Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, has announced that about 98 per cent of Nigerian workers will be exempted from Pay-As-You-Earn (PAYE) deductions when the new tax law becomes effective in January 2026.
Oyedele made this known during a session at the 31st Nigerian Economic Summit (NES31) in Abuja. He said the upcoming reforms aim to build a fair, inclusive, and transparent tax system that rewards productivity and protects citizens with low income.
“People whose income is below the poverty threshold will not pay personal income tax,” Oyedele said. “Those who earn more and have greater means will contribute more. That is how fairness works in a modern economy.”
READ ALSO: Tinubu’s Tax Reforms to Relieve Ordinary Nigerians from January – Oyedele
According to Oyedele, the new structure will support low-income earners and small businesses. He explained that the government plans to introduce tax-exempt stickers for nano and micro enterprises such as artisans, street vendors, and petty traders.
“We want to protect small operators from unnecessary harassment by local and state government officials,” he said. “They should be allowed to focus on growing their businesses.”
He added that these exemptions will give smaller enterprises room to thrive, expand, and create more jobs.
Oyedele said the reforms will reduce economic inequality and promote trust in government. He noted that revenue collection must go hand in hand with accountability.
“The more inequality you create, the more instability you invite,” he said. “Our goal is to ensure that people see where their taxes go and benefit from them.”
He explained that the reforms align with President Bola Tinubu’s fiscal policy agenda, which seeks to improve Nigeria’s credit rating, reduce borrowing costs, and encourage private-sector investment.
READ ALSO: Tax Law: Investors will Gain N150m annually from CGT – Oyedele
Oyedele, who admitted that the process has not been easy, revealed that he has received threats due to his role in leading the reform committee.
“Reform is not easy,” he said. “I have faced threats and intimidation, but I am not afraid. These reforms belong to Nigerians, not to me or any political leader.”
He stressed that the objective is to create a system where wealthy individuals and large corporations contribute more to national growth.
“If we refuse to pay taxes properly, we will pay them indirectly through inflation and economic hardship,” he warned.
Responding to concerns that state and local governments might resist the reform, Oyedele said all 36 states and the Federal Capital Territory were represented in the discussions through the Joint Tax Board (JTB).
He stated that the new structure will not reduce state revenue. Instead, it will increase allocations from the Federation Account and improve efficiency in tax collection.
“Last year, the states generated ₦3.36 trillion in taxes,” he said. “Under this new framework, no state will be bankrupt. We can protect low-income citizens and still grow our revenue.”
Oyedele criticised several existing tax laws, calling them outdated and regressive. He cited examples such as the so-called ‘wheelbarrow tax’, which unfairly targets small traders.
“Some of our laws date back decades and no longer fit today’s reality,” he said. “That’s why we have submitted ten amendment proposals to the National Assembly to modernise and simplify our tax system.”
READ ALSO: Tax Committee Engages Journalists, Public Analysts to Clarify Misconceptions
He also confirmed that the committee is working on expenditure reforms to ensure that all collected revenues are used prudently and transparently.
Oyedele reaffirmed that the goal of the reforms is to create a fair, simple, and efficient tax system that promotes growth, equity, and trust between citizens and government.
“These reforms are not about punishment,” he said. “They are about fairness, stability, and ensuring that everyone contributes according to their ability while protecting those who struggle the most.”
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
