Tax Law: Households earning ₦250k considered poor, exempt from taxes – Oyedele

Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has said Nigerian households earning ₦250,000 or less per month are classified as poor under the new tax laws. On Thursday, June 26, 2025, President Bola Tinubu signed into law the four landmark Tax Reform Bills, heralding a new dawn in Nigeria’s tax collection and administration system. The signing followed months of policy work, reviews, controversies, and consultations aimed at overhauling the outdated tax system, which was largely considered archaic, complex, unfair, and burdensome for small businesses. Meanwhile, a few hours after Tinubu assented to four new tax bills, Oyedele, whose committee midwived the birth of the new tax laws, has recalled his experience through the journey. The former executive at the PriceWaterhouseCoopers (PwC) was appointed in July 2023 and has described his his two-year stint as chair of the tax reform committee as both eventful and challenging. He explained that the new laws were not designed to increase taxes but to stimulate economic activity in the country and track tax evaders. Oyedele says households earning 250k or less are exempted from paying taxes He added that the new legislature guarantees protection of businesses and ensures that the government doesn’t tax poverty, stressing that the laws are efficiency-driven, growth-focused, and people-centric. “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,” Oyedele said on Channels Television’s Politics Today on Thursday. “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 ₦1.8 to ₦2m 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 stated, noting that those who earn this amount are about 5% of the total Nigerian population. The tax expert disclosed that his committee decided after exhaustively debating the poverty line of an average Nigerian. “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 ₦120,000 or ₦130,000 per two people working in a household of five. If the earnings are about ₦250,000, 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. “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 ₦120,000 or ₦130,000 per two people working in a household of five. If the earnings are about ₦250,000, 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,” he explained.