In a significant proposal aimed at alleviating the economic burden on low-income earners, Taiwo Oyedele, the astute chairman of Nigeria’s Presidential Fiscal Policy and Tax Reforms Committee, has advocated for a sweeping exemption from personal income tax for Nigerian households earning N250,000 or less per month. This pivotal recommendation is part of the comprehensive new tax reforms recently signed into law by President Bola Tinubu.
Oyedele’s rationale behind this proposed exemption is rooted in the recognition that households within this income bracket are effectively “poor” and therefore should not be subjected to further taxation. This move reflects a broader strategy to recalibrate Nigeria’s tax system to be more equitable and less burdensome on vulnerable populations, while potentially broadening the tax base through other means. The implementation of these new tax reforms, according to Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), is slated to commence from January 2026, allowing for a phased transition and preparation.
The implication of this policy, if fully implemented as proposed, would be substantial for millions of Nigerian households struggling with the rising cost of living. By freeing up a portion of their monthly income, it is anticipated that this exemption could boost purchasing power, stimulate local economies, and significantly improve the quality of life for a large segment of the population. It aligns with the government’s stated commitment to social welfare and poverty reduction, seeking to ease the financial pressure on those most susceptible to economic shocks.
This proposed tax relief also opens up a wider conversation about what constitutes a “living wage” or the poverty line in Nigeria’s current economic climate. Oyedele’s assertion that N250,000 per month places a household in the “poor” category underscores the severe impact of inflation and economic challenges on ordinary citizens. It suggests a re-evaluation of income classifications and the need for tax policies that genuinely reflect economic realities.
The Presidential Fiscal Policy and Tax Reforms Committee, under Oyedele’s leadership, has been tasked with overhauling Nigeria’s complex and often criticized tax system. Their work aims to streamline tax administration, enhance transparency, reduce multiple taxation, and ultimately create a more conducive environment for both individuals and businesses. This specific proposal concerning low-income households is a testament to a reform agenda that seeks to be both fiscally responsible and socially sensitive, potentially reshaping the economic landscape for many Nigerians in the years to come.
