The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has revealed that about 98 per cent of Nigerian workers will be exempt from paying personal income tax when the new tax system takes effect in January 2026.
Oyedele made this known during the First Bank SME Connect webinar titled “Strategies for SMEs: Securing Your Business Under the New Tax Law.” He said the reforms were crafted to reduce the tax burden on low-income earners and promote fairness across the system.
According to him, workers earning the current national minimum wage of N70,000 will be fully exempt from tax. He added that those earning slightly above the minimum wage — up to N80,000 or N90,000 monthly — will also fall within the exemption bracket.
He noted that only individuals earning above N2 million per month will see an upward adjustment in personal income tax under the new regime.
As part of several incentives targeted at small businesses, Oyedele announced that enterprises with an annual turnover of N100 million or less will be exempt from paying value-added tax (VAT) from 2026. He added that withholding tax on services rendered by small businesses would also be scrapped to boost liquidity and ease cash flow challenges.
For operators in agriculture, healthcare and education, the reforms introduce a zero-rated VAT system, allowing them to reclaim input VAT on purchases while charging no VAT on their services.
Oyedele also unveiled the establishment of a Tax Ombudsman Office — an independent body set up to protect taxpayers, especially SMEs, from harassment and arbitrary enforcement actions by tax authorities.
“This new office has been set up particularly to protect small businesses. Nobody will just come and seal up your premises or harass you and take your items,” he assured participants.
Addressing concerns around capital gains tax, he clarified that individuals holding shares valued below N150 million are exempt from the 30 per cent capital gains tax — a provision covering more than 99 per cent of investors. He cautioned Nigerians against relying on unverified social media posts for tax information.
On tax refunds, Oyedele explained that the new law mandates refunds to be provisioned before monthly revenue allocations to government, with VAT refunds to be completed within 30 days through dedicated accounts.
Earlier at the event, the Head of SME Banking at First Bank, Abiodun Famuyiwa, disclosed that the bank disbursed over N200 billion to small and medium-scale enterprises last year, including N100 billion to traders. He noted that most of the loans were unsecured and reaffirmed the bank’s commitment to supporting SMEs.