Nigerians Earning ₦250,000 Monthly or Less Won’t Pay Tax Under New Law – FG

Nigerians earning ₦250,000 or less per month will no longer be required to pay tax under the country’s new fiscal regime, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, announced on Thursday.

Appearing on Channels Television’s Politics Today, Oyedele explained that the newly signed tax laws aim to protect low-income households and stimulate economic growth rather than extract more revenue from the poor. He emphasised that anyone earning below ₦250,000 monthly is considered poor and should not be taxed.

“This tax law will not give you cash in your pocket,” Oyedele said, “but at least it won’t take your cash away if you are poor.”

The tax reforms follow the signing of four new tax bills into law by President Bola Tinubu earlier on Thursday, June 26, 2025, at the Presidential Villa, Abuja. The new laws are set to take effect from January 2026.

Oyedele, who has led the tax reform committee since July 2023, noted that the changes are “efficiency-driven, growth-focused, and people-centric,” aimed at closing Nigeria’s vast tax collection gap. He revealed that the country currently collects only 30% of its potential tax revenue.

Addressing how the committee arrived at the ₦250,000 threshold, Oyedele said it was based on a realistic assessment of household economics in Nigeria. Using an average household size of five people—with two earners—the committee determined that ₦250,000 was the minimal income level needed to meet basic needs without luxury.

“We came up with ₦120,000 or ₦130,000 per two people working in a household of five,” he explained. “If the earnings are about ₦250,000, they can take care of themselves. Of course, they are not going to have luxury, but at least they can take care of themselves. They are poor, and they shouldn’t pay taxes.”

The new laws also adjust the tax burden across income groups: eliminating tax for low-income earners, reducing it for the middle class—estimated to earn between ₦1.8 million to ₦2 million monthly—and slightly increasing it for the top earners. According to Oyedele, the middle-income bracket makes up only 5% of the population.