Oyedele says 2026 tax laws will boost small firms, protect low earners

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, says new tax laws taking effect in January 2026 will “empower all Nigerians.”

Mr Oyedele shared the insight at a media workshop on Friday in Lagos.

He said previous reforms created multiple taxes that burdened the informal sector, which he described as “the backbone of development.”

He said government has now made it easier for small firms to expand, adding that the reforms give incentives for registration and structured growth.

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“If we make life easy for them, the nano becomes micro, micro becomes small, small becomes medium, medium becomes large, and large becomes multinational,” he said.

He said the Company Income Tax (CIT) has been cut to 25 per cent, while firms with turnover below N100 million will pay zero CIT.

“You now have the motivation to formalise your business, because you have tax benefits rather than the disadvantage we used to see,” he said.

He added that tax is only “the icing on the cake,” stressing that formalisation forces businesses to become more organised.

He said every informal business that formalises and grows supports inclusive national growth.

“If big companies grow by 40 per cent, few will feel it. If the informal sector grows by 2 per cent, all Nigerians feel it,” he said.

He said the reduction of corporate tax from 30 to 25 per cent would help attract more Foreign Direct Investment.

He recalled the economic shocks of two years ago, which pushed tax-to-GDP below 10 per cent and left government spending 97 per cent of revenue on debt service.

The new reforms would eliminate and harmonise multiple taxes that previously weakened Nigeria’s global competitiveness, he said.

“We have one of the highest tax burdens on businesses worldwide. We rank in the top ten,” he said.

He said low income earners, who paid 96 per cent of income tax in the past, would now benefit from full tax exemption.

“If you are a low income earner, you are exempted from paying tax from January next year,” he said.

He added that those earning N100,000 or below would receive further support through VAT relief on essential items.

Mr Oyedele said Nigeria narrowly avoided economic collapse in 2023 but is now on a recovery path due to the reforms.

The tax expert said the difficult measures introduced since mid-2023 were necessary to stabilise the macroeconomic climate and rebuild investor trust.

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He stressed that Nigeria’s economic situation would have been worse without the reforms.

Mr Oyedele rejected claims that government has increased taxes or borrowed excessively. He listed cancelled, reversed or harmonised taxes, and highlighted reforms that strengthen the capital market.

He added that the new law introduces zero VAT on food, education, health, rent and transportation.

(NAN)