The Federal Government has announced plans to exempt about 98 percent of Nigerian workers from paying Pay-As-You-Earn (PAYE) tax under new legislation set to take effect in January 2026.
Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, made the disclosure while addressing the ongoing 31st Nigerian Economic Summit (NES31) in Abuja.
He explained that the reforms are aimed at protecting low-income earners and citizens living near the poverty line while creating a more equitable and efficient tax system.
“The more inequality you create, the more time bombs you have,” Oyedele said. “These reforms are intended to strengthen governance around revenue generation, improve accountability, and ensure tax revenues are effectively utilised.”
He added that the reforms form part of President Bola Tinubu’s broader fiscal policy agenda, which seeks to boost Nigeria’s sovereign credit rating, lower borrowing costs for both government and businesses, and encourage private-sector investment.
Oyedele also revealed that leading the reform process has involved personal risks, including death threats. “Reform is tough. I have faced threats, but I am not afraid. I recently celebrated my 50th birthday, and even if anything happens, I have done my part. These reforms belong to Nigerians, not to Mr. President,” he stated.
The initiative is designed to ensure that wealthy individuals and large corporations contribute more to national development. Oyedele stressed the importance of orderly tax payment, warning that excessive money printing in recent years has contributed to inflation and naira devaluation. “We do not want to repeat mistakes seen in countries like Zimbabwe, where prices double frequently,” he said.
Under the new tax framework, low-income Nigerians will be fully exempted from personal income tax, while high-net-worth individuals will face higher rates. Small and low-income businesses will also receive tax relief to strengthen their operations and create jobs. “We are considering tax-exempt stickers for nano businesses to protect street vendors, petty traders, and artisans from harassment,” Oyedele added.
He assured that state and local governments, represented through the Joint Tax Board, support the reforms. He explained that the new system will not reduce state revenue but will enable them to earn more from the Federation Account without burdening vulnerable citizens.
Citing improvements in national revenue distribution as evidence of progress, Oyedele criticized outdated and regressive levies such as the so-called “wheelbarrow tax.” He revealed that the committee has submitted ten amendment proposals to the National Assembly to modernize the tax system.
Finally, Oyedele emphasized that expenditure reforms are ongoing to ensure tax revenues are used efficiently and transparently, creating a simple, fair, and growth-oriented tax system that distributes the burden fairly across all segments of society.