By Nworisa Michael
The Federal Government has clarified key aspects of Nigeria’s new tax reforms, outlining four categories of Nigerians who are exempted from paying personal income tax under the revised framework.
The clarification was made on Wednesday, January 1, 2026, by Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during a televised interview and subsequent public engagements addressing widespread concerns about the new tax regime.
Oyedele explained that the reforms were introduced to ease the financial burden on vulnerable citizens while improving fairness, transparency, and voluntary tax compliance across the country.
According to him, individuals earning the national minimum wage or less are fully exempt from personal income tax. He also clarified that Nigerians with an annual gross income of up to ₦1.2 million, after allowable deductions, are not required to pay personal income tax under the revised rules.
For middle-income earners, Oyedele stated that those earning up to ₦20 million annually will benefit from reduced Pay-As-You-Earn tax rates, noting that the policy is designed to strike a balance between social protection and sustainable government revenue.
The tax reform committee chairman further clarified that gifts and non-commercial personal transfers are not taxable, dismissing claims circulating online that every naira entering a personal bank account would automatically attract tax.
Oyedele stressed that Nigeria’s tax system remains based on self-declaration of income, adding that taxation applies only to legitimate taxable earnings and not to personal gifts, family support, refunds, or private transfers.
He said the reforms are aimed at protecting low-income earners and small-scale operators, encouraging trust in the tax system, and reducing harassment by tax authorities, especially among informal sector workers.
The Federal Government reiterated that the new tax framework is part of broader fiscal reforms to modernise Nigeria’s revenue system while safeguarding citizens with limited earning capacity.