FG’s New Tax Law To Exempt 98% Of Nigerian Workers From PAYE Tax – Oyedele

The Federal Government has announced that about 98% of Nigerian workers will be exempted from paying Pay-As-You-Earn (PAYE) tax under the country’s new fiscal and tax reform laws, scheduled to take effect from January 2026.

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, made this disclosure during the 31st Nigerian Economic Summit (NES31) held in Abuja on Tuesday.

According to Oyedele, the new tax framework is designed to protect low-income earners and improve fairness and efficiency in the tax system. The reforms aim to reduce inequality while strengthening fiscal governance, accountability, and sustainable revenue generation.

He stated that the government recorded significant tax revenue growth in 2024 and is working to lower corporate income tax rates from 30% to 25%, in line with the administration’s broader fiscal reform agenda.

“When inequality widens, it creates an economic time bomb. These reforms will help Nigeria strengthen fiscal stability, improve accountability, and ensure that tax revenues are well utilized,” Oyedele said.

He emphasized that the reforms would also enhance Nigeria’s sovereign credit rating, reduce borrowing costs for both the government and private sector, and encourage domestic and foreign investment.

Oyedele explained that the reform process was inclusive and participatory, involving consultations with stakeholders across all sectors, including farmers, persons with disabilities, and Nigerians in the diaspora.

“We made sure no group was left behind. Every state participated in the reform discussions, and we co-created practical solutions,” he added.

He commended President Bola Tinubu for supporting an implementation-driven approach, allowing the committee not only to design but also to execute the reforms.

“This committee is unique because we’re part of the implementation process, not just policy drafting. Our next focus is on public sensitization, capacity building, and effective rollout of the new tax laws,” he said.

Oyedele further stated that the new system will broaden Nigeria’s tax base, improve compliance, and promote fairness by ensuring that those with the ability to pay contribute equitably, while shielding the most vulnerable groups from excessive taxation.