LunagisthubNigeria’s New Tax Laws: A Boost to Workers’ Salaries
The Nigerian government has introduced a new tax law that came into effect in January 2026, bringing relief to millions of workers in the country. The law exempts workers with an annual gross income of N1.2 million or less from paying tax, which translates to a taxable income of N800,000 or less. This move is expected to benefit about 98% of Nigerian workers, who will either pay lower taxes or be excluded from paying taxes altogether .
Under the new law, workers earning below the national minimum wage will not pay taxes. Additionally, employees earning annual gross incomes between N1.2 million and N20 million will pay lower taxes. The tax rates will be progressive, with a maximum rate of 25% for income exceeding N50 million.
The new tax law is expected to increase workers’ take-home pay, as they will have more disposable income. According to Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, the reforms are designed to ease the burden on low- and middle-income earners. Workers who have received their January salaries have already started noticing the impact of the new tax law, with some reporting higher take-home pay due to reduced Pay-As-You-Earn (PAYE) deductions .
The new tax law is part of a broader effort to simplify Nigeria’s tax system, reduce multiple taxation, and promote fairness across income groups. The government aims to stimulate economic growth and improve disposable income for citizens. By exempting low-income earners from paying taxes, the government hopes to reduce the burden on the most vulnerable members of society and promote economic stability .
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