In a groundbreaking announcement that promises to reshape Nigeria's fiscal landscape, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has revealed that the vast majority of Nigerian workers will soon be free from personal income tax obligations.
Massive Tax Relief for Nigerian Workers
Approximately 98 percent of Nigeria's workforce will be completely exempt from paying personal income tax when the new tax regime becomes effective in January 2026. This revolutionary change was confirmed by Taiwo Oyedele during a recent public engagement where he outlined the committee's vision for a more equitable tax system.
The tax reforms chairman emphasized that the primary objective of these changes is to alleviate the financial pressure on low and middle-income earners while ensuring fairness across the economic spectrum. "The reforms are designed to ease the burden on low-income earners while ensuring equity in the system," Oyedele stated during his presentation.
Specific Exemption Thresholds Revealed
The committee has established clear income thresholds that will determine who qualifies for complete tax exemption. Any worker earning the current national minimum wage of N70,000 per month will be entirely exempt from personal income tax under the new system.
Remarkably, the exemption extends even further. Oyedele clarified that employees receiving slightly higher monthly incomes of up to N80,000 or N90,000 will also fall within the tax exemption bracket. This broader threshold ensures that not just minimum wage earners, but those in slightly better financial positions will benefit from the relief.
For higher income earners, the news comes with a different perspective. Only individuals earning above N2 million monthly will face an upward review in their personal income tax rates, indicating a progressive approach where the wealthiest Nigerians will shoulder a larger portion of the tax burden.
Small Businesses Receive VAT Exemption
Beyond individual tax relief, the reforms include significant incentives targeted at Nigeria's small business sector. Oyedele announced that enterprises with annual turnover not exceeding N100 million will be exempt from paying Value Added Tax (VAT) starting from 2026.
This VAT exemption represents a major boost for small and medium enterprises that have struggled with compliance costs and the administrative burden of tax collection. The move is expected to stimulate business growth, encourage formalization, and potentially create more employment opportunities across various sectors.
The comprehensive tax reform package, scheduled for implementation in January 2026, marks one of the most significant shifts in Nigeria's fiscal policy in recent years, potentially putting more disposable income in the hands of millions of Nigerians while restructuring the country's revenue collection framework.
