Public debate is healthy for democracy. However, when discussions about economic policy drift away from verifiable facts, it becomes necessary to restore clarity. Recent remarks by former Minister of Transport, Rotimi Amaechi, who was a former governor of Rivers State, suggesting that Nigeria’s new tax laws increase the burden on low-income earners, do not align with the actual provisions of the reform.
Let us examine the facts.
Beginning January 1, 2026, Nigeria’s revised tax framework introduces a more progressive system designed to protect low-income earners. Individuals earning at or around the national minimum wage are exempt from personal income tax. In practical terms, this means many workers at the lower end of the income scale will pay zero tax.
Under the new structure, taxable income up to approximately N800,000 falls within a zero per cent bracket. Only income above that threshold attracts graduated rates. That is not an increase in burden; it is targeted relief.
Equally important is the treatment of small businesses. The exemption threshold for Company Income Tax has been expanded significantly. Businesses with annual turnover up to N100m now qualify as small companies and are exempt from paying Company Income Tax. This is a substantial shift from previous limits and represents a deliberate effort to ease pressure on micro, small, and medium enterprises.
These changes reflect a broader principle: shield the vulnerable, broaden compliance among higher earners, and strengthen revenue collection mechanisms without squeezing those already struggling.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has also responded to Amachi’s claims.
He clarified in a post on X on Sunday that the Nigeria Tax Act 2025 had already commenced and did not impose a 25 per cent tax on building materials, construction funds, or bank balances.
“We are aware of a recent video claiming that the new tax laws will commence in 2027 and alleging the imposition of a 25 per cent tax on funds for building materials and other transactions. Both claims are incorrect.
“The Act does not tax money in bank accounts or bank balances, tax transfers for buying building materials, introduces a 25% construction or business cost tax, and delays implementation until 2027.
“Claims suggesting a new tax on building materials or bank funds are false and misrepresent the law. Rather, the new tax law specifically introduced measures to make housing more affordable, promote real estate development, incentivise manufacturing of building materials, and grant rent reliefs to tenants to enhance their disposable income,” Oyedele explained.
Policy disagreements are legitimate. But suggesting that the reforms raise taxes on low-income earners misrepresents what the law actually provides. If anything, the reforms remove many of them from the tax net entirely.
Nigeria’s fiscal challenges require serious engagement, not alarmist interpretations. Constructive criticism should focus on implementation efficiency, transparency, and accountability, areas where meaningful debate can yield improvements.
- Aderonke Atoyebi is the Technical Assistant on Broadcast Media to the Executive Chairman of the Nigeria Revenue Service
