Tax reform exempts low earners, corrects misinformation — Presidency committee

Nigeria’s Presidential Committee on Fiscal Policy and Tax Reforms has defended the country’s new tax framework, saying recent claims that the reforms increase the burden on low-income earners are inaccurate and misrepresent the law’s provisions.

The committee, chaired by Taiwo Oyedele, said the revised tax system, which took effect on January 1, 2026, was designed to protect vulnerable Nigerians while improving revenue collection and compliance among higher earners.

Low-income earners exempt under new tax structure

According to the committee, individuals earning at or around the national minimum wage are now exempt from paying personal income tax under the revised framework.

The new tax structure places taxable income up to approximately ₦800,000 within a zero per cent bracket, meaning workers within this range will not be required to pay income tax. Only earnings above this threshold are subject to graduated tax rates.

Officials said the reform represents targeted relief rather than an increased burden, noting that the policy aims to shield lower-income groups while expanding the tax base among individuals and businesses with greater earning capacity.

The changes also extend relief to small businesses. Companies with annual turnover of up to ₦100 million now qualify as small businesses and are exempt from Company Income Tax, a move intended to ease financial pressure on micro, small, and medium enterprises.

Committee dismisses claims of new taxes on bank funds, building materials

The committee’s response follows criticism from former Minister of Transport, Rotimi Amaechi, who had suggested that the new tax laws would increase the burden on low-income earners.

In response, Oyedele said claims that the tax reform introduced a 25 per cent levy on building materials, bank balances, or construction-related transactions were false.

“We are aware of a recent video claiming that the new tax laws will commence in 2027 and alleging the imposition of a 25 per cent tax on funds for building materials and other transactions. Both claims are incorrect,” he said.

He clarified that the Nigeria Tax Act 2025 has already taken effect and does not impose taxes on money held in bank accounts, transfers for building materials, or general construction costs.

Instead, the committee said the reforms include measures aimed at improving housing affordability, supporting the manufacturing of building materials, and providing rent relief to tenants in order to improve disposable income.

Officials said the broader objective of the reform is to create a progressive tax system that protects vulnerable citizens, supports small businesses, and strengthens Nigeria’s fiscal sustainability.

The committee added that while policy debates are important in a democracy, public discussions should be based on verified facts, noting that the new tax framework is intended to reduce, not increase, the tax burden on low-income Nigerians.

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