Under newly approved tax laws, Nigerians earning less than N250,000 monthly will no longer be required to pay income tax, according to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.

Oyedele revealed this during an interview on Politics Today aired by Channels Television, following President Bola Tinubu’s approval of four new tax bills on Thursday.

He explained that households earning N250,000 or less per month are now officially classified as poor and will be shielded from taxation under the new regime.

Appointed in July 2023, Oyedele described his tenure leading the tax reform committee as both challenging and impactful. He noted that the new tax laws, set to take effect in January 2026, are not designed to raise taxes but to stimulate economic growth and enhance the government’s ability to track tax evaders.

“These reforms are aimed at protecting small businesses and ensuring the government does not tax the poor. The focus is on efficiency, economic growth, and people-centered policies,” he said.

“This tax law may not put money in your pocket, but at the very least, it won’t take money from you if you’re poor,” Oyedele added.

He emphasized that individuals earning below N250,000 monthly won’t pay taxes as they lack sufficient income. “We’ve removed taxes for those at the bottom, reduced it for the middle class, and slightly increased it for high earners,” he said.

According to Oyedele, middle-income earners — defined as those earning between N1.8 million and N2 million monthly — make up about 5% of Nigeria’s population. While they will still pay tax, it will be at a reduced rate.

He also shared how the committee determined the poverty line. “We asked ourselves, who qualifies as poor in Nigeria? Global benchmarks like the World Bank set the poverty line at $2.15 per person daily, but that doesn’t reflect our reality. Many rural dwellers grow their own food and don’t pay for transport,” he explained.

Factoring in these nuances, the committee estimated that in a typical household of five, where two people are working, monthly earnings of N120,000 to N130,000 are barely sufficient. Based on this, they concluded that households earning around N250,000 still live in poverty and should be exempt from taxation.

Oyedele further disclosed that Nigeria currently collects only about 30% of its potential tax revenue. The new tax policy aims to close this 70% collection gap while shielding the poor from tax burdens.