President Bola Tinubu has signed new tax laws that exempt low-income earners in Nigeria from paying income tax.
The policy specifically targets individuals earning less than ₦250,000 per month, classifying them as economically vulnerable.
The announcement was made by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during an appearance on Channels Television’s Politics Today.
The reforms are part of a broader effort to overhaul Nigeria’s tax system, enhance compliance, and shield the poor from the tax net.
According to Oyedele, the committee studied the cost of living and poverty benchmarks across the country. They estimated that a typical household of five, supported by two earners making ₦120,000 to ₦130,000 each, would barely meet basic needs without affording luxuries.
“If the earnings are about ₦250,000, they can take care of themselves. Of course, they are not going to have luxury, but at least they can take care of themselves. They are poor, and they shouldn’t pay taxes,” he explained.
This new benchmark means anyone earning ₦1 million or less annually, including allowances, is now officially tax-exempt.
Oyedele emphasized that this tax exemption is designed not to hand out cash, but to ensure that the government does not take away from those who have the least.
“This tax law will not give you cash in your pocket, but at least it won’t take your cash away if you are poor,” he said.
For higher-income earners—specifically those making between ₦1.8 million and ₦2 million monthly (about 5% of the population)—taxes will still apply, but the rates are expected to be adjusted downward under the new tax regime.
When Does This Tax Reform Take Effect?
The new tax laws are scheduled to come into effect in January 2026, giving businesses and individuals ample time to adjust to the new framework.
