By Segun Adeyanju
Nigeria’s new tax regime under the Nigeria Tax Act (NTA), 2025 has clarified how professionals with multiple income streams are expected to declare their earnings, as the law fully takes effect in 2026.
Under the reforms, all earnings from salaried employment and side businesses must now be consolidated and declared as one taxable income.
Tax experts say the law recognises individuals as a single taxable entity, regardless of how many jobs or ventures they run.
Ajibola Sogunro, Partner at Forvis Mazars, explained that while employers continue to deduct Pay As You Earn (PAYE) tax monthly, workers with additional income are required to file a personal tax return with their State Internal Revenue Service (SIRS), by March each year. Any PAYE already deducted is offset against tax due on total earnings, with only the balance payable.
The law retains a progressive tax structure, providing relief for low-income earners.
The first ₦800,000 of annual income is tax-free, while higher earnings are taxed in bands ranging from 15 percent to a maximum of 25 percent for incomes above ₦50 million.
Experts noted that declaring side income does not automatically lead to higher tax payments, as business-related expenses are deductible.
Olufemi Olarinde of the Nigeria Revenue Service said freelancers and consultants can deduct costs such as data, electricity, software subscriptions, work travel and rent relief, stressing that tax is calculated on profit, not total inflow.
However, professionals have been warned against mixing personal and business funds, as this could complicate tax assessments. Maintaining separate accounts, keeping digital records of expenses, and filing early were identified as key steps to avoid penalties.
With enforcement expected to tighten in 2026, tax authorities say proper consolidation, documentation and timely filing remain essential for compliance under the new tax law.
