The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has said that under the new tax laws, Nigerian households earning 250,000 or less per month are classified as poor and exempt from paying taxes.
Oyedele, who made this clarification when he featured on Channels Television’s ‘Politics Today’ programme on Thursday, a few hours after President Bola Tinubu assented to the four new tax bills, said the objectives of the new laws, which would take effect from January 2026, were not intended to increase taxes but to stimulate economic activity in the country and track tax evaders.
Similarly, the renowned tax expert explained that the new laws would also protect businesses and ensure that the government does not tax poverty, and that the new laws were efficiency-driven, growth-focused, and people-centric.
He clarified: “This tax law will not give you cash in your pocket, but at least it won’t take your cash away if you are poor.
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“We have eliminated the tax component for people at the bottom, we have reduced for people at the middle, and we have increased slightly for people at the top.
“That middle, we estimated it at about N1.8 million to N2 million a month. If you are earning that amount and below, your tax will not be zero but it will reduce from what you are paying today”, he added.
The tax expert, who recalled that before his committee arrived at any decision during the reform process the poverty line of an average Nigerian was usually critically appraised, said that those who earn between N1-8 million and N2 million monthly represented just about 5% of the total Nigerian population.
Oyedele expatiated: “We debated this question; we said: ‘Who is a poor person in Nigeria?
“First, we started with data like the World Bank and the UN will tell you two dollars, 15 cents a day per person means you are at the poverty line but there are people who do not earn two dollars a day but they are not poor because they produce the food that they eat and they do not pay for transportation. I lived and grew up in the village.
“So, we had to factor that in. We drew our own (poverty) line for Nigeria on the basis of an average of five people per family: two people working if they are lucky, taking care of the five.
“When we did the maths, it gave us an amount, and that was what we used in determining the income below which nobody should pay taxes.
“We came up with a N120,000 or N130,000 per two people working in a household of five. If the earnings are about N250,000, they can take care of themselves. Of course, they are not going to have luxury, but at least they can take care of themselves. They are poor, and they shouldn’t pay taxes”, he added
Oyedele rounded off his contributions during the programme by saying Nigeria currently collects only about 30% of her accruable tax revenues, stressing that the objective of the new tax laws is to close the 70% tax revenue gap with the attendant positive implications for fiscal efficiency and national development.
