. This business acumen extends far beyond the culinary world, with Nigerian-Canadians making their mark in technology, finance, and various professional services.

Political Integration: The appointment of Kelechi “KayCee” Madu as the first Nigerian Deputy Premier in Canada (Alberta) demonstrates the community’s growing political influence. This level of integration suggests a diaspora that’s well-connected and influential in Canadian society.

Cultural Contributions: Beyond their economic impact, Nigerians have enriched Canadian culture in numerous ways. The vibrant Nigerian food scene, with over 157 Nigerian restaurants across the country, has introduced Canadians to delicious and diverse cuisine. Additionally, Nigerians have made significant contributions to the arts, sports, and other cultural fields.

Nigerians in Canada represent a growing consumer market with a strong purchasing power.

Nigerians in Canada Report

NGEX

Why you should focus on the Nigerian Diaspora in Canada

With over 71,000 Nigerians obtaining Canadian citizenship between 2005 and 2024, it’s clear that the Nigerian-Canadian community is here to stay and will only grow in influence. Forward-thinking executives who recognize and act on this opportunity now will be well-positioned to reap the benefits of engaging with this dynamic and influential diaspora.

Educational Excellence: Nigerian immigrants in Canada are often highly educated, with many holding advanced degrees. This translates to a skilled workforce and a consumer base with high earning potential.

Entrepreneurial Drive: The community is known for its business acumen, with Nigerian-Canadians founding successful startups and small businesses across various industries.

Strong Community Ties: Nigerian-Canadians maintain robust connections both within their local communities and with their home country, offering potential for cross-border business opportunities.

Cultural Influence: Nigerian culture, from music to cuisine, has gained popularity in Canada, indicating a growing soft power that businesses can leverage.

Emerging Market Connection: Nigeria’s status as Africa’s largest economy makes the diaspora a potential gateway to this important market.

For executives willing to invest the time and resources to understand and engage with this community, the rewards can be substantial. From accessing a pool of talented professionals to opening doors to new markets, the strategic advantages are clear. As Canada continues to welcome immigrants and the Nigerian-Canadian community flourishes, now is the time for forward-thinking executives to build meaningful connections with this influential diaspora
September 2, 2024
Where the Nigerian Diaspora are. (Nigerian immigrants by country)
Nigeria, a vibrant and diverse country in West Africa, has a significant Diaspora spread across the world. Nigerians have sought greener pastures, better opportunities, and educational advancements in various countries and they contribute significantly to their host countries and the global economy and maintain strong ties to Nigeria. This blog post attempts to provides a detailed analysis of where Nigerian immigrants are located around the world

Estimates of the population of Nigerians in the Diaspora vary widely, ranging from 1.24 million migrants (United Nations, 2017) to as high as 5 million. In 2016, Reuters reported that according to Western Union, over five million Nigerians living abroad were sending money back to Nigeria – this suggests that as of 2016, there were over five million Nigerians living outside Nigeria.

The United Nations Department of Economic and Social Affairs’ (UN DESA) estimate at mid-year 2020, of the total number of international emigrants from Nigeria is 1.7 million. In a 2011 World Bank report on Remittances in Africa, it was stated that as of 2006, an estimated 3.4 million Nigerians were living as migrants with different residence statuses across the world, up from Nigeria 187 1.9 million in 2004 (Nwajiuba 2005; Tomori and Adebiyi 2007).

Estimating the size of a Diaspora in a country gets complicated by several factors, including definition, place of birth, time of emigration, citizenship, questions of identity, survey methods, etc . For example, in some cased children of migrants born in countries or areas of destination are not included in the count of the Diaspora whole sometimes a broader definition which often includes persons of a certain ancestry or descent, such as children and grandchildren, is used.

However, official numbers of Nigerians living overseas typically undercount the actual number of the Nigerians living in most countries and so it is difficult to get an exact estimate. What is known is that in recent years, the number of Nigerians that have left Nigeria has incrased significantly and this has increased the size of the Nigerian Diaspora.

Undercounting of Nigerian immigrants can be attributed to issues such as, resistance of some Nigerian immigrants to identify themselves for official purposes, apathy amongst the Nigerian Diaspora and a lack of effective methods, by host countries, to identify reach and engage with Nigerian immigrants to get them counted.

Top Destinations for Nigerian Immigrants

Data: KNOMAD/World Bank & UN International Migrant Stock 2020 Image markup by NGEX Image Source : Migration Policy Institute Data Hub

As stated earlier, the estimated population of the Nigerian Diaspora in different countries varies significantly from report to report. However the 2015 UN Report on Trends in International Migration Stock (header image above) which showed that the Top 5 countries where Nigerian immigrants are located are: USA, UK, Cameroon, Ghana and Italy. The top five countries are consistent in the Migration policy Institute (image above) which shows mid-year 2020 estimates of the top countries with Nigerian immigrants.

United States: The United States has the largest population of Nigerian immigrants worldwide. Cities like Houston, New York, Los Angeles and Atlanta have thriving Nigerian communities. Many Nigerians seek higher education, professional opportunities, and a better quality of life in the U.S.

Population: As of 2020, the American Community Survey estimated the number of Nigerians in the USA at 402,000. In 2022, the number had risen to 712,400. We believe that this sharp increase was primarily driven by improved survey methods which captured more respondents.

Economic Impact: Nigerian households in the U.S. earned nearly $14.3 billion in 2018, paying over $2.7 billion in federal income taxes and $1.4 billion in state and local taxes. In 2021, they remitted $5.7 billion to Nigeria, accounting for about 30% of total remittances to Nigeria from the diaspora.

United Kingdom: The UK has a long-standing historical connection with Nigeria, dating back to the colonial era. This relationship has contributed to a significant Nigerian Diaspora in the UK. Many Nigerians have migrated to the UK for education, employment, and to reunite with family.

Population: The UK has a significant Nigerian community, with large populations in cities like London, particularly in areas such as Peckham. In the 2011 Census, 191,183 usual residents in England and Wales recorded their place of birth as Nigeria. In the 2021 Census, 270,768 people stated Nigeria as their country of birth and 271,390 wrote in Nigerian as their ethnic group – which is 0.5% of the population of England and Wales.

In Ireland, the 2022 census stated that 8,368 Nigerians were resident in Ireland, and 20,559 people were born in Nigeria but usually resident in the country. This is an increase of 3,990 since 2016, and Nigerians are the largest African group in Ireland. Nigerians live in many cities, including Cork, Limerick, and Dublin.

Also, in 2023, the UK Office for National Statistics said that a total of 141,000 Nigerians migrated to the United Kingdom (UK) between June 2022 and the year ending June 2023. This would significantly add to the total number of Nigerians in the UK.

Historical Ties: The UK’s historical connection with Nigeria, stemming from colonial times, has facilitated continuous migration. Many Nigerians move to the UK for education and employment opportunities.

Canada: Canada’s immigration policies have attracted a growing number of Nigerians recently. The country’s multiculturalism and opportunities for education and employment make it a popular destination for Nigerian immigrants.

Population: As of 2021 there were 124,705 Nigerians in Canada (statistics canada, 2021)

Reasons for Migration: Education and better living standards are primary reasons for Nigerians moving to Canada.

South Africa: Despite recent challenges, South Africa continues to be a destination for some Nigerians. The country’s economic opportunities and cultural similarities have drawn Nigerian immigrants, particularly those seeking entrepreneurial ventures

Other Countries: Nigerian immigrants can also be found in countries like Germany, Italy, France, Australia, and various African nations. These destinations offer different opportunities and experiences for Nigerians seeking a better life.

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Factors Driving Migration from Nigeria

Economic Opportunities: The search for better economic prospects is a primary driver of Nigerian migration. Many Nigerians seek higher-paying jobs, entrepreneurship opportunities, and a more stable economy.

Education: Access to quality education is another significant factor. Nigerian students often pursue higher education in developed countries to enhance their career prospects.

Political Instability: Political instability and insecurity in Nigeria have led some to seek refuge and better living conditions abroad.

Family Reunification: Family ties play a crucial role in migration decisions. Many Nigerians migrate to reunite with family members who have already settled in foreign countries.

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The Impact of the Nigerian Diaspora

The Nigerian Diaspora is a vibrant and influential community spread across the globe. Their contributions to their host countries and Nigeria are immense, spanning economic, cultural, and social spheres. Understanding the distribution and impact of Nigerian immigrants helps in appreciating their role in the global community.

As the Nigerian diaspora continues to grow and evolve, its impact on both Nigeria and its host countries will undoubtedly remain significant.

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August 12, 2024
Understanding the Nigerian Diaspora in the USA

Nigerians in the USA

Nigerians in the USA are a powerhouse community of potential – 712,000 strong, sending billions in remittances home, and boasting a 64% bachelor’s degree rate. They’re economically influential, culturally vibrant, and eager to connect.

Here’s how they should be engaged:

– Economic engines: They sent $5.7 billion back to Nigeria in 2021 – partner with them for business ventures and investment opportunities.

– Brainpower galore: 64% of Nigerian immigrants in the USA have bachelor’s degrees or higher – collaborate with them on research, innovation, and mentorship programs.

– Cultural tapestry: 44% speak a language other than English – celebrate their heritage and rich culture through events, festivals, arts, and intercultural dialogue.

Nigerians in the USA

Nigerians in the USA are a powerhouse community of potential – 712,000 strong, sending billions in remittances home, and boasting a 64% bachelor’s degree rate. They’re economically influential, culturally vibrant, and eager to connect.

Here’s how they should be understood:

– Economic engines: They sent $5.7 billion back to Nigeria in 2021 – partner with them for business ventures and investment opportunities.

– Brainpower galore: 64% of Nigerian immigrants in the USA have bachelor’s degrees or higher – collaborate with them on research, innovation, and mentorship programs.

– Cultural tapestry: 44% speak a language other than English – celebrate their heritage and rich culture through events, festivals, arts, and intercultural dialogue.

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August 11, 2024