Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has criticised Nigeria’s previous personal income tax system as unfair and unsustainable, revealing that nearly 96 per cent of collected personal income tax came from low-income earners.
Speaking at the Cowry Quarterly Economic Discourse themed “Nigeria in 2026: Will Politics Trump Economic Reform?”, Oyedele clarified that the 2026 tax reform is designed to protect low-income earners, increase disposable income, and reduce prices of basic goods. Under the new law, Nigerians earning the national minimum wage are fully exempt from personal income tax, and the taxable income threshold has been significantly raised after deductions and allowances.
Oyedele explained that earlier, low-income earners bore most of the tax burden while wealthier Nigerians largely avoided taxation. He stressed that the reform is a deliberate effort to “stop taxing poverty” and align Nigeria’s tax system with global best practices. He compared Nigeria to South Africa, noting that despite having four times the population, Nigeria collects far less revenue from personal income tax.
He highlighted that the law was developed over 18 months with input from over 800 stakeholders, including state governments, the private sector, students, and civil society. Oyedele urged Nigerians to disregard misinformation surrounding the reform, emphasizing that it promotes fairness, growth, and improved living conditions.
Looking ahead, he expressed optimism for Nigeria’s economic outlook in 2026, describing the country as moving from volatility to stability, with tax reform as a key driver for translating macroeconomic improvements into real benefits for households and individuals.
