Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has clarified how the newly enacted tax reform laws will affect Nigerians living abroad, addressing key concerns around tax filing, remittances, Tax Identification Number (TIN), and residency rules.
In a Q&A issued to address concerns of Nigerians in the diaspora, Oyedele clarified that Nigerians abroad are not obligated to obtain a Tax Identification Number (TIN) or file annual tax returns in Nigeria unless they earn income from Nigerian sources, such as employment or business operations within the country.
“A TIN is not required, and there is no requirement to file tax returns unless you earn employment or business income from Nigeria,” he noted.
He added that non-residents without Nigerian-source income are exempt, and compliance has been made easier through online platforms such as TaxProMax and simplified TIN application processes.
“A TIN is also not required to open or maintain a bank account unless the account is for business purposes or income receipts,” he added.
No double taxation for diaspora Nigerians
Oyedele said income earned outside Nigeria and later remitted home will not be taxed again.
“Income earned abroad and brought into Nigeria by a non-resident individual is now specifically exempted from tax in Nigeria, regardless of whether tax was paid abroad or not,” he said.
He added that Nigeria’s Double Taxation Agreements (DTAs) with several countries — and new relief provisions for countries without DTAs — ensure that the same income is not taxed twice.
He said the clarification became necessary following widespread questions from diaspora Nigerians on the implications of the government’s new tax framework.
“Many Nigerians in the diaspora have raised questions regarding the new tax reform laws and their possible implications. This note provides answers to the frequently asked questions and clarifies issues of concern,” he explained.
Remittances and family transfers are not subject to tax
On the taxation of remittances, Oyedele assured Nigerians abroad that personal transfers and family support payments are not taxable under the new tax laws.
“Genuine personal transfers such as family remittances, gifts, refunds, or community savings contributions are not treated as taxable income,” he explained.
He said only income earned or deemed to be income—such as wages, business profits, or investment returns—will attract tax. Tax authorities, he added, will issue clear guidelines to distinguish between taxable and non-taxable inflows.
Tax residency based on the 183-day rule
Explaining how tax residency is determined, Oyedele said it depends on the 183-day rule, which considers the number of days an individual spends physically in Nigeria within a 12-month period.
“Non-residents are taxed only on income derived from Nigeria, such as rental income, dividends, or business profits,” he clarified.
He stressed that diaspora Nigerians who live abroad are not taxed on their foreign employment or business income, and dual citizenship does not affect tax status.
Pensions, stipends, and remote work income are exempt from Nigerian tax
On pensions and remote work earnings, Oyedele noted that pensions and stipends from abroad are not taxable in Nigeria unless they arise from work performed within Nigeria.
“Only income that arises in Nigeria is taxable for non-residents,” he said.
“Remote workers are taxed based on the rules in the country where they are resident or earn such income, not merely where payment is made.”
For Nigerians classified as tax residents, however, worldwide income applies — subject to reliefs, allowances, and exemptions under Nigerian law.
What you should know
- Last month, Oyedele disclosed that the tax reform laws had been officially published in the government gazette, marking a major step in overhauling the country’s fiscal framework.
- The reforms, signed into law on June 26, 2025, establish a new foundation for taxation, administration, and revenue collection in Africa’s largest economy.
- The four new legislations are the Nigeria Tax Act (NTA), 2025; the Nigeria Tax Administration Act (NTAA), 2025; the Nigeria Revenue Service (Establishment) Act (NRSEA), 2025; and the Joint Revenue Board (Establishment) Act (JRBEA), 2025.