Up to 98 per cent workers are exempted from pay-as-you earn in the new tax law billed to commence January 2026, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele reaffirmed.
He disclosed that the federal government generated N3.36 trillion revenue, last year. Oyedele spoke in Abuja at the on- going 31st Nigerian Economic Summit (NES31) . He added that the new laws which will come into operation from January 2026, are targeted at protecting the low income earners or those at the poverty line.
According to him, the new laws are expected to bring down corporate tax rate from 30 per cent to 25 per cent, noting that the federal government generated about N3.36 trillion revenue last year.
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 government and meet expenses; costs of borrowing will come down, not only for the government, but for also 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 in the law, including people with disability and Nigerians in the disapora.
“No one was left out. Nigerians in the diaspora, people with disability 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 an 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 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 it 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”.