98% of Nigerian Workers to Be Exempted From Personal Income Tax by 2026 — Oyedele
The chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, says that about 98% of Nigerian workers will no longer pay personal income tax when the new tax system begins in January 2026.
Speaking at the First Bank SME Connect webinar titled “Strategies for SMEs: Securing Your Business under the New Tax Law,” Oyedele explained that the new reforms aim to reduce the financial burden on low-income earners and make the tax system fairer.
He said anyone earning the national minimum wage of N70,000 will be fully exempt from tax. Even those earning N80,000 to N90,000 per month will also fall under the tax-free category.
Only people earning above N2 million per month will see an increase in their personal income tax.
New Benefits for Small Businesses
Oyedele also announced several incentives for small businesses:
- Businesses making N100 million or less per year will be exempt from VAT starting 2026.
- Withholding tax on services provided by small businesses will be removed to help them keep more money and improve cash flow.
- Agriculture, healthcare, and education businesses will enjoy a zero-rated VAT, meaning they can reclaim VAT on their purchases but will not charge VAT on their services.
New Tax Ombudsman to Protect SMEs
A new Tax Ombudsman Office has been created to protect taxpayers—especially small businesses—from harassment or unfair treatment.
Oyedele said:
“Nobody will just come and seal your business or harass you and take your items.”
Capital Gains Tax Clarification
He explained that the 30% capital gains tax does not apply to people with shares worth less than N150 million, a rule that covers over 99% of investors. He warned the public not to rely on false tax information circulating on social media.
Faster Tax Refunds
The new law also makes tax refunds easier:
- Refunds must be set aside before revenue is shared among government levels.
- VAT refunds will be paid within 30 days from special accounts.
First Bank Support for SMEs
Head of SME Banking at First Bank, Abiodun Famuyiwa, said the bank gave out more than N200 billion to small businesses last year, including N100 billion to traders. Many of these loans did not require collateral. He reaffirmed the bank’s plan to continue supporting SMEs, especially women-led businesses.
Use NELFUND Instead of Business Capital for School Fees
Oyedele encouraged families to take advantage of the National Education Loan Fund (NELFUND), explaining that applicants will only start repayment after getting a job.
He said using loans for school fees will allow families to use their own money to grow their businesses.
TIN Requirement Applies Only to Business Accounts
He also corrected misinformation about Tax Identification Numbers (TINs). The rule requiring TINs for business accounts has existed since January 2020 after the 2019 Finance Act.
He stressed that the rule does not apply to personal savings accounts, and there will be no mass account closures.
