New tax laws to target wealthy earners, not the poor

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has reiterated that the new tax laws scheduled to take effect from January 2026 will target wealthy earners, not the poor.

Oyedele restated this on Friday during an interactive session with journalists in Lagos, explaining that the new tax laws would not hurt ordinary Nigerians. He also dismissed fears of direct bank debits.

He further reassured Nigerians that the new tax laws were designed to ease the burden on citizens rather than worsen their challenges.

“The new legislation, which will become effective from January 2026, will end a situation where the poor bear the tax burden, eliminate multiple nuisance levies, and ensure that 97 per cent of small businesses pay zero corporate tax from next year,” Oyedele said.

Speaking further, the chairman of the tax reforms committee warned that widespread misinformation was fuelling unnecessary fear among the public.

According to him, many of the reforms — from input Value Added Tax (VAT) refunds on everyday purchases to exemptions for small businesses — represent benefits Nigerians are yet to fully understand.

“The top two per cent of earners, not ordinary citizens, will bear the bulk of the new obligations, while long-standing requirements like the Taxpayer Identification Number (TIN) for bank accounts are being misunderstood as new rules,” he said.

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“The January 2026 rollout will be fair, technology-driven and transparent. As you can see, the government’s continuous engagement before and after the passage of the law shows a sincere commitment to smooth implementation and genuine reform.”

Oyedele also addressed growing concerns that the Federal Government would begin deducting money directly from bank accounts once the new tax laws take effect. He explained that Nigeria’s Company Income Tax (CIT) rate, which has remained at 30 per cent since 1996, would be reduced to 25 per cent under the new framework.

He said the reform was aimed at boosting investment and modernising the tax system, adding that more than 99 per cent of stock market investors would remain exempt from Capital Gains Tax (CGT). Only the top one per cent, typically large institutional investors, would be liable — and even they could avoid the tax by reinvesting their gains.

“Let me be clear: nobody will debit your account. There is no scenario under the current laws or the upcoming ones where the government can simply take money from you because they think you should pay more tax,” he said.

“As you all know, even in rare cases where taxpayers owe liabilities, the law requires a structured process involving notices, assessments, the right to dispute, and ultimately a court order.

“I have been involved in tax administration for nearly three decades, and I have never seen one instance where this power was used to take a single naira.”

On monitoring individuals, Oyedele explained that banks would only report accounts where transactions exceed ₦25 million in a quarter, or ₦100 million annually, and such individuals would be required to have a TIN.

On CIT, he added: “Nigeria’s CIT rate has been 30 per cent for the past 30 years. The reduction to 25 per cent is part of broader reforms to close gaps, incentivise formalisation and promote growth. Before you even get to paying 25 per cent of your income as tax, you must be earning at least ₦20 million annually, which is not a small amount anywhere in the world.”

Oyedele noted that small businesses with annual turnover below ₦100 million would pay zero CIT, encouraging formalisation. On CGT, he said the reforms were designed to promote long-term investment while protecting small and retail investors.

“For the capital markets, we have exemptions for virtually everyone. If you sell not more than ₦150 million worth of shares in a year and your gains are no more than ₦10 million, you are permanently exempted — no questions asked. That threshold covers more than 99 per cent of investors,” he said.

“The remaining investors are less than one per cent. Pension funds, mutual funds and Real Estate Investment Trusts are all unconditionally exempt. Whatever is left of that one per cent can also avoid CGT by reinvesting their proceeds.”