Nigerians who earn less than ₦250,000 monthly will no longer be required to pay income tax, according to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms. He made this known on Politics Today, a Channels Television programme, shortly after President Bola Tinubu signed four new tax bills into law on Thursday.
Oyedele explained that households earning ₦250,000 or less per month are now officially classified as poor. He emphasised that the new tax laws, set to take effect in January 2026, are not aimed at raising taxes but rather at boosting economic activity and improving tax compliance across the country.
Appointed in July 2023, Oyedele described his tenure so far as both challenging and impactful. He said the reforms are designed to protect low-income earners and businesses, ensure the government doesn’t “tax poverty,” and make the tax system more efficient, growth-driven, and people-oriented.
“This law won’t put money in your hands, but at least, if you’re poor, it won’t take money away from you,” he said.
Oyedele clarified that individuals earning less than ₦250,000 monthly won’t be taxed because their income is insufficient for taxation. “We’ve removed tax for those at the bottom, reduced it for those in the middle, and slightly increased it for those at the top,” he explained.
He noted that middle-income earners—defined as those making between ₦1.8 million and ₦2 million monthly—will see a tax reduction. This group makes up about 5% of the Nigerian population, he said.
To determine the income threshold for tax exemption, the committee debated Nigeria’s poverty line. Oyedele explained that while international benchmarks like the World Bank’s $2.15-per-day metric were considered, local realities had to be factored in.
“In Nigeria, some people may earn less than $2 a day but aren’t necessarily poor because they grow their own food or don’t pay for transport,” he said, drawing from his personal experience growing up in a village.
Using a model of an average household of five people supported by two working adults, the committee calculated that households earning ₦120,000–₦130,000 monthly are struggling. Thus, ₦250,000 was set as the reasonable cutoff for tax exemption.
Oyedele also revealed that Nigeria currently collects only about 30% of its potential tax revenue, meaning a 70% shortfall. The new tax laws aim to close this gap by improving efficiency and targeting evasion, rather than burdening the poor.
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