End of ‘Taxing Poverty’: Millions of Workers Get Major Income Break |

The Federal Government has unveiled sweeping tax reforms that could exempt nearly one-third of Nigeria’s workforce from paying personal income tax, marking one of the most ambitious fiscal shifts in recent years and a clear attempt to ease mounting cost-of-living pressures.

Under the proposed framework, workers earning N100,000 or less per month across the public and private sectors will no longer be liable for personal income tax beginning January next year.

Officials say the policy is designed to put more money directly into the pockets of low-income earners, strengthen household purchasing power and provide relief to Nigerians grappling with rising inflation.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, described the move as a decisive break from what he termed a long-standing culture of “taxing poverty.” Speaking with Journalists in Lagos, Oyedele said the exemption would affect roughly one in every three workers Nationwide.

“These are Nigerians who are barely surviving, yet we still tax them,” he said. “Instead of taxing people who cannot meet their basic needs, we should be supporting them.”

According to Oyedele, the policy is part of a broader overhaul of Nigeria’s tax architecture, much of which he noted is rooted in colonial-era laws that no longer align with today’s economic realities.

He argued that several countries that once operated similar systems have since abandoned or restructured them after recognising their negative impact on growth, productivity and investment.

Beyond low-income earners, the reforms are also set to ease the burden on middle-income workers. Nigerians earning between N100,000 and about N2 million per month will pay less tax under the new regime, effectively boosting disposable income without salary increases. Oyedele rejected claims that Nigeria’s middle class has vanished, insisting it remains vital to economic stability.

“If you destroy the middle class, you weaken consumption, savings and long-term growth,” he warned.

High-income earners will bear a slightly increased share of the burden. Only about two per cent of Nigeria’s workforce, Oyedele said, falls into this category. A top personal income tax rate of 25 per cent will apply exclusively to individuals earning N120 million or more annually, a measure he described as modest, targeted and aimed at restoring balance rather than punishing success.

The reforms also tackle Nigeria’s notoriously complex business taxation system. Despite ranking among the world’s top 10 countries with the heaviest tax burden on businesses, Nigeria remains in urgent need of investment to drive job creation.

To address this, the Government has reduced corporate income tax from 30 per cent to 25 per cent, while small businesses with annual turnover below N100 million will now pay zero corporate tax.

Oyedele said these steps are intended to encourage informal businesses to formalise, expand operations and gain access to credit.

He also pledged to address multiple taxation, the proliferation of tax-collecting agencies and the role of non-state actors that have made compliance costly and prone to abuse.

Several existing tax laws, he said, will be repealed and replaced with a streamlined, transparent framework.

Warning against misinformation, Oyedele dismissed rumours about inheritance taxes and exaggerated claims of widespread tax hikes.

“People are entitled to informed opinions, not ignorance,” he said, stressing that the reforms are rooted in fairness, inclusion and long-term growth.

Linking inequality to rising social tensions, Oyedele argued that taxing the poorest in an unequal society only fuels resentment.