Taiwo Oyedele, chairman of the Fiscal Policy and Tax Reform Committee, has reaffirmed the objectives of the tax reforms introduced by President Bola Tinubu.
He said the reforms are people-centered, growth-focused, and efficiency-driven, and they aim to reduce the tax burden on most Nigerians while modernizing and simplifying the tax system.
Oyedele acknowledged that tax reforms are often misunderstood, but warned that deliberate misreporting and uninformed analysis harm the public interest. He emphasized that the reforms are designed to benefit ordinary Nigerians, support long-term economic stability, and promote inclusive growth.
Key points from the committee:
Low-income earners are exempted from tax. The average citizen will pay less tax, not more.
High-income earners (roughly the top 3% of the population) will pay progressive rates up to 25% of income.
Businesses will save costs through harmonization, broader input tax credits, faster refunds, lower withholding tax rates, and a planned reduction in the corporate tax rate.
Small companies with annual turnover of N100 million or less are exempt from corporate income tax, from charging VAT, and from withholding tax obligations to encourage formalization and growth.
The reforms aim for a simpler, fairer, and more growth-friendly system that levels the playing field and reduces tax evasion.
Oyedele encouraged Nigerians to seek credible information and engage constructively. “These reforms are designed to benefit all Nigerians. Let us work together to ensure effective implementation and position ourselves for the better days ahead,” he said.
Next Steps
The committee will work with implementing agencies to ensure a robust, transparent rollout. It plans continuous engagement to gather feedback, address concerns, and ensure a smooth transition. The committee also noted that public awareness can sometimes create the false impression that a requirement is new when it is not.
Key Highlights of the New Tax Laws
Personal Income Tax: Low-income earners, including those at the national minimum wage, are exempt. Average earners will generally pay less. High-income earners (about the top 3%) will contribute progressively more, up to 25%—lower than top rates in several other countries.
Value-Added Tax (VAT): Businesses will have broader input credits on assets and overheads to lower costs. Basic items like food, education, and health services are zero-rated; rent and transportation are exempt. Small businesses are not required to charge VAT, reducing burdens on nano, micro, and small enterprises and lowering consumer prices.
Tax Identification (Tax ID): A Tax ID is required for opening or operating bank accounts used for income-generating or business purposes. This harmonizes existing Tax Identification Numbers (TINs) and is not a new physical ID. The TIN requirement for business accounts stems from the 2020 Finance Act and has been in effect since January 13, 2020. Reporting of certain quarterly bank transactions does not mean automatic taxation of all inflows.
Informal Sector: Small companies with annual turnover of N100 million or less are exempt from corporate tax, VAT collection, and withholding tax accounting. The aim is to encourage formalization by offering relief and incentives rather than penalties.
Tax Harmonization: The reform seeks to reduce more than 60 taxes and levies to fewer than 10, simplifying compliance and reducing multiple charges. Several previously introduced levies have been reversed or suspended (e.g., the 5% levy on airtime and data, cybersecurity levy on bank transfers, carbon tax on single-use plastics, and excise tax on vehicles).
No New Taxes on Previously Untaxed Individuals: The laws did not introduce taxes for groups that were previously untaxed. Activities such as content creation, influencer income, and virtual asset income were already subject to tax under the old Personal Income Tax Act. The new laws provide clarity and fairness, including allowing deductions for losses where applicable. Gifts (not payments for services or transactions) are not taxable.
The committee reiterated that the reforms are about fairness, efficiency, and simplicity—ensuring the tax system supports investment, job creation, and sustainable growth.
Tax Reform Is Not Imposing New Taxes on People — Oyedele
Taiwo Oyedele, chairman of the Fiscal Policy and Tax Reform Committee, has reaffirmed the objectives of the tax reforms introduced by President Bola Tinubu.
He said the reforms are people-centered, growth-focused, and efficiency-driven, and they aim to reduce the tax burden on most Nigerians while modernizing and simplifying the tax system.
Oyedele acknowledged that tax reforms are often misunderstood, but warned that deliberate misreporting and uninformed analysis harm the public interest. He emphasized that the reforms are designed to benefit ordinary Nigerians, support long-term economic stability, and promote inclusive growth.
Key points from the committee:
Low-income earners are exempted from tax. The average citizen will pay less tax, not more.
High-income earners (roughly the top 3% of the population) will pay progressive rates up to 25% of income.
Businesses will save costs through harmonization, broader input tax credits, faster refunds, lower withholding tax rates, and a planned reduction in the corporate tax rate.
Small companies with annual turnover of N100 million or less are exempt from corporate income tax, from charging VAT, and from withholding tax obligations to encourage formalization and growth.
The reforms aim for a simpler, fairer, and more growth-friendly system that levels the playing field and reduces tax evasion.
Oyedele encouraged Nigerians to seek credible information and engage constructively. “These reforms are designed to benefit all Nigerians. Let us work together to ensure effective implementation and position ourselves for the better days ahead,” he said.
Next Steps
The committee will work with implementing agencies to ensure a robust, transparent rollout. It plans continuous engagement to gather feedback, address concerns, and ensure a smooth transition. The committee also noted that public awareness can sometimes create the false impression that a requirement is new when it is not.
Key Highlights of the New Tax Laws
Personal Income Tax: Low-income earners, including those at the national minimum wage, are exempt. Average earners will generally pay less. High-income earners (about the top 3%) will contribute progressively more, up to 25%—lower than top rates in several other countries.
Value-Added Tax (VAT): Businesses will have broader input credits on assets and overheads to lower costs. Basic items like food, education, and health services are zero-rated; rent and transportation are exempt. Small businesses are not required to charge VAT, reducing burdens on nano, micro, and small enterprises and lowering consumer prices.
Tax Identification (Tax ID): A Tax ID is required for opening or operating bank accounts used for income-generating or business purposes. This harmonizes existing Tax Identification Numbers (TINs) and is not a new physical ID. The TIN requirement for business accounts stems from the 2020 Finance Act and has been in effect since January 13, 2020. Reporting of certain quarterly bank transactions does not mean automatic taxation of all inflows.
Informal Sector: Small companies with annual turnover of N100 million or less are exempt from corporate tax, VAT collection, and withholding tax accounting. The aim is to encourage formalization by offering relief and incentives rather than penalties.
Tax Harmonization: The reform seeks to reduce more than 60 taxes and levies to fewer than 10, simplifying compliance and reducing multiple charges. Several previously introduced levies have been reversed or suspended (e.g., the 5% levy on airtime and data, cybersecurity levy on bank transfers, carbon tax on single-use plastics, and excise tax on vehicles).
No New Taxes on Previously Untaxed Individuals: The laws did not introduce taxes for groups that were previously untaxed. Activities such as content creation, influencer income, and virtual asset income were already subject to tax under the old Personal Income Tax Act. The new laws provide clarity and fairness, including allowing deductions for losses where applicable. Gifts (not payments for services or transactions) are not taxable.
The committee reiterated that the reforms are about fairness, efficiency, and simplicity—ensuring the tax system supports investment, job creation, and sustainable growth.
