98% workers exempted from tax, rakes in N3.36trn

From Isaac Anumihe (Abuja) and Chinwendu Obienyi

Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, has disclosed that between 97 and 98 per cent of Nigerian workers are exempted from the pay-as-you-earn (PAYE) tax under the new tax law. He added that the Federal Government generated about N3.36 trillion in revenue last year.

Speaking at a session during the ongoing 31st Nigerian Economic Summit (NES31) in Abuja, Oyedele explained that the new tax laws, scheduled to take effect from January 2026, are designed to shield low-income earners and individuals living around the poverty line from additional financial burdens.

He noted that the reform was part of wider efforts to create a fairer and more efficient tax system that encourages compliance while supporting inclusive economic growth.

According to him, the new laws are expected to  bring  down the corporate tax rate from 30 per cent to 25 per cent.

He noted that the  more inequality you create, the more time-bomb you have. You don’t want to imagine what can happen after that.

“So, these reforms are designed to improve the governance system around the whole revenue generation, including tax, including accountability as to how they’re spent.

“When Nigeria gets better, sovereign credit is improved;  revenue is sufficient to run the government and meet expenses;  costs of borrowing will come down, not only for the government, but also for the private sector. It is in our enlightened self-interest.

“They are either twisted, totally contradictory to what has been said, or they are sensationalised.

And connected to that,  part of my three points, is that you need to engage with the reforms so that the way we manage to co-create the solution to the problems let us also implement together so that we can all benefit.

“So, what we did, for many people that followed, although I also admit that this is why sometimes even things that appear to be negative can play to your advantage as a people.

So, when the controversy erupted about these reforms, it was actually the time that the national awareness about the reform gained ground.

Before the controversy, if we said we’re having an engagement, you’d be lucky to find 100 people in the room.

“After the controversy, no room could take people that wanted to participate. And what we did was to engage with every single sector. We went to the National Bureau of Statistics (NBS) report, gross domestic products (GDP) report, and took all the sectors there and engaged with them one by one” he said.

According to the chairman, everybody was captured by the law, including people with disabilities and Nigerians in the diaspora.

“No one was left out. Nigerians in the diaspora, people with disabilities and farmers, we did that. And interestingly, we got input from all the states in Nigeria.

“There was not a state where we didn’t get input from stakeholders. So that was how we co-created the solution to the problems we identified. Now, the question is, how do you then co-execute? Now, usually what the government would do is sometimes they’ll sit back, find some few brilliant people, and then they just write the laws, and we deal with it.

“But the approach for these reforms has been different. And I’d also like to commend Mr. President for that in particular. Our committee is the only one I’m aware of in Nigeria where you set up a committee, and you say, don’t give me a report of what to do.

“You sit with me, and we implement together. So my committee is also an implementation committee. And the whole idea now is that we have the laws; we’re engaging with the people to say, tell us, how do you understand this? What’s your level of awareness? What’s your priority for us in terms of the focus for implementation? It could be capacity building” he said.