New Tax Law Exempts Most Workers From ‘Pay As You Earn’– Oyedele

The president of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said that astir 98 per cent of Nigerian workers would beryllium exempted from the pay-as-you-earn taxation (PAYE) strategy adjacent twelvemonth erstwhile the caller taxation laws that President Bola Ahmed Tinubu signed instrumentality effect.

Oyedele emphasised that the caller taxation laws bash not people low-income earners oregon those beneath the poorness line.

“From January 2026, you volition consciousness the impact. If you gain a salary, erstwhile you are paid astatine the extremity of January 2026, 97- 98 per cent of Nigerians volition either nary longer wage PAYE, oregon they’ll wage little PAYE.

“That is astir 98 per cent of nationalist and backstage assemblage workers who volition nary longer wage PAYE, due to the fact that they volition beryllium exempted. The remaining 2 per cent positive volition wage more,” helium said.

President Bola Tinubu, successful June 2025, signed the 4 (4) Tax Reform Bills into law. These laws see the Nigeria Tax Act (NTA), the Nigeria Tax Administration Act (NTAA), the Nigeria Revenue Service Act (NRSA) and the Joint Revenue Board Act (JRBA).

He besides emphasised that the authorities had lifted the load of taxation outgo disconnected the shoulders of low-income earners and businesses.

Oyedele urged micro, small, and mean enterprises (MSMEs) to formalise their operations by registering their businesses with the Corporate Affairs Commission (CAC). He said that was the lone mode they could beryllium exempted from the caller taxation laws that would instrumentality effect successful January 2026.

The caller instrumentality exempts businesses that gain N100 cardinal and beneath from paying taxes.

Oyedele made remarks connected the sidelines of the ongoing 31st Nigerian Economic Summit (NES31) successful Abuja, stating that the caller laws question to support low-income earners oregon those nether the poorness line.

Oyedele said the caller taxation laws are expected to bring down the firm taxation complaint from 30 per cent to 25 per cent.

“So, these reforms are designed to amended the governance strategy astir gross generation, including tax, and accountability arsenic to however it’s spent.

“When Nigeria improves, sovereign recognition improves; gross is capable to tally the authorities and conscionable expenses; borrowing costs volition travel down for the authorities and the backstage sector. It is successful our enlightened self-interest,” helium added.

Oyedele further explained that laws are made to heighten businesses and trim risks, adding that lowering idiosyncratic income taxation to 25 per cent seeks to make incentives for concern formalisation.

He said the instrumentality besides reduces the firm taxation complaint from 30 to 25 per cent.

“Under the caller law, if your yearly turnover is N100 cardinal oregon less, your firm taxation complaint is 0%. Low income, nary tax. Upper income, a spot more.

“In galore countries, you volition find that the apical rates for idiosyncratic income taxation are usually higher than those for firm tax, truthful that you tin incentivise concern formalisation,” helium said.