Nigeria’s 2025 tax reform brings tech freelancers and remote digital workers into the tax net, which implies earnings from foreign clients, platforms, or remote jobs are subject to regulation and scrutiny.
Under the revised Nigeria Tax Act (NTA) 2025, individuals deemed tax residents of Nigeria will be taxed on their worldwide income, and non-residents, however, will only pay tax on income sourced within Nigeria.
The World Bank estimates there are about 17.5 million online gig workers in Nigeria, Kenya, and South Africa combined, with Nigeria being one of the leading contributors.
According to a Bookipi/Upwork analysis, Nigerian freelancers command an average of $163 per job in some categories, placing the country 23rd globally for freelancer rates.
These figures underscore how many in the tech, creative, marketing, and software development fields now depend on remote income streams.
For software developers, UI/UX designers, content creators, digital marketers, and other tech workers operating remotely, earnings from foreign clients or offshore platforms such as Upwork, Fiverr may now be taxable in Nigeria if you’re deemed resident.
A person qualifies as a tax resident if, within a tax year, they live or maintain a permanent residence in Nigeria, have substantial family or economic ties to Nigeria, or spend 183 days or more in the country during 12 months.
If you cross that threshold, even income earned abroad could be taxable. Freelancers and remote workers must submit self-assessment tax returns by March 31 of the year following the income year.
If your taxable income after allowable deductions is N800,000 or less, you’re exempt from paying personal income tax, though you still must file to declare your earnings.
For higher incomes, progressive tax rates apply, capped at 25 percent for very high earners.
Freelancers can offset their gross earnings with deductions for legitimate business expenses. These include data, software subscriptions, utilities, and even makeup or wardrobe (if demonstrably used for income generation). Rent relief is also allowed; up to 20 percent of paid rent (capped at N500,000), whichever is lower.
Freelancers dealing with multiple jurisdictions, such as clients in the United States, Europe, should pay attention to double taxation treaties (DTTs). Nigeria currently has DTTs with 15 countries, allowing credits for taxes paid abroad.
Read also: Inside Nigeria’s new Tax Reform Law: Relief, risks, and realities
If your employer/client made a withholding tax (WHT) deduction at source, which implies that before they paid you, they deducted WHT, they are expected to have remitted that to the government on your behalf. Hence, when filing your taxes, you can claim your WHT as a credit to offset some of your tax liability.
In countries without treaties, such as the U.S., Nigeria allows a unilateral tax credit, meaning you may present proof of foreign taxes paid to reduce your Nigerian liability. Failing to register, file, or pay correctly can lead to sanctions, fines, and other enforcement actions.
The National Bureau of Statistics (NBS) put the number of self-employed Nigerians at 71.2 million, compared to just 13 million wage earners, in a survey of the labor force.
Many Nigerian freelancers already face challenges such as payment barriers, currency volatility, and high transfer fees when bringing earnings into the country. Some fintechs are trying to bridge the gap with improved cross-border payments for Nigerian freelancers.
Source: What you need to know as tech freelancers to brace for 2025 tax reform – Businessday NG
