The newly signed tax reform laws by President Bola Tinubu have brought foreign earnings of remote workers in Nigeria under the tax net.
Under these new regulations, individuals working remotely for foreign companies or clients
including freelancers, tech experts, and digital entrepreneurs must register with their
respective state tax authorities, report their foreign income in naira, and pay the required
taxes, just like other Nigerian income earners.
The shift to remote work was significantly accelerated by the COVID-19 pandemic. By mid-
2021, around 70% of companies in industries such as tech and finance had adopted remote
or hybrid work models, according to McKinsey. The World Economic Forum also projects the
number of remote jobs to reach 92 million by 2030.
PwC, a global professional services firm known for its expertise in audit, tax, and advisory,
noted in its analysis of the new tax laws that Personal Income Tax will now apply to the
global income of any resident individual a term that has been clearly defined in the updated
legislation.
Previously, there were differing interpretations due to the absence of a clear definition of
“residence.” With the new law now including individuals with significant economic or
immediate family ties within a tax year, the tax base has been broadened.
Under the reform, employment income will only be taxed in Nigeria if the individual resides in
the country or works within Nigeria without being taxed in their country of residence.
Commenting on the development, financial consultant Feji Iyeke stated that the era of
remote workers avoiding taxes is coming to an end.
Iyeke, popularly known as @your_moneyguy on social media, told The PUNCH that the new
tax reform closes a long-standing loophole in Nigeria’s tax system, where income received
through platforms like Payoneer, Wise, and Barter often went undeclared.
With improved international tax cooperation and stronger digital monitoring, such
transactions will now be visible to the newly established Nigeria Revenue Service and the
Central Bank.
He explained, “If you’re a remote worker or digital hustler living in Lagos and earning $3,000
monthly from a U.S. company, the new law requires you to register with your state tax
authority, declare your income in naira, and pay taxes like every other Nigerian income
earner.
Iyeke, popularly known as @your_moneyguy on social media, told The PUNCH that the new
tax reform closes a long-standing loophole in Nigeria’s tax system, where income received
through platforms like Payoneer, Wise, and Barter often went undeclared.
He stated, “We’re working with several countries to open up legitimate avenues for our youth
to deliver outsourcing services from within Nigeria and participate in business process
outsourcing. There’s rising global demand for software engineers, and the Japanese
ambassador recently mentioned that Nigeria has become the first choice for Japanese firms
seeking tech talent.”
