The Chairman of the Federal Inland Revenue Service (FIRS), Mr. Zacch Adedeji has said that new tax laws would take effect from 1 January 2026, under a renamed agency — the Nigeria Revenue Service.
In the same breath, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele said that under the new tax laws, Nigerian households earning N250,000 or less per month are classified as poor and exempted from paying taxes.
Earlier on Thursday, President Bola Tinubu signed the four tax reform bills into law.
The new regulations are the Nigeria Tax (Fair Taxation) Law, Nigeria Tax Administration Law, Joint Revenue Board (Establishment) Law, and the Nigeria Revenue Service (Establishment) Law.
The bills are expected to bring relief to Nigerians, restore fairness in the tax system, and ignite inclusive economic growth.
Addressing State House correspondents in Abuja, on Thursday, Adedeji said that imimplementing the laws from January 2026 is to allow ‘the administration six months for planning, education, and alignment with the fiscal calendar’.
He explained: ‘This is based on best practices globally, because when you have this kind of change, it takes time for all the stakeholders, participant operators, and even the regulator to change the system
‘When you have this kind of change, it’s not what you do mid-year, because, if the application of law is better, you start from the beginning of the year’.
Adedeji also praised the leadership behind the initiative.
He described the reforms as ‘a dream come true’, made possible by the ‘political will’ of the President and Oyedele’s maturity.
‘These reforms are about relieving people of multiple taxes, not about raising more taxes. There will be more money in the hands of ordinary Nigerians to take care of their daily needs’, Adedeji added.
Listing key changes in the laws, the taxman said that Value-Added Tax will no longer apply to food, medical services, education, and accommodation under the new tax regime, ‘easing the cost of living for many Nigerians’.
‘Enhanced Efficiency: The reforms empower the Nigeria Revenue Service with better technology and expanded authority to improve tax collection.
The Chairman of the House Committee on Finance, Hon. James Faleke highlighted President Bola Tinubu’s consultative approach.
He said: ‘The President did not dictate; he asked questions and encouraged us to provide answers. He urged us to stay the course and support the government in implementing these reforms’.
Faleke noted that the reforms would expand the tax base and improve revenue generation for both federal and subnational governments.
‘By 2026, subnational governments should expect an increase in their tax rolls, thanks to these reforms and the use of technology’, he said.
The Chairman of the Senate Committee on Finance, Senator Sani Mohammed recalled the rigorous legislative process.
He said that, when the bill was introduced, ‘it faced uproar, but through extensive consultations, we crafted laws that reflect Nigerians’ aspirations, protect the less privileged, and consider key sectors like oil and gas’.
Featuring on Channels Television’s Politics Today a few hours after President Tinubu assented to four new tax bills, Oyedele, former tax leader at PriceWaterhouseCoopers (PwC), said that the objectives of the new laws, which would take effect from January 2026, were not intended to increase taxes but to stimulate economic activity in the country and track tax evaders.
Oyedele stated that the new laws would also protect businesses and ensure that the government doesn’t tax poverty, adding that the new laws are efficiency-driven, growth-focused, and people-centric.
He said: ‘This tax law will not give you cash in your pocket, but at least it won’t take your cash away if you are poor’.
‘We have eliminated the tax component for people at the bottom, we have reduced for people at the middle, and we have increased slightly for people at the top.
‘That middle, we estimated it at about N1.8 million to N2 million a month. If you are earning that amount and below, your tax will not be zero but it will reduce from what you are paying today’, he said, noting that those who earn this amount are about 5% of the total Nigerian population.
The tax boss said that, to arrive at a decision, his committee debated the poverty line of an average Nigerian.
Oyedele said: ‘We debated this question; we said: “Who is a poor person in Nigeria”?
‘First, we started with data like the World Bank and the UN will tell you two dollars, fifteen cents a day per person means you are at the poverty line but there are people who do not earn two dollars a day but they are not poor because they produce the food that they eat and they do not pay for transportation. I lived and grew up in the village.
‘So, we had to factor that in. We drew our own (poverty) line for Nigeria on the basis of an average of five people per family: two people working if they are lucky, taking care of the five.
‘When we did the Maths, it gave us an amount, and that was what we used in determining the income below which nobody should pay taxes.
‘We came up with a N120,000 or N130,000 per two people working in a household of five. If the earnings are about N250,000, they can take care of themselves. Of course, they are not going to have luxury, but at least they can take care of themselves. They are poor, and they shouldn’t pay taxes’.
Oyedele said that Nigeria currently collects only about 30% of what the country should be receiving in taxes, noting that the objective of the new tax laws is to close the 70% gap.
