The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has assured that the Tinubu administration is not increasing taxes on Nigerians but is instead reducing the burden through reforms designed to support workers and businesses, especially SMEs.
Speaking on national television, Oyedele said the government's priority is to simplify the system, grant relief to individuals, and ease pressure on enterprises.
From January, Nigerians earning ₦100,000 or less monthly will be exempt from personal income tax, while even middle-income earners will enjoy reductions. "Only very high-income earners will pay slightly more so that the vulnerable are protected," he explained.
Small businesses also stand to gain. The exemption threshold for corporate income tax has been raised from ₦25 million to ₦100 million in annual turnover, meaning enterprises that make up to ₦100 million will now pay zero corporate income tax.
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Other reliefs have been introduced to boost disposable income and lower costs. Workers can now deduct 20 per cent of annual rent before tax, while pension contributions, insurance, and housing savings also reduce taxable income.
For SMEs, reforms to Value Added Tax (VAT) mean that essential goods like food, water, education, and healthcare will not attract VAT. Importantly, producers can now claim refunds on VAT incurred during production. "Bakers, for instance, will not only sell bread tax-free but also get refunds on VAT paid on inputs like sugar, flour, and fuel, which translates into lower costs," Oyedele said.
The reforms also target the elimination of multiple taxation, which has long frustrated small businesses. Nigeria's over 60 levies — including minor taxes like bicycle and radio levies — are being harmonised into fewer than 10. This, Oyedele said, will end harassment and ease compliance.
He stressed that the reforms are about harmonisation, simplification, and relief, not introducing new taxes. "About 97 to 98 per cent of Nigerians will either pay no tax or less tax under the new law. The goal is to grow businesses, protect workers, and expand prosperity," he said.
