The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, who disclosed this a few hours after President Tinubu signed the new tax laws, said, “This Thursday marks a significant milestone for the country,” acknowledging the political risks and resistance the reforms had encountered.
“Even when it became so heated and they were called names, it became politically risky for even Mr. President because it took on different dimensions, from regional issues to religious issues, an average leader would have backed down.”
He emphasised that writing the law was only the beginning, stressing that successful implementation would require sustained effort. “The journey is just beginning; writing the law, no matter how beautiful, no matter how transformative, no matter how innovative, it means nothing if it is not properly implemented. So, we are mindful of that. We are not going to relax. Mr. President has given us the charge that now is the time to move to implementation, and we are ready.”
According to Oyedele, the committee plans to bring together private sector stakeholders, public institutions, civil society, professional bodies, and international development partners to ensure inclusive and effective execution. The overarching goal of the reforms is to increase Nigeria’s tax-to-GDP ratio from 10.3 per cent to 18 per cent by 2026.
Among other measures, the laws exempt small businesses with a turnover below N50 million from income tax and remove value-added tax on essential items like food and healthcare, aiming to stimulate economic activity and ease pressure on vulnerable households.
Oyedele, who was appointed in July 2023, said the objectives of the new laws, which take effect from January 2026, were to increase taxes, stimulate economic activity in the country and track tax evaders.
Oyedele stated that the new laws would also protect businesses and ensure that the government doesn’t tax poverty, adding that the new laws are efficiency-driven, growth-focused, and people-centric.
“This tax law will not give you cash in your pocket, but at least it won’t take your cash away if you are poor.”
He said nobody earning below ₦250,000 would have to pay taxes because they don’t even have enough.
“We have eliminated the tax component for people at the bottom, we have reduced it for people at the middle, and we have increased it slightly for people at the top.
“That middle, we estimated it at about ₦1.8 to ₦2 million a month. If you are earning that amount and below, your tax will not be zero, but it will reduce from what you are paying today,” he stated, noting that those who earn this amount are about 5 per cent of the total Nigerian population.
The tax boss said to arrive at a decision, his committee debated the poverty line of an average Nigerian. “We debated this question; we said: ‘Who is a poor person in Nigeria?
“First, we started with data like the World Bank and the UN will tell you two dollars, fifteen cents a day per person means you are at the poverty line but there are people who do not earn two dollars a day but they are not poor because they produce the food that they eat and they do not pay for transportation. I lived and grew up in the village.
So, we had to factor that in. We drew our own (poverty) line for Nigeria based on an average of five people per family: two people working if they are lucky, taking care of the five.
“When we did the maths, it gave us an amount, and that was what we used in determining the income below which nobody should pay taxes.
“We came up with ₦120,000 or ₦130,000 per two people working in a household of five. If the earnings are about ₦250,000, they can take care of themselves. Of course, they won’t have luxury, but at least they can take care of themselves. They are poor, and they shouldn’t pay taxes.”
Oyedele stated that Nigeria currently collects only about 30 per cent of what the country should be receiving in taxes, noting that the objective of the new tax laws is to close the 70 per cent gap.
The new development, which marks a major step in overhauling the country’s outdated tax structure, aims to unify the fragmented system, ease compliance for taxpayers, and boost economic growth.
Speaking at the ceremony, Zacch Adedeji, Chairman of the newly renamed Nigeria Revenue Service (NRS), formerly known as the Federal Inland Revenue Service (FIRS), while confirming the implementation timeline, stated, “So, with the magnanimity of the National Assembly, Mr. President, the effective date will be January 1, 2026, by the special grace of Almighty God,” he said, explaining that the six-month transition window allows for proper sensitization and alignment with the government’s fiscal year.
The signed legislation includes the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill. These bills seek to simplify tax administration, eliminate inefficiencies, and reposition Nigeria for a more sustainable fiscal future
Adedeji noted that the NRS would not only collect taxes but also focus on non-tax revenue generation, which significantly broadens its mandate. “We were FIRS two hours ago, but with the assent of the Tax Reform Bills by the President, we are now the Nigerian Revenue Service, which has expanded its scope to also focus on non-tax collection and increase efficiency,” he said.
He emphasised that the changes come with improved accountability and a shift toward global best practices in revenue administration.
The bill-signing was attended by key political and economic leaders, including Senate President Godswill Akpabio, Speaker of the House of Representatives Tajudeen Abbas, House Majority Leader Julius Ihonvbere, Governors Abdulrazaq Abdulrahman of Kwara and Hope Uzodinma of Imo, and Minister of Finance Wale Edun.
President Tinubu forwarded the bills which generated contriversies from northern governors who raised concerns about potential regional disadvantages, to the National Assembly on October 3, 2024, urging their swift passage. After the initial opposition, a consensus was reached in January through the Nigeria Governors’ Forum, which adopted an equitable VAT-sharing formula.
The House passed the bills in March, followed by the Senate in May 2025, before they were formally transmitted to the President on June 18.
President Tinubu described the reforms as transformative and pro-people, stating they would bring lasting relief to ordinary Nigerians and promote fairness in the system.
“They deliver the first major, pro-people tax cuts in a generation—targeted relief for low-income earners, small businesses, and families working hard to make ends meet,” he said.
“For too long, our tax system has been a patchwork—complex, inequitable, and burdensome. It has weighed down the vulnerable and shielded inefficiency. That era ends today.”
He added that the reforms would eliminate duplication, reduce bureaucratic bottlenecks, restore investor confidence, and strengthen transparency, all while aligning with other welfare policies such as the new national minimum wage.
Source: Insideimage
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