The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has announced that an estimated 98 per cent of Nigerian workers will stop paying personal income tax from January 2026 under the Federal Government’s new tax framework.
Oyedele disclosed this during the First Bank SME Connect webinar themed “Strategies for SMEs: Securing Your Business under the New Tax Law.”
He said the reforms, approved for implementation next year, are designed to reduce hardship on low-income earners and create a tax system that is “fair, efficient and growth-focused.”
According to him, workers earning the current N70,000 national minimum wage will be fully exempt from income tax. He added that those earning slightly higher—between N80,000 and N90,000 monthly—will also fall within the new exemption threshold.
Only Nigerians earning above N2 million per month will face an upward review in their personal income tax obligations.
Oyedele also unveiled a comprehensive package of incentives for small businesses as part of the 2026 tax regime.
He announced that: businesses with annual turnover below N100 million will be exempt from VAT beginning in 2026.
Withholding tax on services rendered by small businesses will be scrapped to boost liquidity and reduce pressure on SMEs.
Operators in agriculture, healthcare and education will enjoy a zero-rated VAT system, enabling them to reclaim input VAT while charging none on their services.
“This tax reform is not just to raise money; it is to make life easier for Nigerians and support business growth,” he said.
In a major shift, the Federal Government has also established a Tax Ombudsman Office to provide independent protection for taxpayers—especially small businesses—against harassment, illegal assessments and arbitrary enforcement.
“Nobody will just come and seal up your business or cart away your goods anymore. The Tax Ombudsman is there to protect you,” Oyedele assured participants.
Addressing fears over capital gains tax, Oyedele explained that individuals holding shares worth below N150 million will not pay the 30 per cent capital gains tax introduced under the reforms. This, he said, covers over 99 per cent of retail investors.
He added that the new law mandates government agencies to set aside tax refund funds before monthly revenue distribution, with VAT refunds processed in not more than 30 days via dedicated accounts.
Oyedele encouraged eligible families to take advantage of the National Education Loan Fund (NELFUND) rather than draining business capital to pay school fees.
“Instead of using N500,000 for school fees, you can borrow from NELFUND and use that money to expand your business,” he said, noting that repayment only begins after employment.
He also disclosed that Nigeria’s National Single Window for trade facilitation is nearing completion and is expected to significantly reduce import and export bottlenecks.
Oyedele dismissed widespread speculation that banks would close customers’ savings accounts for not submitting Tax Identification Numbers (TINs).
He clarified that the TIN requirement has been in place since January 2020 and applies only to business accounts, not personal accounts.
He urged Nigerians to rely on verified official guidance rather than social media rumours.
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