Economy
Double Taxation Explained: Do Nigerians Abroad Pay Tax in Two Countries?
Under 2026 tax law, Nigerians abroad aren’t taxed on foreign income; only Nigerian-source income is taxable
The 2026 Nigerian tax reforms have clarified concerns about whether Nigerians living abroad could be taxed twice on their income.
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Key clarifications from the Presidential Fiscal Policy and Tax Reforms Committee:
1. Non-resident Nigerians are not taxed on foreign income. Income earned abroad without Nigerian ties is exempt.
2. Remittances, gifts, and personal transfers remain untaxed, preserving the flow of funds from diaspora Nigerians to families and communities.
3. Tax applies only to Nigerian-source income, including rental income, dividends from Nigerian companies, or local business profits.
4. Remote work for Nigerian companies may be taxable if income is derived from Nigeria.
5. Residency is determined by the 183-day rule, not citizenship. Non-residents are taxed only on Nigerian-source income.
6. Dual citizenship does not affect tax liability.
7. Double Taxation Agreements (DTAs) with countries like Canada, UK, France, South Africa, and others prevent the same income from being taxed in two jurisdictions.
8. Unilateral relief provisions apply where no treaty exists, protecting Nigerians abroad from double taxation.
9. Income already taxed abroad may claim relief under Nigerian law within the allowed timeframe.
10. Collective investment schemes are taxed at the scheme level; distributions are treated as dividends for unit holders.
The Nigeria Revenue Service (NRS) emphasizes that only income generated or derived in Nigeria is subject to tax. Transfers home, such as support for family, school fees, or community projects, do not create a tax liability.
Also read: CBN Forecasts Stronger Growth as Nigeria Stabilises Economy
This framework aligns Nigeria with international best practices, reducing uncertainty and reassuring diaspora Nigerians that their contributions to Nigeria are protected from unnecessary taxation.
Cash outside Nigerian banks rose to N4.92tn in September 2026 as Nigeria’s broad money supply increased to N146.6tn, CBN data show
Cash outside Nigerian banks rose to N4.92tn in September 2026, an increase of N48.73bn from the N4.87tn recorded in August, according to monetary data published by the Central Bank of Nigeria.
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The latest figures also showed an expansion in Nigeria’s broad money supply, which increased to N146.6tn in September from N139.09tn in the previous month.
The growth represents an increase of N7.51tn within one month, reflecting a broader expansion in the amount of money circulating across the economy.
The CBN data further showed that narrow money, which consists of currency in circulation and highly liquid deposits, rose to N44.05tn in September from N43.11tn in August.
Cash held outside banks refers to physical currency kept by individuals and businesses rather than within the banking system.
Broad money, by contrast, covers a wider range of monetary assets, including cash, demand deposits, savings and time deposits, as well as foreign currency deposits.
Nigeria’s broad money supply increased by 18.3 per cent between January and September, rising from N123.95tn to N146.6tn, the data indicated.
The latest increase followed the CBN’s decision in September to reduce its benchmark interest rate by 350 basis points, bringing it down from 26.5 per cent to 23 per cent.
The reduction was reported as the largest cut in the benchmark rate since December 2006.
Despite the rate cut, the Monetary Policy Committee retained the Cash Reserve Requirement for commercial banks at 45 per cent and merchant banks at 16 per cent.
The committee also maintained the 75 per cent reserve requirement on non-Treasury Single Account public-sector deposits.
The Cash Reserve Requirement determines the proportion of eligible deposits that banks must hold as reserves with the central bank.
It is one of the monetary policy tools used to influence banking-sector liquidity and credit conditions.
The rise in cash outside Nigerian banks formed part of the broader increase in money supply.
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However, the figures alone do not establish why households and businesses held more physical cash or how much of the increase was driven by spending, savings behaviour or other economic factors.
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