CRA Is Gone — What Replaces It Under NTA 2025

The End of CRA

For over two decades, the Consolidated Relief Allowance (CRA) was the primary way Nigerian taxpayers reduced their taxable income. Under the old PITA, CRA gave you:

₦200,000 OR 1% of gross income (whichever was higher), plus

20% of your gross income

For someone earning ₦5,000,000:

CRA = ₦200,000 + ₦1,000,000 = ₦1,200,000 in relief

As of January 1, 2026, CRA no longer exists. The Nigeria Tax Act 2025 abolished it entirely^[1].

What Replaced CRA?

Two things work together to replace CRA:

1. The ₦800,000 Tax-Free Band (0% Bracket)

The first ₦800,000 of chargeable income is taxed at 0%. This is built directly into the tax brackets^[2].

In effect: Every taxpayer gets ₦800,000 of income tax-free, automatically. No calculation needed, no form to fill.

2. Rent Relief

A new relief specifically for people who pay rent^[3]:

20% of annual rent paid

Maximum: ₦500,000

Whichever is lower

Requirements:

You must actually pay rent

You must have evidence (tenancy agreement, rent receipts, bank transfer records)

Homeowners who don't pay rent get no Rent Relief

Old System vs. New System: Side by Side

For a ₦5,000,000 earner paying ₦1,500,000 rent:

Old System (PITA with CRA):
StepAmount

Gross income₦5,000,000
CRA (₦200K + 20% of ₦5M)-₦1,200,000
Taxable income₦3,800,000
Tax (old brackets: 7% to 24%)~₦588,000

New System (NTA 2025):
StepAmount

Gross income₦5,000,000
Rent Relief (20% of ₦1.5M)-₦300,000
Chargeable income₦4,700,000
First ₦800K at 0%₦0
₦800K-₦3M at 15%₦330,000
₦3M-₦4.7M at 18%₦306,000
Total tax₦636,000

Difference: ₦48,000 more under the new system for this earner.

For a ₦2,000,000 earner paying ₦600,000 rent:

Old System: Tax ≈ ₦100,000
New System: Tax ≈ ₦60,000

Lower-income earners generally pay less under the new system.

Who Wins and Who Loses?

Winners (Pay Less Tax):

Low-income earners (under ₦4M) — the 0% bracket provides more relief than CRA did at these income levels

People with high rent relative to income — Rent Relief can be very effective

Everyone benefits from simplicity — no more complex CRA calculations

Neutral:

Middle-income earners (₦4M-₦10M) — roughly similar tax burden, depending on rent

People who rent at moderate levels — Rent Relief partially offsets CRA loss

Disadvantaged:

Homeowners who don't pay rent — they lose CRA and get no Rent Relief

High-income earners (₦25M+) — higher brackets (23%, 25%) and no CRA

People with very low or no rent — CRA was automatic, Rent Relief requires actual rent payments

What About Other Deductions?

CRA was the only relief that was abolished. Everything else remains deductible^[4]:

✅ Pension contributions (8% of qualifying income)

✅ NHF contributions (2.5% of basic salary)

✅ NHIS/health insurance premiums

✅ Business expenses (all legitimate business costs)

✅ Life insurance premiums

✅ Capital allowances on business equipment

These deductions reduce your chargeable income *before* the tax brackets are applied, making them even more valuable under the new system.

Practical Advice

Track your rent payments — If you pay rent, Rent Relief is your biggest automatic relief. Keep your tenancy agreement and payment records

Maximize deductions — With CRA gone, every business expense matters more. Track everything

Consider voluntary pension — 8% pension contributions are fully deductible and help you save for retirement

Don't use old calculators — Any tax calculator using CRA formulas is outdated. Use NTA 2025 brackets

Update Your Calculations

If you've been using spreadsheets or old tax formulas that include CRA, they're now incorrect. The new system is simpler:

Chargeable Income = Gross Income – Business Expenses – Pension – NHF – NHIS – Rent Relief

Then apply the 6 brackets: 0%, 15%, 18%, 21%, 23%, 25%.

TaxJeje automatically uses the new NTA 2025 rules — no CRA in sight.

Calculate Your Tax Under NTA 2025 →

---

References

References

1. KPMG Flash Alert - CRA Abolished Under NTA 2025
2. Fourth Schedule, Nigeria Tax Act 2025 - Tax brackets
3. Section 30(vi), NTA 2025 - Rent Relief provision
4. Section 30, NTA 2025 - Allowable deductions