Rent Relief Takes Center Stage: FG Caps Tenant Deduction at ₦500k
The Big Picture
Nigeria’s personal income tax playbook just got a major rewrite. A newly signed Tax Administration Act scraps the long-standing consolidated and personal allowances in favor of a rent-based deduction that tops out at ₦500,000 per year — a move that could reshape pay-packet math for millions of tenants, Legit.ng reports.
The Details
• Out: the ₦200,000 (or 1% of gross income) consolidated relief plus 20% personal allowance.
• In: a deduction worth 20% of annual rent, capped at ₦500k, but strictly for renters who can prove what they actually pay.
The Act now lumps profits from business, employment, investments, and capital gains into one taxable pot before the new deduction is applied. “This overhaul targets fairness and transparency,” the outlet notes, especially for lower-income earners squeezed by soaring housing costs.
Why It Matters / What They’re Saying
Tax pros say the switch simplifies calculations but could hand homeowners a bigger bill. The reaction was swift from payroll teams already working to retool software for the September filing cycle. Meanwhile, policy watchers point out that tying relief to rent may incentivize formal lease agreements — a longstanding headache for revenue authorities.
Around the Tax World
• NNPCL road projects get lifeline. President Tinubu assured contractors that funding under the NNPCL Tax Credit Scheme remains intact after whispers of a cash freeze, according to The Guardian (good news for the Lokoja–Benin corridor).
• Palm oil producers push back on “produce tax.” The Plantation Palm Owners Forum warned that new state-imposed levies are pushing up food prices and amount to multiple taxation (Daily Trust).
• PwC waves yellow card on solar panel ban. An abrupt import halt could “trigger severe supply constraints,” the firm told The Nation, urging a phased approach over five years.
• Ogun rolls out one-stop road sticker. The state’s SIRTS & SHF plan promises a single annual fee to end highway harassment of truckers, OGIRS boss Olugbenga Olaleye told Business Hallmark.
Tax Stat of the Day
₦1.6 billion — pre-tax profit Eterna Plc booked in H1 2025, a sharp rebound from a ₦3.57 billion loss a year earlier (Daily Post Nigeria). Fuel marketers say post-subsidy taxes are now baked into margins.
Looking Ahead
All eyes are now on the Federal Inland Revenue Service to release guidance on proof-of-rent and payroll withholding before the new deduction kicks in for Q4 returns.
Prepared by MyTax - mytax.com.ng