Nigeria’s New Tax Laws Will Empower Citizens, Cut Burdens, Says Taiwo Oyedele
The chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has said the new tax laws scheduled to take effect from January 2026 are designed to empower Nigerians across all income levels, PulseNets learned.
Oyedele made the remarks on Friday at a media workshop in Lagos, where he explained that earlier fiscal reforms unintentionally created layers of multiple taxes that placed heavy pressure on the informal economy, which he described as the true engine of national development.
Speaking at the session, Oyedele said the current reform agenda deliberately removes barriers that previously prevented small and nano businesses from growing, noting that the new framework rewards formalisation rather than punishing it. He said incentives have now been built into the system to encourage registration, expansion, and long-term sustainability.
“When the system works for them, nano businesses evolve into micro enterprises, micro businesses become small, small firms scale to medium, medium companies turn large, and large organisations eventually become multinationals,” Oyedele said.
PulseNets learnt that as part of the reforms, Company Income Tax (CIT) has been reduced to 25 per cent, while businesses with an annual turnover below ₦100 million will pay zero CIT. Oyedele said this shift fundamentally changes the cost-benefit analysis for informal operators.
“There is now a clear incentive to formalise because the advantages of compliance far outweigh the disadvantages we used to have,” he said.
Oyedele further explained that taxation is only a minor component of the broader reform objectives, describing it as “secondary to the discipline that comes with formalisation.” According to him, once businesses are formal, they become better structured, more productive, and more capable of contributing meaningfully to inclusive economic growth.
“If large corporations expand by 40 per cent, only a few people notice. But if the informal sector grows by just two per cent, every Nigerian feels the impact,” he said.
PulseNets reported that Oyedele also linked the reduction of corporate tax from 30 per cent to 25 per cent to Nigeria’s efforts to attract foreign direct investment. He recalled that severe economic shocks experienced about two years ago pushed Nigeria’s tax-to-GDP ratio below 10 per cent, leaving the government spending as much as 97 per cent of its revenue on debt servicing.
According to Oyedele, the new fiscal laws will eliminate and harmonise several taxes that previously weakened Nigeria’s competitiveness on the global stage. He said the reforms address both the problem of excessive taxation and the proliferation of multiple tax-collecting agencies.
“Nigeria currently ranks among the top ten countries globally with the heaviest tax burden on businesses,” he noted.
Oyedele also disclosed that low-income earners, who previously shouldered as much as 96 per cent of personal income tax, will now enjoy full exemption under the new regime.
“From January next year, low-income earners will no longer pay income tax,” he said.
He added that individuals earning ₦100,000 or less monthly would receive additional relief through value-added tax exemptions on essential goods and services.
PulseNets obtained that Oyedele described 2023 as a critical period when Nigeria narrowly avoided economic collapse. He said the country is now on a gradual recovery path, driven by tough but necessary reforms introduced from mid-2023 to stabilise the macroeconomic environment and restore investor confidence.
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Rejecting claims that the government has increased taxes or resorted to reckless borrowing, Oyedele said several taxes have been cancelled, reversed, or harmonised. He also pointed to policy changes aimed at strengthening the capital market and improving overall fiscal efficiency.
He added that under the new law, essential sectors will enjoy zero VAT, including food, education, healthcare, rent, and transportation, a move he said would significantly ease the cost-of-living burden on Nigerians.
