The Executive Chairman of the Nigeria Revenue Service, Zacchaeus Adedeji, stated in a television interview that the poor are the main beneficiaries of the new tax reforms.
He said the government is not taxing more, adding that looking at all the exemptions, more than 95% of the poor are totally exempted. The NRS boss stressed that removing VAT on all food items is still to the advantage of the poor because 90% of disposable income for the poor goes to food.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, also confirmed that the bottom 90% of salaried workers will either be fully exempt from Pay-As-You-Earn tax or see their burden significantly reduced.
He declared that the reforms are designed to provide relief for the majority of Nigerians. Under the personal income tax category, individuals earning the minimum wage or an annual gross income of up to ₦1.2 million will be exempt from tax.
Basic food products, educational materials and services, and pharmaceuticals are also exempt from VAT. Small businesses with annual turnover not exceeding ₦100 million and total assets below ₦250 million will be fully exempt from corporate income tax, while agricultural companies will enjoy a five-year tax holiday.
The 2026 reforms also introduced a tax-free threshold where individuals earning ₦800,000 or less annually are now completely exempt from personal income tax, providing immediate breathing room for low-income earners.
For the first time, taxpayers can also claim a 20% deduction on annual rent, capped at ₦500,000, when computing their chargeable income.
However, critics urge caution. Independent analysts note that implementation will ultimately determine whether ordinary Nigerians actually benefit, warning that the design alone does not guarantee outcomes and urging close monitoring in coming fiscal cycles.
Some economists and business groups have also warned that the reforms could unintentionally raise the cost of formalisation for already pressured micro and small enterprises, with one expert cautioning that a rigid, enforcement-heavy approach risks undermining reform credibility before its benefits have time to materialise.