In a significant policy shift, the Nigeria Revenue Service (NRS) has announced that low-income earners will be the primary beneficiaries of new tax laws introduced by President Bola Ahmed Tinubu. During a recent interview on Arise Television, NRS Executive Chairman Zacchaeus Adedeji emphasized that these reforms are designed to alleviate the financial burdens of the country’s poorest citizens.
Adedeji clarified that the government is not increasing tax rates but instead has implemented extensive exemptions aimed at protecting low-income households. He noted that over 95% of poor Nigerians are completely exempt from the new tax regime.
A key component of these reforms is the complete removal of Value Added Tax (VAT) on food items, which is particularly beneficial since food constitutes approximately 90% of the disposable income for low-income families. Adedeji explained, “We removed VAT totally from food items. The same thing applies to transportation, which also largely affects the poor.”
These changes are part of a broader strategy to reduce the cost of living for Nigeria’s most vulnerable populations. The NRS believes that when considering all the exemptions and relief measures, low-income earners will see a net benefit from the reforms, with Adedeji stating, “The poor are the most beneficiaries of this tax reform.”
The implementation of these new tax laws comes at a critical time, as Nigeria grapples with economic challenges, including rising inflation and a need for sustainable growth. The Central Bank of Nigeria projects a GDP growth of 4.49% in 2026, attributing this positive outlook to structural reforms, including the tax changes.
As the government moves forward with these reforms, there remains a cautious optimism among economists and citizens alike that they will indeed provide much-needed relief to Nigeria’s poorest while fostering broader economic growth.
