Why Nigerians earning below N250,000 monthly won’t pay income tax — FG

Nigerians earning less than N250,000 per month will no longer be required to pay income tax, following the signing of new tax legislation by President Bola Tinubu.

This was confirmed by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during an appearance on Channels Television’s Politics Today on Thursday.

The administration said the newly signed tax laws are designed to invigorate economic growth, reduce the burden on low-income earners, and improve the government’s ability to track tax evaders—without imposing taxes on those living in poverty.

Oyedele explained that individuals and households earning N250,000 or less each month are now considered to fall below the poverty threshold and will be excluded from taxation.

“How can anyone earning N30,000 monthly survive? We propose that those earning up to N1million annually, including allowances, should be exempt from tax,” he had previously remarked, noting that the proposal mirrors tax policies in several other African nations and aims to promote equity and fairness.

According to Oyedele, the N250,000 threshold was determined based on national poverty data and family structure assumptions. The committee used an average family size of five, typically supported by two income earners, each making about N120,000 to N130,000 monthly.

“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 stated.

He also noted that a small segment of the population—about 5%—earns between N1.8 million and N2 million monthly. While these individuals will still be taxed, their rates will be adjusted downward.

“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,” he added.

The tax exemption for low-income earners is set to take effect in January 2026 and is part of broader reforms intended to support households, encourage business activity, and promote economic stability.