•Taiwo Oyedele
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said that no fewer than 98 per cent of Nigerian workers would be exempted from paying personal income tax when the new tax regime takes effect in January 2026.
Speaking at the First Bank SME Connect webinar themed, ‘Strategies for SMEs: Securing Your Business under the New Tax Law’, Oyedele said the reforms are designed to ease the burden on low-income earners while ensuring equity in the system, reports The Guardian.
According to him, anyone earning the current national minimum wage of N70,000 will be completely exempted from tax.
He added that even those on slightly higher pay, up to N80,000 or N90,000 monthly, will also fall under the exemption threshold.
Only individuals earning above N2 million per month would experience an upward review in personal income tax, he stressed. Unveiling a raft of incentives targeted at small businesses, Oyedele said enterprises with annual turnover not exceeding N100 million would, from 2026, be exempt from paying value-added tax (VAT).
He added that withholding tax on services rendered by small businesses would also be removed to free up capital and improve cash flow. For operators in agriculture, healthcare and education, the reforms introduce a zero-rated VAT system allowing them to reclaim input VAT on purchases while charging no VAT on services.
He also announced the creation of a Tax Ombudsman Office, an independent body established to protect taxpayers, particularly SMEs, from harassment and arbitrary enforcement actions.
“This new office has been set up particularly to protect small businesses. Nobody would just come and seal up your premises or harass you and take your items,” Oyedele assured participants.
Addressing concerns about capital gains tax, Oyedele clarified that individuals with shareholdings worth less than N150 million are exempt from the 30 per cent capital gains tax, a provision he said covers over 99 per cent of investors.
He warned against reliance on unverified social media commentary for tax guidance.
On tax refunds, he said the new law mandates that refunds be set aside before monthly revenue distribution to government tiers, with VAT refunds to be processed within 30 days through dedicated accounts.
Earlier, Head of SME Banking at First Bank, Abiodun Famuyiwa, disclosed that the bank disbursed more than N200 billion to small and medium-scale businesses last year, including N100 billion to traders.
He noted that most of the loans were non-collateralised and reaffirmed the bank’s commitment to easing barriers to SME growth through digital products and specialised financing programmes, particularly for women-led enterprises.
Oyedele urged eligible families to leverage the National Education Loan Fund (NELFUND) and announced that the National Single Window for trade facilitation is nearing completion.
“Instead of using N500,000 to pay school fees, you can get that money from NELFUND, and the N500,000 goes into expanding your business,” he advised, noting that beneficiaries only begin repayment after securing employment.
He also dispelled widespread misconceptions surrounding tax identification requirements for bank accounts. He explained that the rule mandating Tax Identification Numbers (TINs) for business accounts has been in force since January 2020, following the 2019 Finance Act.
He dismissed speculations of mass account closures or arbitrary debits, stating that the requirement applies strictly to business accounts, not personal savings accounts.
