Nigerians earning N250,000 or below exempted from tax, says Taiwo Oyedele
Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has said that the newly signed, updated tax legislation will exempt households with monthly incomes of ₦250,000 or below from tax obligations, categorising them as economically disadvantaged.
In an interview on Channels Television’s Politics Today program on Thursday, the former PwC (PricewaterhouseCoopers) tax executive made these remarks shortly after President Bola Tinubu signed four tax reform bills into law.
Oyedele, who was appointed by the President in July 2023, described his tenure leading the tax reform committee over the past two years as demanding yet significant.
According to him, the reformed tax structure—set to take effect in January 2026—aims to boost economic growth and identify tax evaders, rather than simply increasing revenue collection.
The committee chairman emphasised that the legislation prioritises business protection while ensuring that government policy does not burden those living in poverty. He described the reforms as efficiency-oriented, growth-centred, and citizen-focused.
“This tax law will not put cash in your pocket, but at least it won’t take your cash away if you are poor,” he said.
Oyedele explained that individuals earning less than ₦250,000 monthly will face no tax liability due to their low income levels.
“We have eliminated the tax component for people at the bottom, reduced it for those in the middle, and increased it slightly for those at the top.
“That middle group—we estimated at about ₦1.8 to ₦2 million a month. If you’re earning that amount or below, your tax will not be zero, but it will reduce from what you are paying today,” he noted, explaining that this income bracket represents approximately 5% of Nigeria’s population.
The committee chairman revealed that the team held extensive discussions to define Nigeria’s poverty threshold.
“We debated this question. We asked, ‘Who is a poor person in Nigeria?’
“First, we looked at data—like the World Bank and the UN—which say that $2.15 per day per person defines the poverty line. But there are people who don’t earn two dollars a day and still aren’t poor because they grow their own food and don’t pay for transportation. I lived and grew up in the village.
“So, we had to factor that in. We defined our own poverty line for Nigeria, based on an average household of five people: two working adults—if they’re lucky—caring for all five.
“When we did the math, it gave us a figure, and that was what we used to determine the income threshold below which no one should pay taxes.
“We arrived at ₦120,000 to ₦130,000 for two working adults in a five-person household. If the earnings are about ₦250,000, they can take care of themselves. Of course, they won’t afford luxuries, but at least they can survive. They are poor, and they shouldn’t pay taxes.”
Oyedele noted that Nigeria currently captures only about 30% of its potential tax revenue. The new reforms, he said, are designed to address the 70% collection shortfall.
