Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has revealed that about 98% of Nigerian workers will be exempted from paying personal income tax when the new tax regime becomes effective in January 2026.
Speaking at the First Bank SME Connect webinar titled “Strategies for SMEs: Securing Your Business under the New Tax Law,” Oyedele said the reforms aim to reduce the burden on low-income earners and promote fairness in the tax system.
He explained that workers earning the current national minimum wage of ₦70,000, as well as those earning slightly higher up to ₦80,000 or ₦90,000 monthly will not pay personal income tax.
Only individuals earning above ₦2 million monthly will face an upward adjustment in their tax rates.
Oyedele also unveiled several incentives for businesses ahead of the 2026 rollout.
Small enterprises with annual turnover below ₦100 million will be exempted from value-added tax (VAT), while withholding tax on services provided by small businesses will be eliminated to ease cash flow.
Sectors such as agriculture, healthcare, and education will benefit from a zero-rated VAT system, allowing operators to reclaim input VAT on purchases while charging no VAT on their services.
To further protect taxpayers, he announced the establishment of a Tax Ombudsman Office, an independent body created to prevent harassment, arbitrary enforcement, and wrongful sealing of business premises.
Clarifying concerns about capital gains tax, Oyedele stated that investors with shareholdings valued below ₦150 million are exempt from the 30% capital gains tax, covering over 99% of retail investors.
He urged the public to avoid relying on unverified social media posts for tax guidance.
On the issue of refunds, he noted that the new law mandates tax refund allocations before monthly revenue distribution to government tiers, with VAT refunds expected within 30 days through dedicated systems.
Earlier, First Bank’s Head of SME Banking, Abiodun Famuyiwa, said the bank disbursed more than ₦200 billion to SMEs last year, including ₦100 billion to traders, most of which were non-collateral loans.
He reaffirmed the bank’s commitment to supporting SMEs especially women-led businesses through digital products and specialised financing programmes.
Oyedele also encouraged eligible families to access the National Education Loan Fund (NELFUND) rather than depleting business capital for school fees.
Beneficiaries will only begin repayment after securing employment.
Addressing misconceptions about Tax Identification Numbers (TINs), he clarified that the requirement applies only to business accounts, not personal savings accounts, and has been in effect since January 2020 under the 2019 Finance Act.
He dismissed claims of mass account closures or arbitrary deductions.