The Federal Government has said that poor Nigerians are the main beneficiaries of the new tax reforms introduced under President Bola Tinubu’s administration. The assurance was given by the Nigeria Revenue Service (NRS), which explained that the reforms are designed to reduce the financial burden on low-income earners while improving government revenue in a fair way.
The Executive Chairman of the Nigeria Revenue Service, Mr Zacchaeus Adedeji, made this known during an interview on Arise Television on Sunday. He said claims that the government is increasing taxes on the poor are not correct, stressing that most low-income Nigerians are either exempted or protected under the new tax law.
According to Adedeji, more than 95 per cent of poor Nigerians are completely exempted from paying taxes under the new reforms when all exemptions are taken into account.
“The government is not taxing more,” he said. “When you look at all the exemptions, more than 95 per cent of the poor are totally exempted.”
He explained that the reforms were carefully structured to ensure that those who earn very little are not affected, while those with higher incomes and stronger financial capacity contribute more to government revenue.
One of the major highlights of the reforms, according to Adedeji, is the complete removal of Value Added Tax (VAT) on food items. He said this decision was taken because food accounts for the largest part of spending among poor households.
“We removed VAT totally from those ones,” he said. “If you look at poor Nigerians, about 90 per cent of their disposable income goes into food.”
By removing VAT on food items, the government believes it is directly easing the daily struggles of millions of Nigerians who are battling with high food prices and rising cost of living.
Transportation is another area where the government says the poor are being protected. Adedeji explained that the tax reforms also take into account the heavy spending of low-income earners on transportation.
“The same thing applies to transportation, which is also critical to the poor,” he said. “So if you look at the total and the net benefit, the poor are the most beneficiaries of this tax reform.”
The new tax reforms come at a time when many Nigerians are facing economic hardship due to inflation, high fuel prices, and reduced purchasing power. Since the removal of fuel subsidy in 2023 and the unification of the foreign exchange market, the cost of basic goods and services has increased, leading to public concern about government policies.
In response to these concerns, the Federal Government has repeatedly said that its reforms are necessary to fix Nigeria’s economy in the long term. Officials argue that the country cannot continue to rely heavily on borrowing and must increase revenue to fund development, infrastructure, healthcare, and education.
Nigeria’s tax-to-GDP ratio remains one of the lowest in the world, estimated at below 10 per cent. This means that compared to the size of its economy, Nigeria collects very little in taxes. Successive governments have identified tax reform as a key step toward improving public finances.
According to Adedeji, the goal of the new tax law is not to punish citizens but to build a fair and efficient tax system where those who can afford to pay do so, while the poor are protected.
He said the reforms also focus on widening the tax net rather than increasing tax rates. This means bringing more eligible taxpayers, especially in the formal and high-income sectors, into the system instead of placing more burden on those already struggling.
In recent weeks, there have been debates across the country about the impact of the new tax law. Labour unions, civil society groups, and opposition parties have raised concerns about how the reforms might affect ordinary Nigerians. Some have called for clearer communication and better public engagement.
The government, however, insists that the reforms are misunderstood. Officials say many people assume any talk of tax reform means higher taxes for everyone, which they argue is not the case.
Adedeji said the government understands the pain Nigerians are going through and would not introduce policies that worsen their situation.
“The intention is to support economic growth while protecting the vulnerable,” he said. “The poor are not the target of this reform.”
He added that removing VAT from essential items like food and reducing pressure on basic needs shows the government’s commitment to social protection.
Beyond tax exemptions, the Federal Government has also rolled out other support measures, including cash transfer programmes and palliative distributions, to cushion the effects of economic reforms. While these programmes have faced challenges in implementation, officials say efforts are ongoing to improve them.
For many Nigerians, trust remains a key issue. Citizens want assurance that any money collected by the government will be used responsibly and not wasted or lost to corruption.
As the debate continues, the Nigeria Revenue Service says it will keep engaging with the public to explain the reforms and address concerns. According to Adedeji, feedback from citizens is important in refining policies and ensuring fairness.
