Income Below ₦800,000 Now Tax-Free 

Senator Solomon Adeola, Chairman of the Senate Committee on Finance 

In a welcome development for many Nigerians, the federal government has implemented a tax reform that exempts individuals earning ₦800,000 or less annually from paying personal income tax. This policy is part of broader efforts to reduce the financial burden on low-income earners and small business owners, especially in today’s challenging economic climate. 

Who Qualifies for the Exemption? 

This reform applies to: 

    Civil servants on minimum wage or lower salaries 

    Small traders, artisans, and informal workers 

    Private sector employees whose annual earnings do not exceed ₦800,000 

Before now, even those earning less than ₦70,000 monthly were taxed under the Pay as You Earn (PAYE) system. With this reform, thousands of workers will retain more of their income for essential needs like food, transportation, health care, and school fees. 

Impact on Nigerians and the Economy 

This exemption is a big win for many families struggling to make ends meet. It will: 

    Put more money in the hands of low earners 

    Encourage entrepreneurship as small-scale businesses can now reinvest savings 

    Reduce income inequality by easing the gap between the rich and poor 

“We want a fair tax system. No one earning ₦800,000 or less should be taxed out of survival. This reform protects the most vulnerable.”- Senator Solomon Adeola, Chairman of the Senate Committee on Finance 

What You Should Do 

If you fall within this income bracket: 

    Speak with your HR or payroll officer to ensure PAYE deductions are updated. 

    For informal workers, consult with your local tax office to confirm your tax status. 

    Keep proper records of your annual income to avoid future discrepancies.  

This tax reform is a lifeline to millions of Nigerians living on modest incomes. It provides financial breathing space, encourages savings, and promotes fairness in the tax system. As inflation and living costs continue to rise, this reform is a step toward economic justice for the everyday Nigerian.