The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has assured Nigerians that the proposed tax reform bills currently before the National Assembly are designed to benefit workers, contrary to claims by the Nigeria Labour Congress (NLC).
Joe Ajaero, the President of the NLC, had earlier called for the withdrawal of the bills, citing concerns over inadequate stakeholder engagement. “The NLC wants to join hands in co-creating a new national tax law that would enjoy wider acceptance and fulfill its purpose of propelling national development,” Ajaero said in his 2025 New Year message.
Responding to these assertions, Oyedele stated that while robust debates and improvements are welcome, the proposed reforms are the most pro-worker tax policies in Nigeria’s history. “These bills, in their current form, are structured to significantly improve the welfare of Nigerian workers,” he declared in a statement shared on his social media handle.
Lower Taxes for Workers
According to Oyedele, the reform bills propose substantial tax relief for low- and middle-income workers. He revealed that workers earning up to ₦1 million annually (approximately ₦83,000 monthly) would be fully exempt from the Pay-As-You-Earn (PAYE) tax. This, he explained, would benefit about one-third of all workers in the private and public sectors.
For higher earners, PAYE tax rates would also be reduced for those earning up to ₦20 million per annum (around ₦1.7 million monthly). “This translates to more disposable income for workers and a direct response to the rising cost of living,” Oyedele emphasized.
In a significant gesture to frontline security personnel, members of the armed forces engaged in combating insecurity will also be exempted from PAYE tax under the reforms.
Cost of Living Measures
The tax reform bills include provisions aimed at easing the financial burden on households, particularly in essential sectors. Oyedele highlighted that the proposed reforms would introduce zero Value Added Tax (VAT) on food, healthcare, and education—expenses that represent about 60% of household consumption.
Other essentials, including transportation, renewable energy, baby products, sanitary towels, and fuel products, would also enjoy VAT exemptions. “These items constitute an average of 82% of household consumption and nearly 100% for low-income earners,” Oyedele noted.
Worker Incentives and Housing Relief
The reforms aim to incentivize higher compensation for workers through tax breaks on wage awards and transport subsidies for low-income earners. Bureaucratic restrictions on wage increases would also be removed, alongside the introduction of a cap on the taxable amount of benefits in kind.
In the housing sector, the reforms propose VAT exemptions on rent and property purchases, along with stamp duty exemptions on rents below ₦10 million. “These measures are designed to promote affordable housing for workers,” Oyedele stated.
Stimulating Employment
The reforms are also geared toward job creation, with tax incentives for employers to hire more workers and encourage remote work opportunities for Nigerians. Small and Medium Enterprises (SMEs), which constitute the backbone of the economy, would benefit from tax exemptions, while large corporations would see harmonized and reduced corporate tax rates.
“These policies aim to stimulate business growth and create employment opportunities for Nigerian workers,” Oyedele said.
NLC’s Concerns Addressed
While acknowledging the NLC’s interest in contributing to the tax reform process, Oyedele reassured the labor union that the reforms align with workers’ interests. “We believe the NLC will not intentionally work against the interest of its members,” he said.
Oyedele invited further discussions to address any specific areas of concern. “We look forward to engaging with the NLC to refine the bills and ensure they better serve the interests of all Nigerians, including workers,” he concluded.
Background and Context
President Bola Ahmed Tinubu’s administration has been vocal about its commitment to economic reforms, with tax policy identified as a critical area for intervention. The proposed reforms are part of broader efforts to modernize Nigeria’s tax system, reduce inefficiencies, and address economic challenges exacerbated by the removal of fuel subsidies.
However, the reforms have sparked heated debates, with labor unions expressing concerns about their potential impact on the average Nigerian. The NLC’s call for the withdrawal of the bills underscores the need for inclusive dialogue as the legislative process unfolds.
As Nigerians await the outcome of these debates, Oyedele’s assurances provide a glimpse into the government’s vision for a tax regime that prioritizes workers’ welfare while fostering economic growth. Whether this vision aligns with the realities of implementation remains a question for lawmakers, labor unions, and citizens alike.
