Nigerians working remotely, retirees, and students residing abroad will be exempt from paying taxes on income earned outside Nigeria. This was confirmed by Taiwo Oyedele, who chairs the Presidential Fiscal Policy and Reforms Committee.
On his Twitter account last Friday, Oyedele addressed common inquiries, clarifying that pensions, scholarships, and earnings from remote work for Nigerians overseas will not be subject to Nigerian taxation. This announcement aims to dispel concerns regarding the new tax regulations, affirming that Nigeria will only tax income generated within its territory by non-resident citizens.
His explanation is grounded in the principle of tax jurisdiction, which states that a non-resident’s tax liability depends on where the income is legally sourced, rather than the location where the individual receives the payment.
“Taxation for non-residents applies solely to income originating from Nigeria. Foreign pensions and stipends are exempt unless they relate to work performed within Nigeria. Remote workers are taxed according to the laws of their country of residence or where the income is earned, not simply where the payment is made.”
He added, “For residents, taxation covers global income but is subject to applicable reliefs, allowances, and exemptions such as minimum income thresholds.”
These reforms are designed to create a more equitable and diaspora-friendly tax system, prevent double taxation, align Nigeria with international standards, and clarify tax obligations and filing requirements.
See also: A comprehensive guide to the new tax framework
Impact on Nigerians Living Abroad
This clarification holds particular importance for the increasing number of Nigerians working remotely and retirees overseas. Oyedele outlined key points:
- Remote workers’ tax responsibilities are governed by the country where they reside or perform their work, preventing the complications and risks of double taxation that a global tax approach might cause.
- Pensions paid in foreign currencies or stipends received while studying abroad remain fully exempt from Nigerian tax, provided these funds are not compensation for services rendered within Nigeria.
By clearly defining these geographic and operational limits, the committee has established a transparent and consistent policy framework, addressing a major concern for Nigerians living abroad.
Read also: Guide to calculating income tax for Nigerian freelancers and remote employees
No Double Taxation on Foreign Earnings and Tax-Free Remittances
Oyedele confirmed that money sent home as remittances will not be treated as taxable income under the new tax laws. This exemption covers genuine personal transfers such as funds sent for family support, gifts, or community contributions.
He emphasized that only active income streams-like salaries, business profits, or investment gains-are subject to taxation. The government plans to release guidelines to help taxpayers distinguish between taxable income and exempt cash inflows.
The Chairman also reassured that non-resident Nigerians will not face double taxation on the same income. He clarified that income earned abroad and brought into Nigeria is explicitly exempt from Nigerian tax, regardless of whether it was taxed in the foreign country.
Moreover, even in the absence of a Double Taxation Agreement (DTA) with another country, the new regulations provide unilateral relief to prevent the same income from being taxed twice.
This assurance addresses a significant concern among Nigerians living overseas.
Residency Criteria Explained and Filing Requirements Simplified
Oyedele also elaborated on how tax residency is determined, simplifying compliance for Nigerians abroad. Residency is based on the “183-day rule,” which counts the total days an individual spends physically in Nigeria within a 12-month period.
Non-residents are taxed only on income sourced from Nigeria, such as rental earnings or dividends. He further clarified that holding dual citizenship does not affect whether a person is classified as a resident or non-resident for tax purposes in Nigeria.
Importantly, the requirement to obtain a Tax Identification Number (TIN) and file annual tax returns has been relaxed for Nigerians living abroad. Oyedele stated that non-residents do not need a TIN or to file returns unless they earn employment or business income from Nigerian sources. The same leniency applies to bank accounts, where a TIN is only necessary if the account is used for business or income receipt.
Finally, the Chairman assured that the reforms include provisions for transparency, public accountability, and independent oversight to ensure tax revenues are linked to visible infrastructure and service improvements, with strong anti-corruption measures.
See also: Steps to obtain a Nigerian Tax ID before the January 2026 deadline for bank account holders