The Federal Government has announced sweeping exemptions under its newly introduced Personal Income Tax (PIT) reforms, offering relief to millions of low-income earners as enforcement begins in January 2026.
Under the new framework, individuals earning up to about ₦100,000 per month will no longer be required to pay personal income tax. The reforms introduce a zero per cent tax rate on the first ₦800,000 of taxable income, effectively exempting workers whose earnings fall within this threshold after allowable deductions.
The announcement was made by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, who said the changes are aimed at reducing economic hardship, improving fairness and resetting the relationship between citizens and the tax system.
Oyedele explained that taxable income differs from gross income, noting that statutory deductions and approved contributions are removed before tax is calculated. Using the current minimum wage of ₦70,000 as an example, he said tax liabilities for low-income workers would drop significantly under the new law.
Speaking at a workshop in Lagos, Oyedele urged workers to understand the new tax structure and verify their take-home pay using the official tax calculator. He advised employees to question discrepancies where deductions do not reflect the promised relief, stressing that transparency and awareness are key to the success of the reforms.
While low-income earners are exempted, the reforms place higher tax obligations on top earners in a bid to promote fiscal equity. Oyedele said individuals with greater earning capacity would be required to contribute a fairer share to national revenue.
The reforms also seek to expand the tax base by bringing more participants from the informal sector into the system, a move the government believes will boost revenue without overburdening the poor.
Beyond personal income tax, the policy package includes business-friendly measures such as reduced corporate income tax and the introduction of value-added tax input credits to lower operating costs and enhance competitiveness. These steps, according to Oyedele, are intended to attract investors and stimulate sustainable economic growth.
To strengthen compliance and protect taxpayers, the government is establishing the Office of the Tax Ombudsman to handle disputes, support self-assessment and prevent unfair treatment. The reforms also harmonise capital gains tax with income tax to close loopholes, while offering specific incentives and exemptions to investors under defined conditions.
Oyedele added that President Bola Ahmed Tinubu has approved the suspension of several levies, including excise duties on airtime and data, the cybersecurity levy, and the carbon tax on single-use plastics. Import duties on selected food items, pharmaceuticals and vehicles have also been suspended.
Describing the changes as a broader economic reset rather than mere tax cuts, Oyedele urged Nigerians to study the new laws carefully, avoid misinformation and position themselves to benefit from emerging opportunities as the reforms take effect in January 2026.
