Nigeria, Kenya & The 5 Stingiest Tax-Free Floors In Africa

Nigeria’s new personal income tax exemption bracket seems a step forward, but it still ranks among the continent’s lowest.

As Nigeria rolls out its 2025 tax reforms, the headline figure that stands out is an exemption for annual taxable income up to NGN 800 K (roughly USD 520.00 per year, or USD 43.00 per month) from personal income tax.

That reform, meant to ease pressure on low-income earners, nudges Nigeria’s threshold upward, yet a regional comparison reveals how little breathing room African workers still have before the taxman comes knocking.

Below, we break down five of the lowest tax-free income thresholds in Africa, based on official 2024–2025 tax tables and market FX rates as of October 2025.

Kenya — Practically no tax-free band

Kenya’s PAYE schedule applies a 10% rate to the first KES 288 K of annual taxable income (i.e KES 24 K per month), meaning no explicit 0% bracket.

Employees do get a small personal relief (KES 2.4 K/month), but it’s a credit, not a true exemption. Kenya’s system pulls low-income earners into the tax net sooner than almost anywhere else in Africa.

Even with that relief, low-wage workers start paying tax earlier than peers in countries with genuine zero-rate bands.

Ethiopia — A token threshold

After years of criticism, Ethiopia raised its tax-free monthly allowance from ETB 600.00 to ETB 2 K in mid-2025, equivalent to just ETB 24 K per year, or about USD 164.00 per year.

It’s a technical improvement, but still barely a safety net in one of Africa’s most inflation-stressed economies.

Nigeria — NGN 800 K per year under new reforms

The new reform lifts Nigeria’s explicit exemption to NGN 800 K per year, after allowable reliefs and deductions.

Converted, that’s around USD 520.00 per year, not far above Ethiopia’s, and far below middle-income peers like South Africa or Morocco.

Even after reform, Nigeria’s tax-free floor equals roughly one month’s minimum wage in some peer economies.

Uganda — UGX 2.82 M/year (~USD 810.00)

Uganda’s tax laws set a tax-free annual floor of UGX 2.82 M for resident individuals; income beyond that is taxed in bands starting at 10%.

Egypt — EGP 40 K/year (~USD 840.00)

Egypt’s personal income tax system grants a 0% slab on the first EGP 40 K of taxable annual income. Some other sources also note a salary exemption of EGP 20 K in specific contexts.

Why these floors matter

For millions of wage earners, the tax-free threshold is the difference between people having disposable income and being taxed before their basic needs.

When that floor is extremely low (or non-existent, like Kenya), workers start contributing to government coffers almost immediately. It deepens pressure on consumption, constrains savings, and widens inequality, especially in economies with weak social safety nets.

Raising these thresholds, or indexing them to inflation, is often a political hot potato. But with food, rent, and fuel costs still climbing, the real debate may no longer be about “broadening the tax base,” but ensuring it begins where subsistence ends.

On the flip side, not every African taxpayer starts the year on the back foot

A few African nations anchor their tax systems with much higher zero bands. Mauritius lets workers earn up to MUR 390 K per year tax-free (~USD 8.4 K), while South Africa’s base exemption (for under-65 taxpayers) is ZAR 95.75 K per year (≈ USD 5.56 K).

Morocco now offers MAD 40 K per year (~USD 4.32 K). Namibia’s zero band is NAD 50 K (USD 2.7 K), while Zambia’s first ZMW 5.1 K per month (ZMW 54 K/year; or ~USD 2.45 K) is taxed at 0%.

Those floors reflect different trade-offs in revenue structure, service delivery, and tax effort, and set a ceiling for how low some governments can go before political pressure forces upward adjustment.