FG Unveils Nigerians Exempted From Paying Income Tax as Enforcement Begins in January
- The Nigerian government has exempted millions of Nigerians from paying the newly introduced Personal Income Tax
- The government announced the new development, giving hope to low-income earners in the country
- The Personal Income Tax (PIT) was introduced by the Nigerian government and will begin in January 2026
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Federal Government has announced major personal income tax exemptions that will take effect from January, offering relief to millions of low-income earners as enforcement of Nigeria’s new tax reforms begins.
Under the reforms, individuals earning up to about N100,000 per month will no longer be required to pay personal income tax.
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The announcement was made by Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who said the changes are designed to reduce hardship, improve fairness, and reset the relationship between citizens and the tax system.
Who will no longer pay Personal Income Tax
Oyedele explained that the new law introduces a zero percent tax rate on the first N800,000 of taxable income.
This means that workers whose earnings fall within this threshold, after allowable deductions, will be fully exempt from personal income tax.
Using the current minimum wage benchmark of N70,000, he noted that tax liabilities for low-income workers would drop sharply.
He also cautioned Nigerians against confusing gross income with taxable income, stressing that statutory deductions and approved contributions are removed before tax is calculated.
Workers urged to verify take-home pay
Speaking at a workshop in Lagos, Oyedele encouraged employees to actively understand how the new tax system works.
He advised workers to use the official tax calculator to confirm their expected deductions and to challenge employers or accountants if their take-home pay does not reflect the promised relief.
According to him, transparency and awareness are central to ensuring the reforms deliver real benefits, especially for salary earners who have long complained about unfair deductions.
Higher earners to pay a fairer share
While low-income earners are exempted, the reforms increase tax obligations for higher-income individuals.
Oyedele said the changes are aimed at promoting fiscal equity by ensuring that those with greater capacity contribute more to national revenue.
According to a report by BusinessDay, Oyedele also highlighted efforts to bring more players in the informal sector into the tax net, describing formalisation as critical to expanding government revenue without overburdening the poor.
Business relief and investor-friendly measures
Beyond personal income tax, the reforms include measures to support businesses.
These include a reduction in corporate income tax and the introduction of value-added tax input credits, which are expected to lower operating costs and improve competitiveness.
Oyedele said these policies are part of a broader strategy to make Nigeria more attractive to investors and stimulate sustainable economic growth.
Stronger safeguards and a tax ombudsman
To address concerns about compliance and abuse, the reforms introduce stronger accountability measures.
A key innovation is the creation of the Office of the Tax Ombudsman, which will help resolve disputes, support self-assessment, and protect taxpayers from unfair treatment.
He said modernising tax administration and strengthening institutional capacity are essential to rebuilding trust in the system.
Capital markets, incentives, and suspended taxes
Oyedele disclosed that capital gains tax has been harmonised with income tax to close loopholes, while investors will enjoy specific exemptions under defined conditions.
These include reduced corporate income tax and withholding tax exemptions on dividends.
He also referenced the President’s recent executive orders suspending several levies, including excise duties on airtime and data, the cybersecurity levy, and the carbon tax on single-use plastics. Import duties on selected food items, pharmaceuticals, vehicles, and other charges were also suspended.
A broader economic reset
Oyedele described the reforms as more than tax cuts, calling them a reset of Nigeria’s economy and social contract.
Source: Twitter
He urged stakeholders to study the new laws carefully, counter misinformation, and position themselves to benefit from emerging opportunities in capital markets and other growth sectors.
FG sends message to banks on TIN on personal accounts
Legit.ng earlier reported that the Federal Government has sent a clear signal to Nigeria’s banking sector as part of sweeping tax reforms scheduled to take effect from January 1, 2026.
Under the new framework, banks will be required to request a Tax Identification Number from all taxable Nigerians operating bank accounts, a move that could affect millions of account holders nationwide.
The directive was confirmed by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who disclosed the details in an interview shared on his official X account.
Source: Legit.ng
