Abuja, Nigeria – Taiwo Oyedele, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has revealed that 90% of those currently paying taxes in Nigeria should not be doing so. He made this statement at the 30th Nigeria Economic Summit, held on Monday in Abuja, organized by the Nigerian Economic Summit Group (NESG) and the Ministry of Budget and National Planning.
Oyedele emphasized that many people paying taxes are struggling to survive, particularly in the informal sector, and should be exempt from such obligations. He explained, “People will pay tax once we decide that they have to pay. What we realize is that almost 90% of people who are paying taxes are those who should not have been paying in the first place.”
Citing data, Oyedele stated that 97% of those in the informal sector should be formally exempted from paying taxes, as they are not in a financial position to contribute to government revenue. “People do not understand where we are coming from. They’re not the ones to pay taxes. They’re just trying to survive,” he noted.
Oyedele further revealed the government’s intention to shift the tax burden onto wealthier Nigerians. Under a proposed new tax bill, individuals earning N100 million and above per month will face a 25% personal income tax rate if the bill is passed by the National Assembly.
He highlighted the need for wealthier Nigerians to contribute more to the country’s revenue. “If you earn N100 million a month, we are taking up to 25% from the rich people. That’s because we need to balance the books,” Oyedele added.
For middle-income earners making N1.5 million or less per month, the proposed changes will lead to a reduction in their tax obligations, while higher-income earners will see incremental increases, with the highest earners facing a 25% rate. Lower-income earners will be completely exempt from personal income tax.
These proposed changes, expected to take effect from January 2025, are part of a broader strategy to streamline the nation’s tax system and reduce the burden on small businesses and lower-income earners. Oyedele also touched on discussions about addressing the issue of multiple taxation for businesses in Nigeria.
The implementation of these new tax policies is dependent on the passage of the bill by lawmakers, signaling a shift in the government’s fiscal approach to taxation.