Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, states that Nigerians earning about N250,000 per month will be exempt from tax.

“We came up with 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. 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,” said Mr Oyedele in an interview with Channels TV on Thursday, shortly after President Bola Tinubu approved four new tax bills on the same day. 

“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,” Mr Oyedele said.

He added, “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 debated this question. We said: Who is a poor person in Nigeria?”

The discussion began with data from the World Bank and the UN, which indicate that $2.15 per day per person is considered the poverty line, Mr Oyedele noted. However, according to him, some people do not earn $2 a day.

“But they are not poor because they produce the food they eat and do not pay for transportation. I lived and grew up in the village,” the presidential tax adviser said. “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.”

He further explained, “Two people working, if they are lucky, taking care of the five. When we did the math, it gave us an amount, and that was what we used in determining the income below which nobody should pay taxes.”

Following the removal of fuel subsidy and the floating of the naira, millions of Nigerians have been plunged further into poverty amid galloping inflation, with many Nigerians now living below the poverty line of $2 per day.

Although the new tax laws would not take effect until January 2026, Mr Oyedele stated that they were not intended to increase taxes but to stimulate economic activities and track tax evaders.