The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has stated that pastors, imams, and other religious workers must pay tax on the salaries they receive from their religious institutions. He explained that although churches, mosques, and similar bodies are exempt from taxation under Nigerian law, this exemption does not apply to individuals who work for them and earn a salary.
Oyedele made this clarification during an appearance on the Mic On podcast, where he discussed the country’s tax system and recent efforts to reform it. According to him, there is widespread confusion across the country regarding the tax obligations of religious organisations and those employed by them.
In his explanation, Oyedele stressed that the law clearly distinguishes between religious institutions as organizations and the individuals they employ. He noted that while religious bodies are generally exempt from paying company income tax because they are classified as non-profit organizations, their employees are still required to pay personal income tax like workers in any other sector.
“So what the law says is that the church and the mosque will not pay tax unless they start doing business as an institution or organization. But anybody they pay, whether it’s the pastor, whether it’s the choir… because these people are just working, it just happens that they are working in God’s vineyard,” he said.
Oyedele added that a pastor’s spiritual role or an imam’s religious duty does not automatically exempt them from tax responsibilities when they earn formal salaries. He said this applies equally to administrative staff, music ministers, church office workers, mosque attendants, and others who receive payment for their work.
For many years, the issue of taxation in Nigeria, especially as it relates to religious institutions—has been sensitive and often misunderstood. Nigeria is one of the most religious countries in the world, with millions belonging to Christian or Muslim denominations. Churches and mosques operate nationwide, some with large congregations, extensive administrative structures, and thousands of workers.
Even though the law does not require religious institutions to pay tax, public debate has often arisen over whether workers within these institutions should be exempt. Some Nigerians argue that religious workers serve a spiritual purpose and should therefore not be taxed, while others insist that since they earn salaries, they should be treated like any other employees.
Oyedele’s statement seeks to provide clarity at a time when the government is working to strengthen the tax system and expand the tax base. His comments come amid broader national discussions about how to improve revenue without increasing hardship for already struggling citizens.
The Presidential Committee on Fiscal Policy and Tax Reforms, led by Oyedele, was set up by President Bola Tinubu to review Nigeria’s tax structure, reduce the number of taxes, block leakages, and make the system simpler and fairer. The committee has been engaging with different stakeholders, including business owners, labour unions, civil society groups, and religious leaders.
One of the major goals of the committee is to reduce the cost of tax compliance and remove unnecessary levies, while ensuring that the government generates enough revenue to fund essential services like security, education, and healthcare. Oyedele has repeatedly said that Nigeria’s problem is not that it collects too little tax, but that the system is inefficient, burdensome, and confusing.
By clarifying the tax status of religious workers, the committee aims to remove another area of misunderstanding that has existed for many years.
Under Nigerian law, anyone who earns an income from a formal job is required to pay personal income tax. This tax is usually deducted directly from salaries through the Pay-As-You-Earn (PAYE) system. Employers—whether private companies, government institutions, NGOs, churches, or mosques are required to deduct this tax and remit it to the relevant state government.
This means that a pastor who receives a monthly salary should have taxes deducted the same way a teacher, banker, or civil servant would. The same applies to imams and other religious employees.
However, many religious institutions do not implement this deduction consistently, partly due to confusion about the law and partly due to internal administrative practices. Oyedele’s comments are expected to trigger conversations among religious leaders about putting proper payroll systems in place.
Although Oyedele’s clarification is based on existing law, the statement has sparked debate among Nigerians. Some citizens believe the clarification is long overdue, arguing that all Nigerians who receive salaries should contribute to the nation’s tax system. They say this will ensure fairness and help the government raise revenue without creating new taxes.
Others, however, argue that many religious workers earn modest incomes and should not be taxed heavily. Some also fear that taxing pastors and imams could create tension, especially in rural communities where religious leaders play important social and humanitarian roles.
Despite these concerns, tax experts say the law is clear: income earned from employment—regardless of the employer—must be taxed.
Oyedele also addressed another important area: the business activities of religious institutions. He explained that while churches and mosques are exempt from tax when operating as non-profit religious bodies, they are required to pay tax if they run commercial ventures.
For example, if a church runs a bakery, farm, printing press, or school that charges fees, those business operations must pay tax like any other business. But income from offerings, tithes, donations, and religious activities remains tax-exempt because it is not considered profit-making.
This clarification is especially important given the growing number of religious institutions involved in large-scale business operations across the country.
With the government pushing for tax reforms, experts expect that religious institutions will come under increasing pressure to comply with PAYE rules. State tax authorities may also begin to engage religious organisations more actively to ensure proper remittance of personal income taxes.
Oyedele highlighted that the intention of the reforms is not to punish anyone but to create a fair system that works for everyone. He added that the government wants to make taxes simpler and easier so that the average Nigerian understands their obligations.
