ABUJA — Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has described the recently signed tax laws by President Bola Tinubu as “pro-poor,” stressing that they are designed to alleviate the burden on low-income earners and small business owners across Nigeria.
Speaking with State House correspondents in Abuja on Thursday, Oyedele highlighted key aspects of the reforms, which include significant exemptions from various tax obligations. He said that more than one-third of workers in both the private and public sectors will now be exempted from paying Pay-As-You-Earn (PAYE) tax.
“They will not have to pay personal income tax,” Oyedele announced. “Small businesses—over 90 percent of micro, small, and nano enterprises—will no longer have to worry about paying corporate income tax, charging VAT, deducting withholding tax, or paying PAYE for their employees.”
According to him, the overarching aim of the reforms is to “leave more money in the hands of the ordinary Nigerian to take care of their daily needs.” He revealed that the reforms introduce a new zero-rated VAT framework on essential goods and services.
“Any traces of VAT in food, education, medical and healthcare have now been completely removed, so we should expect the prices of those items to come down,” Oyedele said.
He further explained that the exemption of VAT on key household expenditure categories such as transportation, accommodation, and housing—areas which collectively account for more than 80 percent of average household spending—represents a major relief for many Nigerians.
“This is a huge relief for the everyday Nigerian who is struggling with rising living costs,” he added.
In addition to tax exemptions, Oyedele noted that the reforms also address long-standing inefficiencies in tax collection and reporting. “Provisions have been made to help us improve efficiency in how we collect taxes, and ensure greater transparency in how those taxes are utilised,” he said, pointing to better alignment between taxation and public service delivery.
Meanwhile, Executive Chairman of the National Revenue Service (formerly the Federal Inland Revenue Service), Zacch Adedeji, confirmed that the implementation of the new tax laws will commence on January 1, 2026.
He explained that the delay is intentional to allow adequate time for planning, stakeholder education, and alignment with the government’s fiscal calendar.
“Based on global best practices, reforms of this scale require time for stakeholders—both regulators and operators—to adjust. That’s why, with the support of the National Assembly and Mr. President, we’ve agreed on an effective date of January 1, 2026, by the special grace of God,” Adedeji said.
He emphasised that launching the reforms at the beginning of a new fiscal year ensures smoother integration with budgeting frameworks and reduces disruption to economic activity.
The newly signed laws have already garnered positive reactions from economic stakeholders, with organisations like the Nigeria Employers’ Consultative Association (NECA) and the Lagos Chamber of Commerce and Industry (LCCI) noting that the reforms could spur economic growth and enhance Nigeria’s global competitiveness.
As the clock starts ticking toward the 2026 rollout, government agencies are expected to begin sensitisation and capacity-building efforts to prepare citizens, businesses, and administrators for the transition to the new tax regime.
