The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has revealed that about 98% of Nigerian workers will stop paying personal income tax under the new tax system scheduled to begin in January 2026.

Speaking during the First Bank SME Connect webinar titled “Strategies for SMEs: Securing Your Business under the New Tax Law,” Oyedele stated that the reforms are designed to reduce the tax burden on low-income earners and bring fairness into the country’s tax system.

Key Highlights of the New Tax Regime

1. No Personal Income Tax for Low & Moderate Earners

Workers earning the national minimum wage of ₦70,000 will pay zero personal income tax.

Even those earning ₦80,000 to ₦90,000 monthly will remain fully exempted.

Only individuals earning above ₦2 million monthly will see an upward review in their personal income tax.

2. Major Reliefs for Small Businesses

Oyedele unveiled new incentives aimed at easing financial pressure on SMEs:

Businesses with turnover below ₦100 million yearly will be exempt from VAT beginning 2026.

Withholding tax on services rendered by small businesses will be removed.

Agriculture, healthcare, and education sectors will enjoy zero-rated VAT, allowing them to reclaim input VAT.

3. New Tax Ombudsman to Protect SMEs

An independent Tax Ombudsman Office has been established to protect taxpayers from harassment and unlawful enforcement actions.

“Nobody will just come and seal up your premises or seize your goods,” Oyedele assured.

4. Capital Gains Tax Exemptions

Individuals with shareholdings below ₦150 million will not pay the 30% capital gains tax.

He noted that this exemption covers over 99% of Nigerian investors.

5. Faster Tax Refund System

A new rule mandates government to set aside refund funds before sharing revenue to federal, state, and local governments:

VAT refunds must now be processed within 30 days.

6. Support for Education & Trade

Eligible families are encouraged to use the National Education Loan Fund (NELFUND) to cover tuition and free up capital for business expansion.

The National Single Window system for streamlined trade processes is near completion.

7. Clarification on TIN Requirements

Oyedele dismissed recent rumours about mass bank account closures:

TINs are required only for business accounts, not personal savings accounts.

The rule has been in place since January 2020.

First Bank Reaffirms Commitment to SMEs

First Bank’s Head of SME Banking, Abiodun Famuyiwa, announced that the bank disbursed over ₦200 billion to SMEs last year—₦100 billion of which went to traders—mostly as non-collateral loans. The bank continues to expand support, especially for women-led enterprises.