More specifically, the figure cited is 97–98% of Nigerians being exempted (or paying a reduced amount), with only the top 2–3% paying more.
The exemption is part of a broader tax reform: President Bola Tinubu signed four tax reform bills in June 2025 (Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Act, Joint Revenue Board Act).
Oyedele explained the reforms are aimed at protecting low-income earners (i.e. “we cannot tax poverty”) and ensuring the tax burden shifts toward higher earners.
Under the new laws:
Low-income workers will either no longer pay PAYE or pay less.
High-income earners (the small percentage remaining) will bear a higher tax burden.
There is also mention of aligning capital gains tax with income tax, and raising the personal income tax (top) rate to 25%.
Corporate tax rate will reduce from 30% to 25%.
Massive shift in tax coverage
If implemented as stated, this will significantly reduce the number of people paying PAYE in Nigeria, transferring the burden to higher earners. The idea is to relieve low-income households.
It’s not clear whether all of the 97–98% will pay absolutely zero, or whether many will just pay less. The statements suggest a mix: “no longer pay” or “pay less.”
Exempting so many may reduce revenue collected via PAYE. The government may try to compensate via:
Higher contributions from top earners,
Broadening other taxes (e.g., indirect taxes, corporate taxes),
Improving tax compliance and administration.
Translating lofty policy statements into legal, administrative frameworks can be hard.
Ensuring states and local governments accept revenue shifts.
Avoiding leakages, corruption, tax evasion or distortions.
This is likely to be politically popular among low-income citizens.
But it may raise debates about fairness, accountability, and whether higher earners will really pay more.
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