New tax law exempts 97% of informal businesses nationwide

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, has announced that Nigeria’s new tax law exempts 97 per cent of informal sector operators from paying taxes, a move he says aims to give low-income earners space to grow.

Speaking on Monday, July 21, at PwC’s Executive Summit in Lagos, themed “The New Tax Era: What Nigeria’s Tax Reform Means to Individuals and Businesses”, Oyedele explained that only the top three per cent of the informal sector possess the capacity to pay taxes.

“From our analysis, it is only the top three per cent of the informal sector that has the ability to pay. Therefore, in these reforms, we have legally exempted the bottom 97 per cent from paying taxes. Let them breathe,” he stated.

Oyedele stressed the global difficulty of taxation, noting, “Nigerians are not bad people. They’re not worse than people who live in other countries where things work. The difference is the system.”

He issued a clear warning against tax evasion, adding, “If you lie and say your business is small when it is not, we will find out, and there shall be consequences.”

Entertainment news Celebrity gossip Movie and TV show updates Latest celebrity news Trending entertainment stories Stipulations of FG’s New Tax Law

The new law, set to take effect on 1 January 2026, introduces progressive taxation across all major tax types. Employees earning less than N800,000 annually are now exempt from personal income tax.

The law also harmonises federal taxes, designating the Federal Inland Revenue Service as the sole federal tax collector.

Oyedele further disclosed that the gazetted version of the law is being finalised in Lagos and will soon be released to the public.

In his remarks, Sam Abu, Regional Senior Partner of PwC’s West Market Area, emphasised that policy alone was insufficient.

“Real change requires partnership and commitment… It requires us to engage with the spirit of these reforms with sincerity, integrity, and optimism,” Abu said, urging all stakeholders to play their part in ensuring the reforms succeed.

Abu also highlighted PwC’s mission to simplify taxation and help clients anticipate risks, ensuring businesses remain focused on growth and impact.