FG Declares Tax Holiday for Nigerians Earning Below N250,000
The Federal Government has approved a new tax reform that exempts Nigerians earning less than ₦250,000 monthly from paying income tax. The announcement was made by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during an interview on Channels Television’s Politics Today.
The exemption is part of a broader set of fiscal reform bills signed by President Bola Ahmed Tinubu on Thursday. According to Oyedele, the reform is designed to foster economic inclusion, reduce poverty, and enhance the efficiency of the country’s tax system.
The new laws are expected to take effect from January 2026.
“Households earning ₦250,000 or less per month are now classified as poor and will not be taxed,” Oyedele stated, emphasizing that the policy is not intended to increase tax burdens but rather to stimulate economic activity and close tax loopholes.
He reiterated that it is morally and economically unsound to tax people who are already struggling to make ends meet.
“This tax law will not put cash in your pocket,” Oyedele admitted, “but at least it won’t take your cash away if you are poor.”
Oyedele, who was appointed in July 2023, described his two-year journey leading the tax reform committee as both “eventful and challenging.” Under his leadership, the committee has pursued reforms that are efficiency-driven, growth-focused, and people-centric prioritizing policies that protect small businesses and reduce the tax burden on low-income earners.
He noted that the goal is to create a fairer, more transparent tax environment that supports entrepreneurship while ensuring that the wealthier segments of society and corporate entities contribute their fair share.
Experts have praised the initiative as a step toward inclusive taxation. By removing the tax burden from Nigeria’s most vulnerable citizens, the reform not only provides immediate financial relief but also promotes social equity and economic participation.
However, some analysts have raised questions about the feasibility of enforcement and the criteria for determining income levels in Nigeria’s largely informal economy. Still, the move is widely seen as a progressive shift in the country’s fiscal policy.
As the country gears up for the 2026 implementation, all eyes will be on how the government balances revenue generation with protecting the poor and bolstering business growth.
With these reforms, Nigeria joins a growing number of countries rethinking tax systems to reflect modern realities where taxation is not just about revenue but about fairness, empowerment, and long-term growth.
