President Bola Tinubu’s led administration has clarified its position on the newly approved tax law.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, stated that under the new laws, Nigerian households earning N250,000 or less per month are classified as poor.
Speaking on Thursday during an interview with Channels Television, Oyedele noted that individuals within that category will be exempted from paying taxes.
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He said that 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.
Oyedele stated that the tax laws would also protect businesses and ensure that government doesn’t tax poor Nigerians.
He said: “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.
“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.
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“That middle, we estimated it at about ₦1.8 to ₦2m 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.
“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, fifteen 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 ₦120,000 or ₦130,000 per two people working in a household of five. If the earnings are about ₦250,000, 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.”
