Taxation and the Nigerian Diaspora

For Nigerians in the diaspora, taxation has recently taken on a renewed urgency, shaped by Nigeria’s evolving fiscal reforms and global policy shifts that increasingly touch lives beyond the country’s borders. From London to Atlanta, Toronto to Berlin, conversations among Nigerians abroad are no longer just about exchange rates or remittance channels, but about what the newly introduced tax reforms at home truly mean for them.

Nigeria’s latest tax reforms, scheduled to take effect from January 2026, are among the most ambitious fiscal overhauls in decades. Driven by the need to boost non-oil revenue, the Federal Government has made clear its intention to widen the tax base and improve compliance rather than raise blanket tax rates. According to official data, Nigeria’s tax-to-GDP ratio remains below 11 per cent, far lower than the African average of about 16 per cent. This gap has pushed policymakers to rethink how revenue is generated, especially in an economy grappling with subsidy removal, currency reforms and rising public debt.

For Nigerians living abroad, the immediate concern was whether these reforms would extend Nigeria’s tax reach to foreign-earned income or remittances. That fear was amplified by online speculation and misinformation. However, the government has repeatedly clarified that foreign income earned by non-resident Nigerians remains exempt from Nigerian taxation. Residency remains the key determinant. Under the revised framework, an individual becomes tax-resident only if they spend 183 days or more in Nigeria within a 12-month period. For the vast majority of Nigerians in the diaspora, this condition does not apply.

Equally important is the clarification on remittances. Nigeria received approximately 20.5 billion dollars in diaspora remittances in 2023, according to World Bank estimates, making it one of the largest recipients globally. These inflows support millions of households and often serve as informal social security. The government has stated unequivocally that personal remittances sent to families are not subject to taxation. This reassurance, publicly restated by the Presidential Committee on Fiscal Policy and Tax Reforms, was crucial in calming fears of an erosion of diaspora support for families and communities back home.

That said, the reforms do affect Nigerians abroad who maintain economic ties with Nigeria. Rental income from properties, dividends from Nigerian companies, business profits and capital gains derived within Nigeria remain taxable. What has changed is the effort to streamline rates and enforcement. Under the new structure, individuals earning up to ₦800,000 annually in Nigeria are exempt from personal income tax, while higher income brackets attract progressive rates of up to 25 per cent. For diaspora investors, this clarity offers both reassurance and responsibility.

Yet taxation for Nigerians abroad is not shaped by Nigeria alone. Developments in host countries also matter. In the United States, for example, proposed legislation to impose an excise tax on outbound remittances has raised concerns among immigrant communities, including Nigerians. While still under debate, such proposals highlight how diaspora Nigerians can face additional financial pressure even when Nigeria itself does not tax remittances. These external policies complicate the already delicate balance between supporting home and meeting obligations abroad.

Beyond the figures and laws lies a deeper emotional dimension. Many Nigerians in the diaspora already shoulder what feels like an unspoken tax through remittances, school fees for relatives, medical bills and community obligations. When new fiscal policies are announced, the question is rarely about refusal to contribute but about trust. Diaspora Nigerians want assurance that taxation is tied to accountability, improved infrastructure and governance reforms that justify continued engagement.

Tax policy also influences long-term decisions. Uncertainty or perceived hostility can discourage diaspora investment, while transparent and predictable systems can attract it. Nigeria’s diaspora population is estimated at over 15 million people, with significant skills, capital and global networks. How taxation is framed and implemented will shape whether this community feels like partners in national development or distant revenue targets.

For second-generation Nigerians born abroad, the issue is even more symbolic. Their connection to Nigeria is often cultural rather than administrative. If engagement with the country is defined largely by obligations without visible benefits, the risk is gradual disengagement. Taxation, therefore, becomes a measure of how Nigeria defines citizenship in a globalised world.

In the end, the newly introduced tax reforms present both reassurance and reflection for Nigerians in the diaspora. They confirm that foreign-earned income and personal remittances remain protected, while reinforcing the principle that income generated in Nigeria carries responsibility. More importantly, they reopen a broader conversation about trust, inclusion and mutual benefit. For Nigerians abroad, tax is no longer just a line in a policy document; it is a mirror of how connected they remain to the country they still call home.

Nigeria Writes Off $1.42bn, N5.57trn Legacy NNPCL Debts After Reconciliation

The Nigerian Government has written off the bulk of legacy debts owed by the Nigerian National Petroleum Company Limited (NNPCL) to the Federation Account, clearing about $1.42 billion and N5.57 trillion following a reconciliation exercise approved by President Bola Tinubu.

The decision is contained in a regulatory document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC).

The move effectively settles long-standing balances arising from crude oil liftings, production-sharing contracts and joint venture royalties accumulated up to December 31, 2024.

According to the commission, the approval followed the recommendations of a stakeholder committee constituted to reconcile claims between the national oil company and the Federal Government.

“However, the commission recently received a Presidential Approval to nil off the outstanding obligations of NNPC Ltd as at 31st December 2024 as submitted by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation,” the document stated.

Before the adjustment, outstanding obligations reported to FAAC stood at about $1.48 billion and N6.33 trillion.

Following the reconciliation, most of the balances were removed from the Federation’s books.

“Consequently, out of $1,480,610,652.58 and N6,332,884,316,237.13, the affected outstanding obligations that have been nil off are $1,421,727,723.00 and N5,573,895,769,388.45. The commission has passed the appropriate accounting entries as approved,” the regulator said.

An analysis of the figures shows that the write-off represents about 96 per cent of the dollar-denominated debt and roughly 88 per cent of the naira obligations previously classified as outstanding.

Officials familiar with the process said the decision was aimed at resolving years of disputes over historical claims between the parties and allowing both the Federation and NNPCL to operate with cleaner balance sheets going forward.

The NUPRC, however, clarified that the approval does not cover liabilities incurred in 2025.

Statutory obligations arising between January and October this year remain outstanding, with balances of about $56.8 million and N1.02 trillion linked to lifting-related charges and joint venture royalties.

The commission disclosed that part of the dollar-denominated liabilities had been recovered during the period under review.

“However, the commission received $55,003,997.00 in the month under review from the outstanding, leaving a balance of $1,804,755.32 and N1,021,550,672,578.87. The amount of $55,003,997.00 received is part of the total collection reported above for sharing by the Federation this month,” the document added.

The debt relief comes against the backdrop of weaker upstream revenue performance.

Data in the same FAAC document show that the commission fell short of its approved monthly revenue target for November by more than N540 billion, largely due to lower-than-expected royalty receipts from oil and gas production.

Actual collections in the month also declined compared with October levels.

China Launches Major Military Drills Around Taiwan

China has begun large-scale military drills around Taiwan, simulating the seizure and blockade of key areas of the island, in what Beijing describes as a warning to “separatist forces.”

The exercise, codenamed “Justice Mission 2025,” involves China’s army, navy, air force and rocket force, including live-fire drills.

It comes days after the United States approved an $11 billion arms sale to Taiwan, a move that drew strong condemnation from Beijing and led to sanctions against US defence firms.

Taiwan’s defence ministry said it detected 89 Chinese military aircraft and 28 warships and coastguard vessels operating near the island on Monday.

In response, Taiwan has deployed its own missile systems and forces, placing them on high alert to protect the island and its population.

Taiwan’s presidential office criticised the drills as a challenge to international norms, while the transport ministry announced the diversion of domestic and international flights away from affected zones, impacting more than 100,000 passengers.

China’s Eastern Theater Command described the drills as a “shield of justice,” warning that any move toward Taiwan independence would be met with force.

Beijing maintains that Taiwan is part of its territory and has not ruled out the use of “non-peaceful means” to prevent secession.