New tax law boosts take-home pay for Nigerian workers

Workers receiving January 2026 salaries are reporting lower PAYE tax deductions and higher take-home pay under newly implemented tax reforms, according to Taiwo Oyedele, Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms. Oyedele shared feedback from employees on Monday via X, confirming the reforms are already easing tax burdens for salary earners whose taxes are deducted at source.

The reforms, which took effect January 2025, are based on the Nigerian Tax Act and Nigerian Tax Administration Act. Oyedele previously stated that 98% of Nigerian workers will either pay no PAYE tax or pay lower rates. Large companies also benefit from reduced liabilities, while approximately 97% of small businesses are exempt from corporate income tax, VAT, and withholding tax.

The Committee is partnering with the Joint Revenue Board to host an online engagement session this week for HR Directors, Payroll Managers, CFOs, and Tax Managers. The session aims to clarify compliance requirements and address implementation gaps to ensure employers apply the new Personal Income Tax provisions correctly. This follows the government's goal of simplifying tax administration, reducing multiple taxation, and improving disposable income across income groups.

While early feedback is positive, Oyedele emphasized that further engagement is needed for correct implementation. Are you seeing changes in your January salary, and do the new rates reflect what you expected?

SOURCE: https://www.channelstv.com/2026/01/26/paye-cuts-increased-workers-take-home-pay-in-january-oyedele/