98% of Nigerians to get pleasure from crash in tax payment or complete exemption in 2026 — Oyedele

Introduction: Nigeria’s Tax Reform Revolution Awaits Under Oyedele’s Vision

The Nigerian tax landscape stands on the precipice of transformation as Dr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, unveils a groundbreaking proposal targeting 98% of adult citizens. This sweeping reform, set to activate in 2026, promises to reshape how Nigerians perceive and fulfill their tax obligations, with potential implications for economic inclusivity and formalization. The announcement has ignited both optimism and skepticism across the nation, prompting urgent questions about the feasibility and impact of these radical changes.

The reforms center on a tiered tax structure that categorizes taxpayers into three distinct brackets: low-income exemptions, moderate-income adjustments, and enhanced obligations for high-income earners. This article explores the intricacies of Oyedele’s proposal, analyzing its design principles, economic rationale, and potential consequences for Nigeria’s 200 million population.

Analysis: Decoding the 98% Tax Reform Framework

The Poverty Line Paradigm and Income Thresholds

Oyedele’s approach challenges conventional tax paradigms by prioritizing household-based poverty calculations over individual income assessments. Drawing from National Bureau of Statistics (NBS) data, the committee has established a ₦120,000 monthly threshold for two-breadwinner households supporting five-person families. This calculation accounts for essential living expenses without rent or formal education costs, effectively dropping tax obligations for approximately 33% of working Nigerians.

Income categorization reveals three key brackets:

• Low-Income (0-₦120,000/month): Complete tax exemption
• Middle-Income (₦120,001-₦1.8 million/month): Reduced PAYE rates
• High-Income (>₦1.8 million/month):

This structure aims to protect 98% of wage earners while maintaining revenue streams from Nigeria’s estimated 64,000 millionaires and ultra-high-net-worth individuals.

Strategic Reforms Beyond Individual Taxation

The reforms extend beyond income adjustments to address systemic issues in tax administration:

• Formalization Incentives: Corporate tax reductions from 30% to 25%
• Simplified Compliance: Free registration for 250,000 new businesses
• Global Alignment: Corporate rates now match Ghana (25%) and Kenya (30%)

Notably, the proposal inverts the traditional tax burden distribution, lowering rates for visible entities while increasing pressure on the vast informal sector – which constitutes 65% of Nigeria’s workforce according to NBS estimates.

Summary: Key Takeaways from the Tax Reform Announcement

Oyedele’s tax reform masterplan represents Nigeria’s most ambitious fiscal overhaul since 1999. Core elements include:

• Progressive exemptions covering 98% of earners through family-centric poverty calculations
• Corporate tax reductions to boost formal sector participation
• Mandatory registration drives targeting Nigeria’s 7 million informal businesses
• Enhanced penalties for persistent tax evasion through advanced data systems

The proposal balances humanitarian concerns with sustainable revenue generation, positioning Nigeria for potential alignment with international financial standards while addressing domestic inequities.

Key Points: Simplifying Complex Tax Reforms

1. Tax Exemption Magic: Two out of every five working Nigerians qualify for complete tax relief
2. Middle-Class Mirage: The ₦1.8 million ceiling separates 33% of workers from the top 1%
3. Corporate Revolution: Tax inversions aim to reverse Nigeria’s 77% informal economy ratio
4. State-Subnational Dynamics: 36 states risk revenue shortfalls from reduced corporate taxation
5. Global Lessons: Nigeria now competes with Kenya’s 30% and South Africa’s 45% corporate rates

These seven pillars form the backbone of Oyedele’s vision for a reformed Nigerian tax ecosystem.

Practical Advice: Navigating the 2026 Tax Transition

For Individuals:

• Verify Eligibility: Utilize the NBS poverty line calculator to confirm exemption status
• Document Everything: Maintain household expense records to substantiate exemption claims
• Explore SSS/NPS Benefits: Leverage pension contributions for income tax reductions

For Businesses:

• Formalize Operations: Register through the Federal Inland Revenue Service’s new digital portal
• Optimize Structure: Consider SME registration for zero-tax turnover brackets
• Document Compliance: Engage professional tax consultants for transition planning