Government flaunts tax relief, poor still struggle

Nigeria’s incoming tax legislation introduces 50 forms of relief targeting workers earning modest incomes and smaller enterprises starting from January 1, 2026. Taiwo Oyedele, who leads the Presidential Fiscal Policy and Tax Reforms Committee, detailed the provisions through social media channels, describing them as measures focused on fairness and economic expansion.

Workers receiving minimum wage compensation face no personal income tax obligations, while annual earnings below N1.2 million remain entirely exempt. Employees making up to N20 million yearly benefit from lower withholding rates. Pension contributions, health insurance payments and housing fund deposits qualify as deductions, along with mortgage interest for primary residences. Tenants can claim 20 percent of yearly rent expenses capped at N500,000. Retirement accounts and severance payments stay tax-free, with job loss compensation exempt up to N50 million.

Companies generating under N100 million annually with assets below N250 million pay zero corporate tax. Agricultural operations receive five-year exemptions. Basic groceries, educational materials, medical services and pharmaceutical products carry no value-added tax, while transport and housing rentals remain exempt. Electronic transfers under N10,000 avoid stamp duties. Small businesses escape withholding requirements and development levies.