Nigerian Workers Experience Immediate Financial Relief Under New Tax Regime
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has confirmed that Nigerian workers are already benefiting from higher take-home pay following the implementation of new tax laws. This development marks a significant shift in the country's fiscal landscape, with employees across various sectors reporting tangible improvements in their January 2026 salaries.
Early Feedback Shows Reduced PAYE Deductions
According to Oyedele, who shared this update via a post on X on Monday, January 26, 2026, numerous workers have verified that their deductions under the Pay-As-You-Earn (PAYE) system have decreased substantially. This reduction has directly translated to increased net earnings for employees nationwide, providing much-needed financial relief amid economic challenges.
Oyedele stated: "We are pleased to note the feedback from workers who have received their salaries for January 2026 and confirmed a reduction in their PAYE tax resulting in higher take-home pay under the new tax laws."
The chairman emphasized that these early results demonstrate the effectiveness of the recently enacted tax reforms, which were specifically designed to alleviate financial pressures on workers and stimulate economic activity through increased disposable income.
Comprehensive Stakeholder Engagement Planned
While celebrating these initial successes, Oyedele stressed the importance of thorough stakeholder engagement to ensure proper implementation across all organizations. The committee is actively collaborating with the Joint Revenue Board to organize comprehensive sessions with key industry players.
These planned engagements will bring together:
- Human Resources directors
- Payroll managers
- Chief Financial Officers
- Tax professionals and consultants
The objective is to address potential implementation challenges, clarify provisions, and ensure uniform application of the new tax framework throughout Nigeria's corporate landscape.
Broad Impact of Tax Reform Framework
The federal government's comprehensive tax reform initiative, anchored on the Nigerian Tax Act (NTA) and the Nigerian Tax Administration Act (NTAA), aims to achieve multiple objectives:
- Simplify the overall taxation system
- Reduce administrative burdens on both workers and businesses
- Eliminate multiple taxation practices
- Promote greater equity in tax collection
- Boost disposable income nationwide
Under the new regime, approximately 98% of Nigerian workers are projected to pay either reduced PAYE tax or no tax at all. Furthermore, about 97% of small businesses will enjoy exemptions from corporate income tax, Value Added Tax (VAT), and withholding tax requirements.
Large corporations are also expected to benefit from lower overall tax obligations, creating a more favorable business environment that could potentially stimulate investment and economic growth.
Tax Exemptions and Special Provisions
The new tax legislation includes specific exemptions designed to protect vulnerable income groups. Individuals earning below N800,000 annually now enjoy complete exemption from personal income tax, ensuring that low-income workers retain their full earnings.
Additionally, the law provides complete tax exemption for salaries and wages earned by military personnel, recognizing their unique service to the nation. These provisions reflect the government's commitment to creating a more equitable and progressive tax system that considers different socioeconomic realities.
The tax reforms officially took effect in January 2026, despite ongoing discussions and concerns regarding certain aspects of the implementation process. The early positive feedback from workers suggests that the reforms are beginning to achieve their intended purpose of putting more money in the pockets of Nigerian citizens.
