Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has announced that under the newly implemented tax laws, Nigerian households with monthly earnings of ₦250,000 or less will be classified as poor and exempt from taxation.
Gatekeepers News reports that the announcement was made during an appearance on Channels Television’s Politics Today, shortly after President Bola Tinubu signed four new tax bills into law. Appointed by the President in July 2023, Oyedele reflected on his two-year term as chair of the tax reform committee, describing it as both eventful and challenging.
He emphasised that the primary goals of these new tax laws, which are set to take effect in January 2026, are not to increase tax burdens but to stimulate economic activity and identify tax evaders.
Oyedele further noted that these laws are designed to protect businesses and ensure the government does not impose taxes on poverty. He described the new regulations as efficiency-driven, growth-focused, and people-centric.
“This tax law will not give you cash in your pocket, but at least it won’t take your cash away if you are poor.”
He said nobody earning below ₦250,000 would have to pay taxes because they don’t even have enough.
“We have eliminated the tax component for people at the bottom, we have reduced for people at the middle, and we have increased slightly for people at the top.
“That middle, we estimated it at about ₦1.8 to ₦2m a month. If you are earning that amount and below, your tax will not be zero but it will reduce from what you are paying today,” he stated, noting that those who earn this amount are about 5% of the total Nigerian population.
The tax boss said to arrive at a decision, his committee debated the poverty line of an average Nigerian.
Oyedele said, “We debated this question; we said: ‘Who is a poor person in Nigeria?
“First, we started with data like the World Bank and the UN will tell you two dollars, fifteen cents a day per person means you are at the poverty line but there are people who do not earn two dollars a day but they are not poor because they produce the food that they eat and they do not pay for transportation. I lived and grew up in the village.
“So, we had to factor that in. We drew our own (poverty) line for Nigeria on the basis of an average of five people per family: two people working if they are lucky, taking care of the five.
“When we did the maths, it gave us an amount, and that was what we used in determining the income below which nobody should pay taxes.
“We came up with a ₦120,000 or ₦130,000 per two people working in a household of five. If the earnings are about ₦250,000, they can take care of themselves. Of course, they are not going to have luxury, but at least they can take care of themselves. They are poor, and they shouldn’t pay taxes.”
Oyedele stated that Nigeria currently collects only about 30% of what the country should be receiving in taxes, noting that the objective of the new tax laws is to close the 70% gap.
