New Tax Laws To Lift Burden Off Low Income Earners

 *NEW TAX LAWS TO LIFT BURDEN OFF LOW-INCOME EARNERS — NIGERIANS EARNING BELOW N250,000 MONTHLY TO BE TAX-EXEMPT* 

 HOUSEHOLDS EARNING N250,000 OR LESS PER MONTH ARE NOW CLASSIFIED AS POOR.....* 

By Prince Uwalaka Chimaroke 

27-JUNE-2025

In a recent fiscal policy development aimed at reducing economic pressure on struggling citizens, the Federal Government of Nigeria has announced that individuals earning less than ₦250,000 monthly will no longer be subject to income tax.

The disclosure was made by Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during a televised interview on Channels Television’s Politics Today, following President Bola Ahmed Tinubu’s signing of four new tax-related legislations on Thursday, June 26, 2025.

Mr. Oyedele emphasized that under the newly enacted tax regime, effective January 2026, households with monthly earnings at or below ₦250,000 are now officially recognized as economically vulnerable and will therefore be exempt from income taxation. “We have chosen not to tax poverty,” he affirmed.

According to Oyedele, the new tax laws are not designed to increase existing rates but rather to enhance efficiency, support economic growth, and ensure fairness in the tax system. “This reform is people-centered. It will not put money in your hand directly, but it ensures your meager income is not further depleted by taxes if you are poor,” he explained.

He further clarified the income brackets and tax adjustments under the reform:

Those earning below ₦250,000/month: Fully exempt from income tax.

Middle-income earners (₦1.8–₂ million/month): See a reduction in tax rates.

High-income earners: Marginal tax increase to balance equity.

Oyedele noted that the committee considered more than just foreign poverty benchmarks to define Nigeria’s economic reality. “The global $2.15 per day standard doesn’t fully capture our context,” he stated, referencing families in rural Nigeria who may not earn cash income but grow their food and avoid common costs like transport.

He explained that after extensive evaluation, a household of five with two working adults earning a combined ₦250,000 per month was found to be at the subsistence level. “They can feed and clothe themselves modestly but live without luxuries. That’s not enough to be taxed,” he added.

The reforms also aim to increase Nigeria’s tax collection efficiency, which currently stands at a mere 30% of its potential. Oyedele highlighted the need to bridge the 70% shortfall by eliminating loopholes and targeting tax evaders rather than burdening compliant but underprivileged citizens.

Appointed in July 2023, Oyedele described his tenure as both demanding and rewarding, noting that this major milestone reflects the administration’s resolve to create a just, inclusive tax structure that supports productivity without deepening poverty.

As the nation prepares for the full implementation of the reforms in 2026, many low-income earners are expected to breathe a sigh of relief, while tax authorities are optimistic about a more transparent and equitable fiscal future.