Nigeria’s Tax Reforms and the Diaspora, by Boniface Ihiasota

For Nigerians living abroad, tax policy at home has often felt distant, until the recent overhaul of Nigeria’s tax framework brought it sharply into focus. The passage of the Nigeria Tax Act, which took effect from January 1, 2026, triggered anxiety across diaspora communities, fuelled largely by fears that earnings abroad or personal remittances would now attract Nigerian tax. A closer reading of the reforms, however, shows that Nigeria is not charting a radical or punitive course against its diaspora. Instead, it is aligning more closely with internationally accepted principles of taxation based on residency and income source.

At the heart of the reform is a clearer definition of tax residency. Under the new framework, individuals who spend 183 days or more within Nigeria over a 12-month period, or who maintain a permanent home or substantial economic ties in the country, are considered tax residents. Only such residents are liable to tax on their worldwide income. Nigerians who live and work abroad and do not meet these conditions remain non-residents and are taxable in Nigeria only on income sourced within the country. This distinction is critical because it dispels the widespread notion that citizenship alone now triggers tax liability.

The Federal Government, through the Presidential Fiscal Policy and Tax Reforms Committee, has repeatedly clarified that income earned abroad by non-resident Nigerians is not subject to Nigerian tax, even when such income is remitted home. Remittances sent to family members for upkeep, education, healthcare or personal support are not classified as taxable income. This position is particularly significant given that Nigeria received an estimated $20.5 billion in diaspora remittances in 2023, according to World Bank data, making it one of Africa’s largest recipients. Taxing such flows would not only have been impractical but economically counterproductive.

When viewed in a global context, Nigeria’s approach is far from unusual. Most countries operate either a residence-based or source-based tax system. In the United Kingdom, for instance, non-residents are taxed only on UK-sourced income, such as rental income from property located in Britain. Canada applies similar rules, taxing non-residents only on income earned within Canada, while residents are taxed on worldwide income. China also follows a residency threshold of 183 days, beyond which global income becomes taxable. Nigeria’s reforms fit squarely within this international pattern.

Only a handful of countries take a different approach. The United States is the most prominent example, taxing citizens on their worldwide income regardless of where they live. U.S. citizens abroad are required to file annual tax returns and comply with foreign account reporting rules, though credits and exclusions exist to mitigate double taxation. Eritrea operates a similar system, levying a two per cent diaspora tax on its citizens overseas. Nigeria has explicitly rejected this model, opting instead for a system that balances revenue generation with global mobility and fairness.

Where tax obligations do arise for Nigerians in the diaspora is in relation to Nigerian-sourced income. Rental income from property in Abuja or Lagos, dividends from Nigerian companies, or profits from businesses operating within Nigeria remain taxable, regardless of where the individual resides. In many cases, such taxes are collected through withholding mechanisms and treated as final, reducing administrative burdens on non-residents. This is consistent with global practice and reflects the principle that income should be taxed where economic value is created.

The reforms also strengthen Nigeria’s use of Double Taxation Agreements, which the country has signed with several nations including the United Kingdom, Canada, China and South Africa. These treaties are designed to prevent the same income from being taxed twice and to provide clarity on taxing rights between countries. For Nigerians abroad who may still qualify as tax residents due to time spent at home or strong economic ties, these agreements offer essential safeguards.

Beyond individual taxation, the reforms signal a broader shift in Nigeria’s fiscal strategy. By simplifying tax laws, adjusting personal income tax thresholds and expanding digital compliance systems, the government aims to widen the tax net without placing undue pressure on vulnerable groups or discouraging diaspora engagement. For Nigerians abroad, this clarity matters. Many invest in property, startups and family enterprises back home, and uncertainty around taxation has long been a deterrent.

Ultimately, the significance of Nigeria’s tax reforms for the diaspora lies not in new burdens, but in clearer rules. They reaffirm that Nigerians abroad are not taxed simply for being Nigerian, nor for supporting families at home. Instead, tax obligations are tied to presence, economic activity and income source, in line with global norms. For a country whose diaspora plays a vital role in economic stability and development, this alignment is not just sensible policy, but a necessary reassurance.

Tesla Loses Top Spot as BYD Overtakes in Global EV Sales

Tesla has reported lower-than-expected vehicle sales in the fourth quarter of 2025, losing its position as the world’s largest electric vehicle (EV) maker by annual sales to Chinese auto giant, BYD.

The American EV manufacturer, led by billionaire entrepreneur Elon Musk, said it delivered 418,227 vehicles in the final three months of 2025, bringing its total deliveries for the year to about 1.64 million units.

In contrast, a day earlier, Shenzhen-based BYD announced that it sold 2.26 million electric vehicles in 2025, overtaking Tesla to emerge as the global market leader in EV sales.

Analysts had projected a stronger performance from Tesla in the fourth quarter, with a FactSet consensus estimating deliveries of about 449,000 vehicles.

The shortfall has heightened concerns over slowing demand for electric vehicles, particularly in the United States.

Industry analysts noted that the removal of the $7,500 federal EV tax credit at the end of September 2025 has continued to weigh on consumer demand in the US market, with the sector yet to find a new equilibrium.

However, observers point out that Tesla’s sales challenges predated the policy change, as the company had already been struggling in some key markets.

This, analysts said, was partly linked to the political activities of its chief executive, Elon Musk, including his public support for US President Donald Trump and other far-right politicians, which reportedly affected consumer sentiment.

Tesla is also facing intensifying competition from Chinese manufacturers, particularly BYD, as well as from established European automakers ramping up their EV offerings.

BYD, which produces both fully electric and hybrid vehicles, on Thursday disclosed that it recorded its highest-ever EV sales in 2025, underlining the growing dominance of Chinese firms in the global electric vehicle market.

The development signals a major shift in the rapidly evolving EV industry, with analysts predicting stiffer competition and further pressure on global automakers in the coming year.

FG Targets One Exportable Product per LGA as Nigeria Deepens AfCFTA Push in 2026

The Federal Government has unveiled plans to deepen Nigeria’s participation in the African Continental Free Trade Area (AfCFTA) in 2026, with a strategy aimed at identifying at least one exportable product in each of the country’s 774 local government areas.

The initiative, according to an official report, is designed to scale up production at the grassroots, boost non-oil exports and strengthen Nigeria’s competitiveness within the African market under the continent-wide trade agreement.

The plan forms a major pillar of the Nigeria AfCFTA Agenda for 2026, building on implementation milestones recorded in 2025 and reflecting the government’s resolve to fully harness opportunities created by the AfCFTA framework.

Implementation of AfCFTA in Nigeria is being overseen by the Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, and operationalised through the AfCFTA Central Coordination Committee (CCC), in collaboration with development partners across the public and private sectors.

As part of efforts to stimulate AfCFTA-oriented production nationwide, the Ministry of Industry, Trade and Investment and the CCC are set to embark on a nationwide awareness and sensitisation campaign targeting states, local governments and key economic actors.

“FMITI will work with the Nigerian Governors’ Forum and State Governments to identify a minimum of one product that each Local Government Area can export into the AfCFTA market,” the report stated.

Beyond boosting local production, the 2026 AfCFTA agenda places strong emphasis on creating an enabling policy and regulatory environment to support the effective implementation of the AfCFTA Agreement and its protocols.

The Ministry of Industry, Trade and Investment is expected to lead efforts to align domestic regulations with continental trade rules.

The report also highlights plans to simplify AfCFTA rules and compliance requirements through targeted publications and guides for businesses, particularly small and medium-scale enterprises, while strengthening institutional coordination and improving accountability among public sector agencies involved in trade facilitation.

On investment and industrial capacity, the document noted that investment mobilisation efforts, both foreign and domestic, will focus on significantly expanding productive capacity in priority sectors to position Nigeria as a leading innovation, production and distribution hub within the AfCFTA market.

In addition, Nigeria plans to upgrade its trade data systems to enhance tracking of AfCFTA trade flows, including disaggregated data on goods, services and participation by women and youth.

The country will also intensify global advocacy efforts and host key continental trade engagements ahead of the Intra-African Trade Fair scheduled for 2027.

The government expressed optimism that the 2026 agenda will accelerate inclusive growth, deepen regional integration and strengthen Nigeria’s leadership role in intra-African trade.