Since 1 January 2026, Nigerian musicians owe income tax on foreign earnings that used to be exempt when paid into a domiciliary account. The Nigeria Tax Act 2025 removed that carve-out but kept a separate exemption for foreign royalties, and which rule your streaming money falls under is now the costliest question in an artist’s paperwork.
The exemption that ended
PITA means the Personal Income Tax Act, which section 196 of the new Act repealed. Item 30 of its Third Schedule exempted “income earned from abroad by an author, sportsman, playwright, musician, artist” if it was paid into a domiciliary account, a foreign-currency account at a Nigerian bank, per Taxaide.
PwC’s Nigeria tax summary, last reviewed in May 2026, is direct about the change: the new Act “no longer includes this exemption,” so resident musicians “must pay tax on their worldwide income.” Interest earned on domiciliary accounts is no longer exempt either.
The exemption that survived
Section 163(1)(s) of the gazetted Act still exempts any “dividend, interest, rent or royalty derived from outside Nigeria and brought into Nigeria through approved channels.” The Act defines a royalty as payment for the use of, or the right to use, “any copyright.”
A streaming payout for the use of your recordings fits that wording. The catch is section 4, which lists “profits or gains from any trade, business, profession or vocation” and “royalties” as separate kinds of income. A full-time artist’s catalogue income could be read either way, and the Act does not say which.
“Approved channels” is not defined in the Act. BusinessDay’s reading is that the rule reinforces “the role of regulated banks.” Money left offshore has not been brought into Nigeria at all, and a payout converted peer-to-peer is the hardest to defend.
What the new bands cost
If your payouts are taxed as professional income instead, the Fourth Schedule bands apply to taxable income:
- First ₦800,000: 0%
- Next ₦2.2 million: 15%
- Next ₦9 million: 18%
- Next ₦13 million: 21%
- Next ₦25 million: 23%
- Above ₦50 million: 25%
On ₦6 million of taxable income, the bill is ₦870,000, an effective rate of 14.5 percent. Nigerian artists generated more than ₦60 billion on Spotify alone in 2025, Music in Africa reported from Loud & Clear data, so the classification carries real money.
What to do with your catalogue this year
1. Get a Tax ID before your bank asks
The Nigeria Tax Administration Act makes banks ensure every taxable person provides one. It also requires every taxable person to file an annual return “whether or not liable to pay tax.”
2. Route royalties into a Nigerian bank
To claim section 163(1)(s), the cleanest record is a transfer from your distributor or a licensed payment provider into a regulated Nigerian bank account.
3. Keep statements that say “royalty”
DSP means digital service provider, the streaming platforms. A distributor statement that breaks each payout down by DSP, territory and track is your evidence that the money is copyright income. File it next to the matching bank credit.
4. Log tax already paid abroad
Section 120 lets a resident credit foreign tax against Nigerian tax on the same income, capped at the lower of the two. Keep every withholding certificate, including from US payers (see how US withholding hits Brazilian artists).
5. Check your residency
The Act treats you as resident if you are domiciled in Nigeria, keep a habitual abode or home available there, have substantial economic and family ties there, or spend 183 days there in 12 months. A London-based artist can still qualify.
Have an accountant confirm your classification before you file. This is a mechanism explainer, not tax advice.
Where distribution fits
Under the new Act, the artist who can show the source, territory and route of every payout has an exemption to argue. That is a reporting question, so ask any distributor, InterSpace Distribution included, for a sample royalty statement before you sign. For the wider payment picture, read how Nigerian artists get paid and how the dollar-to-naira rate shapes the business.
