Households Earning ₦250,000 or Less Monthly Will Be Tax-Exempt Under New Law — Taiwo Oyedele

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has revealed that Nigerian households earning ₦250,000 or less per month will be classified as poor and exempt from paying taxes under the country’s new tax laws.

Speaking on Politics Today on Channels Television on Thursday, Oyedele explained that the tax reforms, recently signed into law by President Bola Tinubu, aim to promote economic growth, ensure fairness, and curb tax evasion rather than raise tax rates. The laws will take effect from January 2026.

“This tax law will not put cash in your pocket, but at least it won’t take cash away if you are poor,” he said. “Nobody earning below ₦250,000 will have to pay taxes—they don’t even have enough to begin with.”

Oyedele, a former tax lead at PriceWaterhouseCoopers (PwC), said the reforms are designed to protect vulnerable households and businesses, noting that the system is now more efficiency-driven, growth-oriented, and people-focused.

“We’ve eliminated taxes for those at the bottom, reduced them for middle-income earners, and made a slight increase for top earners,” he added.

The committee defined the middle class as individuals earning between ₦1.8 million and ₦2 million monthly. Oyedele said about 5% of Nigerians fall within that bracket and will see a reduction in their tax burden.

Explaining how the ₦250,000 threshold was determined, Oyedele said the committee considered the realities of rural life in Nigeria—where people may not earn cash income but produce their food and don’t spend on transportation.

“We debated: Who is poor in Nigeria? The World Bank may say it’s two dollars a day, but that doesn’t always apply here,” he said. “So we developed our own poverty benchmark based on a family of five with two income earners. When we did the math, we arrived at around ₦250,000 as the minimum amount needed to survive without luxury. Anyone earning that or less should not be taxed.”

Oyedele also revealed that Nigeria currently collects just 30% of the taxes it should be earning, and the goal of the new policy is to close the 70% gap without burdening the poor.