Edun Announces 25% Personal Income Tax for Top Earning Nigerians

The federal government is to increase the personal income tax rate for its top-earning citizens to 25 per cent according to the Finance Minister, Mr. Wale Edun.

The increased tax rate is part of a broader package of fiscal reforms intended to increase government revenue and steady the economy.

Reacting to the suggested reforms, Edun explained that the tax hike would target higher-income earners, increasing the personal income tax rate from the existing 18.6% to 25%. He said the reform is aimed at addressing Nigeria’s rising revenue needs and building on the foundations laid last year. The government is particularly interested in tackling the revenue deficit, which has been a prime concern since the global economic downturn.

The tax hike is part of a list of steps contained in the Tax Reform Bills, to be enacted in the near future. The bill is a response to the fiscal woes the government has endured in recent years, aimed at making the tax system more progressive and equitable to all Nigerians.

In addition to the hike in individual income tax for the rich, the government is also taking other measures to stimulate economic growth. These include further investment in important sectors like housing, agriculture, and infrastructure. Minister Edun clarified that such sectoral development will help alleviate unemployment and create long-term stability.

Edun also noted that although Nigeria’s economy has been faced with challenges, there have been some improvements. For instance, in the fourth quarter of 2024, Nigeria recorded a 3.84% growth in GDP, which was an improvement from the previous slowdowns. Also, inflation has been brought under control, and there has been a trade surplus, all of which ensure that the country is fiscally healthy.

The Nigerian government is certain that the tax reforms will result in increased revenue collection, which will be crucial in the maintenance of national development programs.

The Finance Minister also added that the activities are all part of a larger strategy to have a more investor-friendly environment by efforts to build public-private partnerships.

With the ongoing reform process, the government seeks to broaden the tax burden, especially on the country’s wealthiest citizens, while promoting economic growth and investment in key sectors. The 25% tax rate on personal income will increase revenue for the government, which will be invested in infrastructure construction and other key national projects.

These new tax regulations will be met with a mixed reaction, but the government is adamant: the reforms are crucial in making Nigeria’s economy more robust and building a more sustainable tomorrow for all citizens.