Oyedele: Workers now record higher take-home pay as new tax laws reduce PAYE deductions

By Adewale Sanyaolu  and Chinwendu Obienyi

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said workers are already experiencing higher take-home pay following the implementation of the country’s new tax laws.

According to Oyedele, feedback from employees who received their January 2026 salaries shows a noticeable reduction in Pay As You Earn (PAYE) deductions, indicating early success of the reforms.

The changes stem from the enforcement of two new laws; Nigerian Tax Act (NTA) and Nigerian Tax Administration Act (NTAA).

The reforms aim to simplify Nigeria’s tax system, reduce multiple taxation, improve fairness, and increase disposable income.

Key highlights include: about 98 per cent of Nigerian workers will either pay no PAYE tax or reduced PAYE, 97 per cent of small businesses will be exempt from corporate income tax, VAT, and withholding tax.

Large companies will also benefit from lower overall tax liabilities. The reforms are designed to ensure Nigerians pay less tax overall, while improving compliance and efficiency.

Oyedele noted that while early feedback is positive, further engagement is needed to ensure correct implementation. To address this, the committee is partnering with the Joint Revenue Board to hold stakeholder sessions involving HR directors, payroll managers, CFOs, and tax professionals.

The engagement aims to resolve implementation gaps, clarify employer obligations, and ensure workers fully benefit from the reforms. The tax laws took effect in January 2026, despite controversies surrounding alleged alterations to the gazetted legislation.