Nigeria’s proposed tax reforms aim to ease the financial burden on low-income workers while reducing complexity for businesses, according to Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms.
In a series of posts on X (formerly Twitter) on Monday, Oyedele highlighted key aspects of the reforms, including an exemption from the Pay-As-You-Earn (PAYE) tax for workers earning the minimum wage or slightly above.
The move is designed to alleviate the tax load for the country’s lowest earners, in line with the administration’s policy of not taxing poverty.
Under the proposed reforms, the personal income tax rate for Nigerians earning over N1.5 million annually will increase, while those earning below N1.7 million per month will benefit from lower PAYE taxes.
The changes are expected to reduce the tax burden for approximately 98% of workers, while the top 2% of earners will face slightly higher rates, up to 25% for high-net-worth individuals.
In his remarks, Oyedele also outlined reforms aimed at easing the cost of living for Nigerians, including a 0% Value Added Tax (VAT) rate on food, education, healthcare, and exemptions for rent and public transportation—items that form a significant portion of household spending.
The reforms are designed to support the growth of Nigeria’s digital economy, particularly by facilitating remote work in the global business process outsourcing sector. Oyedele stated that self-employed individuals and entrepreneurs would also benefit from tax exemptions available to formal sector workers.
On the business front, Oyedele emphasized that the tax reforms would simplify the current complex system, reducing the burden on businesses and fostering investment. Key proposals include lowering the corporate income tax rate from 30% to 25% over the next two years, eliminating minimum tax requirements for loss-making companies, and increasing the corporate income tax exemption threshold to N50 million in annual turnover.
The reforms will also introduce a new tax ombudsman to address administrative issues and ensure that vulnerable taxpayers are protected, while tax incentives will be rationalized to create a more level playing field for investors.
Oyedele revealed that the reforms were developed after consultations with stakeholders across Nigeria, including government institutions, the private sector, civil society, and academic institutions.
The committee also conducted targeted sessions with more than 40 sectors, including youth and disability groups, to ensure the reforms were inclusive and reflective of the country’s economic needs.
The proposed changes are part of broader efforts to simplify the country’s tax system, increase compliance, and stimulate economic growth, Oyedele added.
