New Tax Law in Nigeria Aims to Shield Low‑Income Workers and Small Investors

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has explained that the recently passed 2026 tax reform law is specifically designed to ease the burden on low‑income Nigerians and boost their disposable income. The reform seeks to end the taxation of poverty by raising income thresholds and expanding exemptions so that people with limited earnings keep more of what they make.

Speaking at the Cowry Quarterly Economic Discourse, Oyedele said the law provides automatic capital gains tax exemptions for individuals whose asset sale proceeds don’t exceed certain limits — meaning many small‑scale investors will not pay tax on those gains. He also highlighted that pension fund administrators and real estate trusts can benefit from reinvestment exemptions.

Oyedele clarified public misunderstandings about the tax thresholds, saying the often‑quoted ₦800,000 figure refers to taxable income after deductions, not gross income. Once standard reliefs are applied, those earning around ₦1 million to ₦1.2 million a year will be exempt from personal income tax, and people on the national minimum wage won’t pay tax at all.

He stressed that the reform corrects a system where a disproportionate share of personal income tax previously came from low‑income earners, calling it an inequitable situation that taxed those least able to afford it.