In a move that’s sending waves through Nigeria’s digital economy, remote workers must pay tax 2026 under new legislation requiring freelancers and remote employees to be taxed same as conventional workers. Effective January 2026, Nigerians coding for U.S. startups from Lagos or anywhere in Nigeria will now be liable for income tax under the updated tax regime.

What’s Changing: Income Tax for Remote & Freelance Workers

Under the new rules initiated in June 2025, Nigeria has broadened its tax base by removing bottlenecks and closing loopholes. The law now treats income earned from abroad by Nigerians (even if not brought into Nigeria) as taxable—provided the individual is a Nigerian resident. The personal income tax rate will be capped at 25%, which remains lower than comparable rates in South Africa (45%), Kenya (35%), Egypt (27.5%), and Algeria (35%).

According to Chapter Two, Taxation of Income of Persons, the law states:

“The income, gains or profits of an individual who is a resident of Nigeria are deemed to accrue in Nigeria and are chargeable to tax … whether or not the income … has been brought into or received in Nigeria.”

It also clarifies that if a Nigerian works abroad in a country that exempts their salary due to double tax treaties (DTT), the tax paid abroad can be credited against what is owed in Nigeria.

Why This Matters, Especially for Remote Workers

WhatsApp groups of remote workers are already buzzing. Many are trying to forecast how much will be deducted from their monthly earnings. One remote quality analyst told TechCabal:

“People want to know how much tax they will be paying from next year.”

Imagine earning $2,000/month working for a U.S. startup from Lagos—starting 2026, that income will be taxable under Nigeria’s regime. That shift may severely impact take-home pay for many freelancers and developers relying on foreign contracts.

Comparisons & Implications

Though the top rate is 25%, Nigeria’s new tax climate is still more lenient than some African neighbors. Still, for the remote and gig economy sector, this is a paradigm shift.
Some positive features:

• If income is taxed abroad via DTT countries (like UK, Canada, China, etc.), it may reduce net burden.
• The new tax push is part of Nigeria’s goal to raise its tax-to-GDP ratio from under 10% to 18% by 2027.
• It could formalize many freelancers, giving them access to formal financial services, credit, and social protections.