By Segun Adeyanju
Nigeria’s recently implemented tax reform is already boosting take‑home pay for many workers, with early payroll data showing a noticeable decline in Pay‑As‑You‑Earn (PAYE), deductions in January salaries.
The changes stem from the tax overhaul introduced under the Presidential Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele.
A key adjustment in the new regime is increasing the annual tax‑free threshold to ₦800,000, meaning more workers now pay less in income tax or, in some cases, no tax at all on their earnings.
According to early feedback from employees and human resource managers across sectors, reduced PAYE deductions have already translated into higher net pay this month.
The reforms aim to ease the financial burden on formal sector workers by increasing disposable income and improving overall welfare.
Oyedele said the initial results demonstrate the government’s commitment to ensuring that the benefits of tax reform reach ordinary salary earners, particularly those in the formal workforce where PAYE remains the primary income tax mechanism.
The committee is coordinating with the Joint Revenue Board and employers to ensure uniform application of the new tax provisions.
Analysts say the early increase in take‑home pay reflects a broader effort to simplify Nigeria’s tax system, strengthen compliance and provide tangible relief to workers as part of wider economic reforms.
The tax changes officially took effect on January 1, 2026, and are part of a comprehensive overhaul designed to reduce tax liabilities for most workers and support economic growth.
