Nigeria’s 23% Tax on Remote Workers: What You’ll Pay & How

The Nigerian government is moving to bring remote workers into the tax net under new reforms, aiming for a total tax burden of roughly 23% on their earnings. In June 2025, President Bola Tinubu signed four major tax bills into law, overhauling the system to ensure that freelancers and remote employees pay taxes just like any other Nigerian income earner.

These changes mean that if you’re based in Nigeria and earning income from foreign companies or clients, you are now explicitly required to register with the tax authorities, declare your foreign income in Naira, and pay applicable taxes. This guide breaks down how the government intends to collect these taxes, which taxes apply, and how you can stay compliant while minimizing your liability.

Categories of Remote Workers: Foreign Employees vs. Freelancers

Remote workers generally fall into two groups, and the tax rules affect them somewhat differently:

• Employees of Foreign Companies: Nigerians who work remotely as full-time or part-time employees of companies overseas. They receive salaries or wages from a foreign employer. Since the employer has no local presence, no PAYE tax is deducted at source; instead, the worker must self-report this income to Nigerian authorities. Under the new law, a remote employee in Nigeria earning (for example) $3,000/month from a U.S. company “must register with the state tax authority, declare income in Naira and pay tax like every Nigerian earner”.
• Freelancers and Contractors: Self-employed individuals providing services to multiple international clients (e.g. via Upwork, Fiverr, or direct contracts). They effectively run a small business as sole proprietors. Freelancers are “on the hook for [their] own taxes” – meaning they must keep records of income and expenses and file tax returns independently. Unlike formal employees, they don’t receive payslips with tax deducted, but they can deduct business expenses to determine taxable profit.

Despite these differences, both categories are now squarely within Nigeria’s tax net. Whether you’re salaried by a foreign tech firm or invoicing clients abroad, you are considered a Nigerian resident taxpayer if you live in Nigeria. The new Nigeria Tax Act 2025 defines residency clearly (e.g. domiciled or >183 days in-country) and confirms that residents are taxable on worldwide income regardless of where it is earned or whether it is brought into Nigeria. In short, if you live in Nigeria and earn money remotely, you will owe Nigerian tax on that income (unless a specific exemption applies, as discussed later).

Breakdown of Taxes on Remote Work Income

Remote workers may be subject to several Nigerian taxes. The primary one is Personal Income Tax, but other taxes like Digital Services Tax (DST), Value Added Tax (VAT), and Withholding Tax (WHT) can also come into play. Below is a breakdown of each tax, including how it’s calculated and collected in practice:

Personal Income Tax (Worldwide Earnings)

Personal Income Tax (PIT) is the main tax on your income. For employees, this is analogous to PAYE (Pay-As-You-Earn) deductions that employers normally remit. For remote workers without a local employer, you must self-assess and pay PIT to your State Internal Revenue Service. Key points include:

• Taxable Income: As a Nigerian resident, your global earnings are taxable in Nigeria. This includes foreign salaries, freelance fees, and even income paid to overseas accounts (the new law closed old loopholes where unremitted foreign income might escape tax). You’ll need to convert all foreign earnings to Naira using the official exchange rate for tax calculations.
• Tax Rates and Bands: Nigeria has a progressive PIT system. The first ₦800,000 of annual income is tax-free under the new threshold. Above that, income is taxed in bands at 15%, 18%, 21%, 23%, up to a top rate of 25% for the highest earners. For example:
  • ₦0 – ₦800,000: 0% (tax-exempt)
  • ₦800,001 – ₦3,000,000: 15%
  • ₦3,000,001 – ₦12,000,000: 18%
  • ₦12,000,001 – ₦25,000,000: 21%
  • ₦25,000,001 – ₦50,000,000: 23%
  • Over ₦50,000,000: 25%

• These new bands (effective 2026) actually lighten the burden for low-mid earners while moderately increasing it for high earners by removing earlier reliefs A mid-level remote worker might see an effective tax around the 20-23% range, which is likely the “total tax burden ~23%” being targeted.
• Calculation of Tax: If you’re a freelancer or contractor, PIT is assessed on your net profit (revenue minus allowable business expenses). Allowable deductions can include expenses “like internet, software, or home office costs” that are wholly and exclusively for your work. It’s crucial to maintain good records – under the Tax Administration Act, if you fail to keep proper books, the tax authority might assess your income on a presumptive basis (e.g. a minimum tax of 1% of turnover or 5% of profit, whichever is higher). Employees on the other hand are taxed on gross employment income (with limited reliefs such as pension contributions or a new rent allowance relief, discussed later).
• Collection Method: For regular employees in Nigeria, employers withhold monthly PAYE. But a foreign employer will not deduct Nigerian tax. Therefore, remote employees must file annual tax returns (and may choose to pay periodic advance tax to avoid one large bill). Generally, annual returns for individuals are due by March 31 of the following year. You’ll calculate your annual tax due based on total income and pay any balance to your State tax authority (e.g. Lagos Internal Revenue Service for Lagos residents). States like Lagos are even exploring automatic deduction at source – possibly withholding a percentage of foreign currency inflows via banks – though specifics are still in progress. In any case, you are legally required to pay your assessed PIT, and non-payment can attract penalties (10% of the tax due, plus interest) or even prosecution.

Digital Services Tax (DST)

Nigeria has implemented a form of digital services tax aimed mainly at foreign companies, not individual workers. In 2019, an amendment to the Companies Income Tax Act introduced the concept of Significant Economic Presence (SEP), meaning non-resident companies earning income from Nigeria’s digital economy are taxable here. For example, foreign tech firms providing online services to Nigerian users (streaming, digital ads, etc.) or offering technical services to Nigerian clients may be subject to Nigerian tax if they exceed certain revenue thresholds. A 6% levy on turnover was instituted as a sort of DST for some transactions.

For Nigerian remote workers, the DST does not directly tax your income. Instead, it taxes the foreign digital platforms or service providers. For instance, if you advertise to Nigerians via Facebook, Facebook might fall under Nigeria’s digital tax rules. Or if you sell apps to Nigerian customers from abroad, you might need to register for tax via FIRS if you meet the SEP criteria. However, if you are a Nigerian providing services to clients abroad, you are on the opposite side of this equation (you’re the exporter, not the consumer). Your foreign clients will not be charged a Nigerian DST for paying you, since the DST targets services consumed in Nigeria.

In summary, the DST is part of the government’s strategy to tax the digital economy (ensuring “non-resident digital service providers… file tax returns on income earned from Nigeria”). While it doesn’t mean you pay an extra tax on your freelancing income, it indicates Nigeria’s aggressive stance on taxing online business. Remote workers should be aware that Nigeria collaborates with the federal government on DST and digital economy taxes – this could extend to closer monitoring of online transactions. If you also operate a digital platform or marketplace as part of your work, you may have separate compliance obligations under these rules.

Value Added Tax (VAT) on Services

Value Added Tax is a 7.5% consumption tax on goods and services in Nigeria. For remote workers, whether VAT applies depends on the nature of your services and your clients:

• Exports of Service: If you provide services to a foreign client (i.e. the service is consumed outside Nigeria), it qualifies as an export. Under current rules, exports are zero-rated for VAT, meaning no VAT is charged but you can still claim input VAT credits. In practice, if all your clients are overseas, you likely don’t need to charge VAT on your invoices. It’s wise to document that the service was for a foreign recipient in case tax authorities seek proof.
• Local Services: If you provide any service to Nigerian customers (for example, a local consulting gig alongside your foreign gigs), that service is subject to 7.5% VAT. You must charge VAT to the client and later remit it to FIRS. However, there is a turnover threshold: businesses (including sole proprietors) with annual taxable turnover of ₦25 million or less are exempt from registering for VAT. In other words, if your freelance business earns ₦25m (~$33k) or below in a year, you generally don’t have to charge VAT on your services. Most individual remote workers fall under this threshold. If you exceed ₦25m, you’re required to register for VAT, charge 7.5% on Nigerian sales, and file monthly VAT returns.
• Collection: VAT on local services is collected by you from your client (by adding 7.5% to your invoice) and then paid to the government. If you’re VAT-registered, you must file a VAT return and remit the tax by the 21st of the following month. Many freelancers avoid crossing the threshold, but if you do, note that you can pass the cost to your client (e.g. charge ₦325,500 instead of ₦300,000 and explicitly label the ₦25,500 as VAT on the invoice). There are stiff penalties for failing to register or remit VAT when required, but staying below ₦25m turnover keeps things simpler for most. Keep in mind that even if you’re under the threshold, FIRS may still require you to file nil VAT returns – check the latest guidelines or consult a tax advisor to be sure.

Withholding Tax on Payments

Withholding Tax (WHT) is not a separate tax per se, but a mechanism for collecting income taxes in advance. When certain payments are made, the payer must withhold a percentage and remit it to the government on the payee’s behalf. For remote workers:

• Domestic Clients: If a Nigerian company or government entity hires you as an independent contractor, they are required to deduct WHT from your fee. For most professional services (consulting, design, software development, etc.), the WHT rate is 5% of the payment. (Prior to recent reforms, companies had to withhold 10% on such services, but regulations have harmonized many WHT rates to 5% for simplicity.) For example, if you did a ₦1,000,000 contract for a Lagos company, they might pay you ₦950,000 and send ₦50,000 to the tax authorities as WHT. You should obtain the WHT credit note from the client – it’s essentially a receipt showing tax prepaid in your name.
• Foreign Clients: If all your clients are overseas, you generally won’t have Nigerian WHT taken from your payments, because the obligation applies to Nigerian payers. A foreign company with no Nigerian presence has no mandate to withhold Nigerian tax on your fee. (One exception could be if you formed a Nigerian company and provided services to a foreign company that, due to its local laws or a tax treaty, withholds foreign tax on the payment. In such cases, that foreign WHT might be creditable against your Nigerian taxes under a treaty – see the international section below.)
• Use of WHT: For Nigerian tax residents, WHT is an advance payment of income tax. If a local client deducted 5% WHT on your fee, that amount will be credited towards your final PIT liability for the year. When you file your annual return, you can subtract any WHT paid on your income from the tax due. If WHT exceeds your calculated tax (e.g. you had low profit after expenses), you could request a refund or carry it forward. In practice, many freelancers avoid overpaying and treat WHT as a forced savings toward their tax bill. Note that withholding is not a substitute for filing – you still must file your tax return even if all income had WHT deducted. Also, WHT only covers federal taxes; for example, dividend payments and rent attract 10% WHT which is final tax in some cases, but those are less relevant to typical remote work scenarios.

In summary, check your contracts for any WHT clauses. If a client (local or foreign) insists on withholding some tax, clarify why and ensure you get documentation. Properly handled, WHT simply pre-pays a portion of your income tax and prevents double taxation of the same income.

Tax Administration & Collection: Who Will Enforce This?

Several government agencies are involved in implementing these taxes for remote workers:

• Federal Inland Revenue Service (FIRS) → Nigeria Revenue Service (NRS): The FIRS is Nigeria’s federal tax authority (set to be renamed NRS under the new reforms). It handles taxes like VAT, Companies Income Tax, and administers withholding taxes. It also oversees tax policy implementation nationwide. The new Nigeria Revenue Service Act aims to make the agency more independent and “digital-first” with BVN-linked tracking of taxpayers. FIRS/NRS will be leveraging technology to identify untaxed income (for instance, monitoring bank inflows) and cooperating with state authorities to share data. FIRS is also responsible for any digital services tax compliance by foreign companies.
• State Internal Revenue Services (SIRS): Personal Income Tax is collected by the tax authority of the state where you are resident. Each state (Lagos IRS, Abuja FCT IRS, etc.) processes individual tax registrations, PAYE remittances, and personal tax returns. The Joint Tax Board (JTB) coordinates these state bodies to ensure uniform rules. Under the new Joint Revenue Board Act, there’s better coordination and even a Tax Tribunal and Ombudsman for disputes. Practically, this means if you move from, say, Lagos to Abuja, your tax records can be aligned so you’re not double-taxed. Remote workers should register with their state tax authority (you’ll usually get a Tax Identification Number that may be harmonized with the federal TIN system).
• Central Bank of Nigeria (CBN): While not a tax authority, CBN plays a role in enforcement via financial regulation. Banks report inflows and outflows, and the CBN can flag large foreign currency deposits. As tax enforcement tightens, foreign payment flows through Nigerian banks are being monitored and can be used to identify untaxed income. There is discussion of routing tax collections through banks – e.g., Lagos State’s proposed “Resident Global Digital Citizen Tax” system, which may “automate deductions through financial institutions” by withholding a percentage of FX inflows as tax. While details are pending, remote workers should expect less anonymity when receiving foreign payments into Nigerian accounts.
• Joint Initiatives: The federal and state governments are collaborating more closely on taxing the digital economy. For example, Lagos State’s initiative to tax digital earners will likely tie into federal data systems. The new Tax Administration Act standardizes tax collection processes across federal, state, and local levels. This means whether you deal with FIRS or a state IRS, the procedures (e-filing portals, payment methods, etc.) should become more uniform and user-friendly. It also means there are fewer loopholes to exploit by arbitrage between jurisdictions.

How Will the Government actually collect? In practice, once you’re registered, you’ll be expected to file returns and pay voluntarily. However, the government isn’t relying on honour system alone. As noted, digital monitoring is being ramped up – “your income whether local or global is now more visible, thanks to digital tracking and global tax treaties”. The NRS and CBN can quietly track foreign payments to your Nigerian bank or fintech accounts. International treaties and information exchange mean even payments kept abroad might be reported back to Nigeria. If you don’t come forward to pay, the tax authority may eventually contact you with an assessment. It’s far better to be proactive, register, and regularly pay your dues than to accumulate back taxes, penalties, or face a surprise audit.

International Tax Treaties & Double Taxation

One concern remote workers have is double taxation – paying tax in two countries on the same income. The good news is that in most cases, remote workers will not be taxed abroad on their income, only in Nigeria, due to how tax residency works. But let’s consider a few scenarios and the role of tax treaties:

• Sole Nigerian Taxation: If you work from Nigeria for a foreign company/client and do not physically work in the client’s country, generally only Nigeria has the right to tax your earnings. For example, a Nigerian resident writing code for a UK company will pay Nigerian tax, and the UK will not tax that income because the work isn’t performed in the UK (and the person isn’t a UK resident). Nigeria’s new law explicitly states that “employment income will now be taxed in Nigeria only if the individual is resident in Nigeria or performs duties in Nigeria without paying tax in their country of residence”. This implies if you did somehow pay tax in the foreign country, Nigeria would not double-tax it – a principle aligned with treaty practices.
• Tax Treaties: Nigeria has Double Taxation Agreements with a number of countries (including the UK, Canada, South Africa, China, and others). Treaties typically ensure that income is taxed in one country or the other, or that one country gives credit for tax paid to the other. For instance, under a typical treaty’s Employment Income article, your salary is taxable in your country of residence (Nigeria) unless you physically work in the other country beyond a certain period. Treaties also facilitate exchange of information: if your employer or client is in a “compliant country,” they may report what they pay you, and “Nigeria can get your income info automatically” through treaty-based exchanges.
• Foreign Tax Credits: In the rare case where your remote work income is taxed by a foreign jurisdiction, you can likely claim a foreign tax credit against Nigerian tax. For example, perhaps you are contracted by a company in Country X that withholds a flat 10% “non-resident tax” on your fee. If Nigeria has a treaty with Country X, that treaty would override domestic law to avoid double tax. You would declare the foreign income on your Nigerian return, but you can deduct the tax already paid abroad (up to the amount of Nigerian tax due on that income). Even without a treaty, Nigeria’s tax law historically allowed some unilateral relief or deduction for foreign taxes paid. The key is to keep proof of any such foreign tax paid and consult the treaty or a professional to properly claim the credit.
• Social Security and Others: Note that foreign social security deductions (for example, if your foreign employer contributes to a pension scheme or health insurance abroad on your behalf) are generally not considered “taxes” that Nigeria will credit. However, as a Nigerian worker you are not required to pay into Nigerian social schemes unless you choose to (for instance, you can voluntarily contribute to the Nigerian Pension Scheme or National Housing Fund for your own benefit and possibly get tax relief on those contributions).

In summary, double taxation is unlikely for purely remote work, and international agreements exist to prevent it. Your main obligation will be in Nigeria. If you anticipate any foreign tax obligations (say you travel and work temporarily in another country), be sure to get advice on the treaty implications. And rest assured, if you pay what you owe in Nigeria, you won’t be taxed twice on the same income due to these safeguards.

Compliance Steps for Nigerian Remote Workers

To remain compliant and avoid trouble, here are practical steps every Nigerian remote worker should take:

1. Register for Tax & Obtain a TIN: Start by registering with the tax authority. For now, this means your state Internal Revenue Service (and with the new reforms, registration is often unified with the national Tax Identification Number system). Getting a TIN is free and mandatory. This TIN will be used in all your tax filings and will link your records across agencies.
2. Track All Income (in Naira): Meticulously track your earnings from foreign clients or employers. Use a dedicated account or a tool to log every payment. You’ll need to convert foreign currency earnings to Naira at the CBN official rate on the date of receipt for tax purposes. Some fintech platforms (Geegpay, VitalSwap, etc.) provide dashboards to monitor USD/GBP/EUR earnings and their naira equivalenta. Keep those records – they form the basis of your tax return.
3. Record Allowable Expenses: If you’re a freelancer/business, keep receipts and records of your work-related expenses. Deductible costs like courses, software, equipment, internet, travel for work, etc., can lower your taxable income. Maintain a spreadsheet or use accounting software to track these. If you use part of your home for work, a reasonable portion of rent or utilities might be deductible as well (a tax advisor can help apportion this). These expense records will support the profit calculations you report to the tax authorities.
4. Determine VAT Obligations: Calculate your annual gross revenue. If it’s above ₦25 million, prepare to register for VAT and charge 7.5% on local sales. Even if you’re below ₦25m, be mindful that if you approach that threshold, you should plan ahead (e.g., discuss pricing with any Nigerian clients to add VAT when required). If all your services are exported, claim the zero-rated status to avoid charging VAT, but you may still want to register voluntarily if you have significant input VAT on business purchases to claim back. When in doubt, seek guidance from FIRS or a tax consultant.
5. Plan for Withholding & Credits: If a client (especially Nigerian) will withhold tax from your payment, insist on getting the WHT credit note. Maintain a file of all WHT credits, as you can use them to offset your income tax when filing. If no one is withholding tax for you (as is common with foreign clients), it’s wise to set aside money yourself for taxes – for example, periodically transfer 20-25% of your earnings into a savings sub-account so that when tax time comes, you have the funds to pay. This prevents nasty surprises and cashflow crunches.
6. File Annual Tax Returns: As a self-employed individual or someone without PAYE, you must file a return each year (typically by March 31 for the preceding calendar year). On the return, you’ll declare your total income (with a breakdown of foreign sources), calculate your tax per the bands, subtract the ₦800k allowance and any other reliefs, and then subtract WHT or foreign tax credits if any. The Tax Administration Act has standardized filing – many states offer e-filing portals. Ensure you file on time to avoid penalties. Note that even if your income was below taxable levels, file a “nil” return to stay in good standing (the tax laws may consider not filing at all as an offense even if no tax was due).
7. Pay Any Taxes Due: Along with filing, you’ll pay any balance of tax due. State IRS offices usually have designated bank accounts for payments or online payment options. Keep proof of payment. If your tax is large, you might be able to arrange installment payments – but this should be discussed in advance with the authorities to avoid being counted as a defaulter. Going forward, if the system of automated bank withholding on inflows comes into effect, those amounts will count toward your payment and reduce what you have to pay manually.
8. Consider Tax Optimization Strategies: Within the law, make use of reliefs and incentives:
   • Personal Reliefs: The new framework removed the old generalized relief allowance, but it introduced a rent relief (20% of annual rent up to ₦500k) for those who pay rent. If you’re a tenant, declare your rent and claim that deduction. Also, contributions to approved pension schemes, life insurance premiums, and National Housing Fund are still allowable deductions – if you don’t have an employer pension, you can contribute voluntarily to a personal pension plan to both save for retirement and cut your tax bill.
   • Industry Incentives: Nigeria offers some tax incentives for certain industries. For example, under the Nigerian Startup Act and other creative industry policies, there are tax breaks for tech startups and R&D activities. If you freelance in tech or creative arts, check if you qualify for pioneer status or the new Economic Development Tax Credits. Most of these apply to registered companies, but if your freelance practice grows, you might consider incorporating a small company to leverage such incentives.
   • Use of Corporate Structure: This is a more advanced strategy and should be weighed carefully. If your remote income is substantial, consult a tax advisor on whether operating via a registered company makes sense. Small Nigerian companies (with turnover ≤ ₦50 million) now pay 0% Companies Income Tax. In theory, you could incorporate, have your foreign clients pay your company, and the company would owe no CIT if under ₦50m revenue. You could then pay yourself dividends, which might incur only a 10% withholding tax – potentially lower than the top PIT rate. However, running a company comes with compliance costs, and any salary you draw would still be subject to PAYE. The dividend WHT exemption for small companies has been removed, meaning even small-company dividends now attract 10% tax. So the benefits exist but are limited. This route is only advisable if you are earning at a level where the savings outweigh the hassle, and you should get professional advice to implement it properly.
9. Stay Informed and Seek Help: Tax laws evolve. As of 2025, a lot is changing – for instance, the NRS (former FIRS) is rolling out new digital services and the government may announce further guidelines before the 2026 effective date. Keep an eye on official announcements (the FIRS/NRS website, Ministry of Finance releases, etc.) and credible news sources. If you’re unsure about anything, consult a tax professional. The cost of some advice is far less than potential fines or missed savings. As one guide put it, a tax advisor “can uncover deductions or incentives, saving you thousands”, and also ensure you don’t run afoul of the law.

By following these steps, you’ll greatly reduce the risk of compliance problems. Nigerian authorities are emphasizing that “tax evasion is no joke” – penalties can include fines and even jail time in extreme cases. On the flip side, the reforms also aim to make compliance easier (with unified laws and digital platforms) so that honest taxpayers can “file simpler if you stay organized”.

Key Exemptions and Thresholds to Note

Finally, here’s a recap of exemptions and thresholds relevant to remote workers, which can help in tax planning:

• ₦800,000 Tax-Free Threshold (PIT): Every individual gets this annual allowance automatically. If you earn ₦800k or less in a year (roughly ₦66k per month), you pay zero income tax. Even above that, only the excess is taxed at 15%. This is beneficial for low-income earners. (Note: You still need to file a return even if you’re under the threshold, but you won’t owe tax.)
• Minimum Wage Exemption: Nigeria’s minimum wage (₦30,000/month) had been tax-exempt under prior Finance Acts. The ₦800k threshold now covers that, making sure those at or near minimum wage are not taxed. If you make under ₦300k yearly, some sources say you’re likely fully tax-exempt (this figure was from older rules; effectively the new law just expanded it to ₦800k).
• VAT Registration Threshold: As discussed, if your business turnover is ₦25 million or less per annum, you are not mandated to register for or charge VAT. This spares most freelancers from the complexity of VAT. (You may still volunteer to register if you regularly incur VAT on purchases and want to reclaim it, but that’s a strategic choice.)
• Small Company CIT Exemption: If you do choose to incorporate your freelance business, note that companies with ₦50 million or less in turnover are taxed at 0% CIT. Medium companies (just above ₦50m) pay a reduced rate (the new Act sets non-small companies at 30%, seemingly removing the old 20% medium tier). Also, small companies are exempt from the new 4% “development levy” on profits that the tax reform introduced for larger firms. Essentially, the government wants to encourage small startups – an incorporated freelance outfit can take advantage of these, but remember the trade-offs (you’ll have filing obligations even at 0% tax).
• Treaty Exemptions: If by chance you are a foreign national residing in Nigeria temporarily, or a Nigerian who also meets tax residency in another country, a tax treaty might exempt certain income. For example, some treaties allow professors, researchers, or students to exempt foreign-sourced income for a period. These are niche cases; the average remote IT or creative worker won’t have a special exemption just by treaty except relief from double taxation. One noteworthy provision in the 2025 reforms is that non-resident employees of foreign tech/creative companies are exempt from Nigerian tax provided their income is taxed in their country of residence. This doesn’t directly help someone who is resident in Nigeria, but it’s good to know such rules exist (in case in the future you are not resident but still earning from Nigeria).
• Severance Pay Relief: If you are an employee and lose your job, any severance or redundancy payout up to ₦50 million is now tax-free. This could apply if, say, a foreign company lays off its Nigerian remote staff and gives compensation. Above ₦50m, the excess would be taxed, but ₦50m covers most such payments and provides a huge relief during transition.
• Specific Industry Incentives: Under various government programs, there may be targeted tax holidays or credits (for example, the Pioneer Status Incentive for certain industries has been reformed into a credit-based system). While as an individual you can’t get “pioneer status,” if you do something like invest in a startup or engage in agricultural processing, there might be exemptions on that income. Crypto and digital assets: Note that gains from digital assets (crypto, etc.) are now explicitly taxable as capital gains/income at the new rates. However, if you’re just trading on the side, an existing exemption is that profits from the sale of Nigerian government bonds and certain agro investments are tax-free – not directly related to remote work, but useful to keep in mind for investment income.

Always double-check the current laws for any updates on thresholds. The tax reform is meant to be dynamic, so thresholds could change with economic conditions (for instance, that ₦800k might be reviewed periodically). Make it a habit to review the Finance Act each year for any new relief that could apply to you.

Conclusion

Remote work has opened up a world of opportunity for Nigerians, and now Nigeria’s tax system is catching up. The government’s plan to collect around a 23% tax burden from remote workers simply means remote earners must contribute their fair share, just like onshore workers do. By understanding the taxes involved – Personal Income Tax, VAT, WHT, and the broader digital tax environment – and following the compliance steps outlined above, you can avoid penalties and even optimize your taxes so you keep as much of your hard-earned income as possible.

Nigeria’s message is clear: working for a foreign entity is not an excuse to evade taxes back home. The days of hiding Payoneer or Wise transfers are numbered, given that “if your account is linked to your BVN or bank, your foreign inflow is already visible”. The upside is that the new tax regime also brings simplicity and fairness – low earners are protected, and higher earners get clearer rules to follow.

By staying informed and proactive about your tax obligations, you can focus on your remote work confidently, knowing you’re on the right side of the law. When in doubt, seek professional advice – think of taxes as a manageable aspect of your freelance or remote-work business. With proper planning, you can comply with the law while still thriving financially in the global digital economy. Here’s to your success as a compliant and informed remote worker in Nigeria’s new tax era!

Note: This analysis was done in September 2025. Always refer to current FIRS/NRS guidelines or consult a tax professional for the most up-to-date advice