Tax Reforms: Nigerian workers report higher take-home pay in January 2026 under PAYE system
- Oyedele has said Nigerian workers are already receiving higher take-home pay following reduced PAYE deductions under the new tax laws
- He noted that the committee is partnering with the Joint Revenue Board to engage payroll and tax stakeholders to ensure proper implementation
- He said the reforms aim to simplify taxation, reduce burdens on workers and businesses, and increase disposable income nationwide
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has revealed that Nigerian workers are already seeing improvements in their take-home pay following the rollout of the new tax laws.
Oyedele shared this update in a post on X on Monday, January 26, 2026, referencing feedback from employees who received their January salaries.
Source: UGC
Workers report immediate gains from new tax regime
According to him, many workers confirmed that deductions under the Pay-As-You-Earn (PAYE) system have dropped, leading to higher net earnings.
He explained that the reduced PAYE reflects the early effects of the recently implemented tax reforms, which are aimed at easing the financial burden on workers.
He said:
“We are pleased to note the feedback from workers who have received their salaries for January 2026 and confirmed a reduction in their PAYE tax resulting in higher take-home pay under the new tax laws."
Stakeholder engagement planned to ensure proper tax implementation
While acknowledging the positive early responses, Oyedele stressed that further engagement is necessary to guarantee accurate and uniform application of the reforms across organisations.
To this end, the committee is collaborating with the Joint Revenue Board to organise stakeholder sessions.
These engagements will bring together HR directors, payroll managers, chief financial officers, and tax professionals to address implementation challenges and ensure compliance.
Oyedele noted that such collaboration is critical to preventing misinterpretation or inconsistent application of the new tax provisions.
The federal government recently commenced implementation of a comprehensive tax reform framework anchored on the Nigerian Tax Act (NTA) and the Nigerian Tax Administration Act (NTAA).
The reforms are intended to streamline the tax system, curb multiple taxation, promote equity, and boost disposable income.
Under the new regime, an estimated 98% of Nigerian workers are expected to pay either reduced PAYE tax or none at all, while about 97% of small businesses will be exempt from corporate income tax, VAT, and withholding tax.
Large corporations are also projected to benefit from lower overall tax obligations.
The tax laws officially took effect in January 2026, despite ongoing debates and concerns over alleged changes to the originally gazetted legislation.
Source: Twitter
Categories of salary earners exempt from paying tax
In related news, Legit.ng had highlighted certain groups of salary earners who are no longer required to pay income tax.
The law provides full tax exemption for individuals whose annual income falls below N800,000, ensuring that workers within this bracket are not subject to personal income tax.
In addition, salaries and wages earned by military personnel are completely exempt from taxation.
Source: Legit.ng
