Households Earning N250,000 Or Less Monthly Won’t Pay Tax~ Oyedele
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has announced that under the newly signed tax laws, Nigerian households earning ₦250,000 or less per month will be classified as poor and exempted from paying taxes.
Speaking on Channels Television’s *Politics Today* on Thursday—just hours after President Bola Tinubu signed four tax bills into law—Oyedele, a former tax lead at PriceWaterhouseCoopers (PwC), shared insights into the reforms.
Appointed by President Tinubu in July 2023, Oyedele described his two-year leadership of the tax reform committee as both challenging and eventful.
He explained that the new tax laws, which are set to take effect from January 2026, are not designed to raise tax rates but rather to boost economic activity, curb tax evasion, and safeguard low-income earners.
According to him, the reforms aim to protect businesses, avoid taxing poverty, and promote an efficient, growth-oriented, and people-focused tax system.
“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 for people at the middle, and we have increased slightly for people at the top.
“That middle, we estimated it at about ₦1.8 to ₦2m 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% of the total Nigerian population.
The tax boss said to arrive at a decision, his committee debated the poverty line of an average Nigerian.
Oyedele said, “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 on the basis of 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 a ₦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 are not going to 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% of what the country should be receiving in taxes, noting that the objective of the new tax laws is to close the 70% gap.
6/27/2025, 7:33:40 AM
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