Tax

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has reiterated that pastors, imams, and other religious workers are required to pay personal income tax on the salaries and allowances they receive from their religious institutions. His clarification comes amid growing public debate over the tax obligations of religious leaders, a sector many Nigerians assume is exempt from statutory deductions.

Speaking on the popular podcast Mic On, Oyedele explained that while religious institutions themselves enjoy tax exemptions under Nigerian law, these exemptions apply strictly to the organizations—not the individuals who work for them. Churches, mosques, and faith-based organizations are classified as non-profit entities, which shields them from corporate taxes as long as they refrain from commercial business operations. However, employees of these institutions, whether spiritual or administrative, are legally considered workers earning income, and therefore, must comply with personal income tax regulations.

He emphasized that the misunderstanding arises from conflating the tax-exempt status of religious bodies with the tax liability of their workforce. “What the law says,” Oyedele noted, “is that the church and the mosque will not pay tax unless they start doing business as an institution or organization. But anybody they pay—whether it’s the pastor, whether it’s the choir—is liable to tax because these people are just working. It only happens that they are working in God’s vineyard.”

‘Religious Workers Are Not Different From Anyone Else’

Oyedele reinforced the principle that personal income tax applies uniformly across professions. He argued that workers in religious environments are not fundamentally different from farmers, traders, teachers, or artisans who also contribute to the well-being of society. Many sectors, he noted, could be described as doing “God’s work,” yet this does not exempt them from paying taxes.

“The person who is selling food—do you think they are not doing the work of God?” he asked rhetorically. “The farmer who goes to the farm so that we can eat is doing God’s work. Everybody who earns income is required to declare it honestly and pay tax accordingly.”

The Nigerian constitution, he added, mandates all citizens to fulfil their civic responsibility by remitting applicable taxes based on their income levels. Religious affiliation, he clarified, does not alter this statutory obligation.

How the New Tax Thresholds Will Apply

As part of the broader fiscal reforms set to take effect in January 2026, Oyedele highlighted changes to the tax brackets designed to improve fairness and reduce the burden on low-income earners:

• Low-income earners will be exempt from paying tax entirely starting next year.

• Middle-income earners will enjoy reduced tax rates.

• High-income earners will pay more under a progressive tax structure.

Religious leaders fall under the same system. If their earnings exceed the tax threshold, they are required to pay—regardless of their role or religious beliefs.

“We cannot create a society where certain religions or positions are considered superior to others,” Oyedele said. “Once your income passes the exemption threshold, you must pay tax. It is that simple.”

A Broader Push for Compliance

These clarifications are part of the Federal Government’s ongoing efforts to broaden Nigeria’s tax base, improve compliance, and ensure a more equitable fiscal system. Oyedele’s committee has been actively conducting public engagements to demystify tax laws, especially around the digital and remote-work economy.

In a recent webinar hosted by the National Orientation Agency, themed Simplifying Nigeria’s Tax System, Oyedele revealed that Nigeria has signed data-sharing agreements with over 100 countries. This would help identify Nigerians earning income from foreign companies or digital platforms, especially remote workers who often fall outside traditional tax tracking systems.

Regardless of where the income originates—whether local or international—every remote worker based in Nigeria is required to declare and remit taxes. “The obligation is on the individual,” he stressed, noting that increased global cooperation will make tax evasion more difficult.

Oyedele’s message underscores the government’s commitment to enforcing tax fairness across all sectors, including religious institutions. While Nigeria continues to respect the non-profit status of religious organizations, individuals who earn a salary—pastors, imams, choir members, or administrative staff—remain responsible for fulfilling their personal tax obligations.

Nigeria’s ongoing fiscal reforms have taken a significant step toward modernising the nation’s tax architecture, as virtual currencies — including cryptocurrencies and other forms of digital assets — are now officially taxable under the country’s updated tax framework. This clarification was made by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, during a virtual public lecture organised by the Capital Market Academics of Nigeria (CMAN) on Wednesday.

Oyedele explained that the inclusion of virtual currencies within the nation’s tax net aligns with global trends, where digital assets increasingly represent substantial sources of income, investment, and cross-border financial transactions. He defined virtual currency as a form of digital value created and maintained electronically, typically issued by private organisations or online networks. While many digital currencies operate within closed platforms, convertible virtual currencies—such as cryptocurrencies—allow users to trade them for actual money, making them relevant to national tax systems.

Capital Market Gains Remain Exempt from Taxation

Despite the expanded tax coverage that now includes virtual currencies, Oyedele emphasised that gains from Nigeria’s capital market remain exempt from taxation for the vast majority of investors. He described this as a deliberate incentive aimed at attracting more young Nigerians into structured, regulated investment channels.

According to him, a widespread misconception has discouraged young people from participating in stocks and other regulated investment instruments. “Virtual currency under the new law is liable to tax. Capital market gains for virtually everybody is exempted, so why are we not telling our young people that the returns on our capital market are better and tax-exempt?” he asked.

He stressed that misinformation has led to poor financial decisions. Many young Nigerians, he noted, wrongly believe that a flat 30% tax applies to capital market gains. This misconception undermines investor confidence and contributes to avoidable short-term losses driven by fear, rumours, and speculative pressure.

“The market is often right in the long run,” Oyedele added, “but some investors may lose their livelihood in the short run when they react to misinformation.”

New Law Introduces a Structured Tax Refund System

A major highlight of Nigeria’s reformed tax law is the establishment of a formal mechanism for tax refunds — a practice largely absent in previous frameworks. Oyedele revealed that the new law mandates the government to set aside a portion of all tax revenue specifically for refund obligations. This change, he said, will strengthen public trust in the tax administration and ensure fairness, particularly for businesses that frequently encounter withholding tax challenges or excess deductions.

Committee Intensifies Public Sensitisation

To address widespread ignorance of tax policies and citizens’ rights, the Tax Reforms Committee is partnering with the National Orientation Agency (NOA) to translate the new tax law into several local languages. This initiative aims to ensure that Nigerians — especially those at grassroots levels — are well informed about their rights, obligations, and available benefits under the reformed tax system.

Oyedele said the awareness drive is critical, as tax compliance and public confidence can only improve when citizens clearly understand the rules and how they apply to their daily lives.

Nigeria Joins Global Effort to Tax Remote Work

In addition to virtual currency taxation, Oyedele noted that Nigeria has entered into data-sharing agreements with more than 100 countries. This collaboration allows Nigerian authorities to access income data for citizens engaged in remote work with foreign employers. The goal, he said, is to ensure transparency and improve compliance among digital economy workers, freelancers, and online service providers.

He reiterated that all remote workers residing in Nigeria are required to declare their income, regardless of where their employer or client is based.

The Economic and Financial Crimes Commission (EFCC) has formally handed over ₦104.1 million in recovered tax revenue to the Niger State Government, marking a significant enforcement action against corporate tax evasion and a boost to the state’s internally generated revenue efforts.

The recovered funds represent unremitted taxes owed by Kiara Rice Mills Limited, a multibillion-naira rice processing company operating in Kpatsuwa Village of Mokwa Local Government Area. The handover took place on Wednesday at the EFCC’s Ilorin Zonal Directorate, where officials confirmed that the recovered amount—₦104,091,162.46—covers tax liabilities accumulated by the company between 2021 and 2024.

How the Recovery Began

According to the Commission, actionable intelligence was first received in February 2025, indicating that Kiara Rice Mills, despite operating profitably, had allegedly failed to remit its full tax obligations to the Niger State Internal Revenue Service (NGSIRS). This prompted an investigation by the EFCC’s Foreign Exchange Malpractice Section, which eventually uncovered concrete evidence of the company’s failure to fulfil its statutory tax duties.

The EFCC stated that the investigation was meticulous, combining financial analysis, field inquiries, and inter-agency collaboration. These steps ultimately led to the full recovery of the outstanding tax liabilities and the eventual handover to the state.

EFCC’s Statement on the Handover

During the handover ceremony, EFCC Executive Chairman Mr. Ola Olukoyede—represented by the Ilorin Zonal Director, Commander of the EFCC, CE Ansalem Ozioko, Ph.D.—reaffirmed the Commission’s commitment to maintaining financial integrity and holding organisations accountable.

He emphasised that the EFCC’s work does not stop at arrests and prosecution but extends to recovery and restitution:

“The function of the EFCC is to prevent, investigate, and prosecute economic and financial crimes, recover what was stolen, and return it to the rightful owners. That is exactly what we are doing here today.”

Olukoyede urged the Niger State Government and its agencies to strengthen their collaboration with the Commission, encouraging them to act as “ambassadors of the EFCC” by reporting financial misconduct and promoting transparency in public administration.

Niger State Reacts

Receiving the recovered funds on behalf of the state, Alhaji Aminu Bawa, Group Head of Tax Operations at the Niger State Internal Revenue Service, expressed gratitude to the EFCC. He praised the agency’s diligence and stressed that the recovery would directly support development initiatives within the state.

According to Bawa:

“On behalf of the Niger State Government, I wish to express our sincere appreciation to the Commission for this commendable recovery effort. This development will have a direct and positive impact on the lives of our people.”

He confirmed that the funds would be credited to the state government’s account and channelled toward public development projects, especially those aimed at improving infrastructure and social services.

EFCC’s Wider Anti-Corruption Performance

The handover is part of the EFCC’s larger nationwide anti-corruption drive, which has recorded extensive recoveries and enforcement activities over the past two years.

According to data provided by the Commission:

• Over 19,000 petitions were received between October 2023 and September 2025.

• Approximately 29,240 investigations were conducted within the same period.

• These efforts resulted in 10,525 court cases and 7,503 convictions, a record-breaking achievement for the agency.

Additionally, the EFCC recovered 1,502 non-monetary assets, including 753 duplexes in Lokogoma, Abuja, and the former Nok University in Kaduna State, now repurposed as the Federal University of Applied Sciences, Kachia.

In financial terms, recoveries include:

• ₦566.3 billion

• $411.6 million

• £71,306

• €182,877

• And other foreign currencies

A portion of these recovered funds has already been channelled into national programmes such as the Student Loan Scheme and the Consumer Credit Scheme, with ₦100 billion committed so far. Several agencies—including the NDDC, AMCON, FIRS, and NHIA—have also benefited from funds recovered by the EFCC.

Broader Anti-Fraud Efforts

The EFCC also highlighted successful crackdowns on fraud networks, including the arrest of 792 suspects across Lagos in December 2024 for cryptocurrency and investment-related fraud. Among them were 192 foreigners, all of whom were prosecuted and subsequently deported. The agency has also reopened several longstanding corruption cases and launched a Task Force on Naira Abuse and Dollarisation to curb illicit currency activities nationwide.

Nigeria’s fiscal landscape is set for a major transformation as the Presidential Fiscal Policy and Tax Reforms Committee, led by Mr. Taiwo Oyedele, unveils a sweeping set of 50 tax exemptions and reliefs designed to ease the financial burden on low-income earners, average taxpayers, and small and medium-sized enterprises (SMEs). The new framework will take effect from January 1, 2026, marking a historic shift toward a more inclusive and equitable tax system.

Announcing the initiative on his official X (formerly Twitter) account, Oyedele described the policy as “one of the most people-focused tax reforms in Nigeria’s recent history.” He emphasized that the reforms are centered on fairness, simplicity, and inclusiveness, targeting those who contribute most to economic productivity yet often bear a disproportionate share of tax hardship.

According to Oyedele, the committee’s proposals were crafted to reduce tax pressure on the poor, incentivize compliance among small businesses, and create a friendlier environment for entrepreneurship and job creation. The ultimate goal, he explained, is to modernize Nigeria’s fiscal framework while ensuring that taxation supports — rather than hinders — growth.

“From January 1, 2026, Nigeria’s new tax laws will provide substantial reliefs and exemptions for low-income earners, average taxpayers, and small businesses,” Oyedele stated.

Key Highlights of the 50 Tax Reliefs and Exemptions

1. Personal Income Tax (PAYE)

• Individuals earning at or below the national minimum wage will be fully exempt from personal income tax.

• Workers with annual gross income of up to ₦1.2 million (approximately ₦800,000 taxable income) will also be tax-free.

• Graduated PAYE reductions will apply to those earning up to ₦20 million per year.

• Charitable gifts and donations will now qualify for tax exemptions.

2. Deductions and Reliefs for Individuals

• Pension contributions, National Housing Fund, and Health Insurance payments remain fully deductible.

• Interest on home loans, life insurance premiums, and rent relief (up to ₦500,000 or 20% of annual rent) are allowed as additional deductions.

3. Pensions and Gratuities

• All retirement benefits, pensions, and gratuities under the Pension Reform Act remain tax-exempt.

• Severance or redundancy payments up to ₦50 million are exempt from taxation.

4. Capital Gains Tax

• Owner-occupied homes, personal effects worth up to ₦5 million, and up to two private vehicle sales per year are exempt from capital gains tax.

• Share sale gains below ₦150 million annually or ₦10 million per transaction will not be taxed.

• Investors who reinvest proceeds from asset sales into productive ventures will also qualify for relief.

5. Companies Income Tax (CIT)

• Small businesses earning less than ₦100 million annually and holding assets under ₦250 million will pay 0% CIT.

• Startups recognized under the government’s innovation policy will enjoy multi-year tax exemptions.

• Firms providing salary increases or transport subsidies to low-income staff will receive a 50% compensation relief.

• Agriculture-based enterprises will benefit from a five-year tax holiday covering crop production, dairy, and livestock operations.

6. Development Levy and Withholding Tax

• SMEs are exempt from the 4% development levy.

• Withholding tax exemptions apply to small companies, manufacturers, and farmers for income earned and payments made to suppliers.

7. Value Added Tax (VAT)

• Basic food items, educational materials, pharmaceuticals, healthcare services, and rent are now VAT-exempt.

• Businesses with annual turnover below ₦100 million will no longer charge VAT.

• Additional exemptions cover agricultural inputs, baby products, sanitary towels, electric vehicles, and humanitarian supplies.

8. Stamp Duties

• Electronic transfers under ₦10,000, salary payments, intra-bank transfers, and transactions involving shares or government securities will be free from stamp duties.

Promoting Transparency and Public Awareness

Oyedele also announced the launch of an “Influencing for Good” initiative — a public education campaign to promote accurate information about Nigeria’s evolving tax landscape. Citizens are encouraged to nominate social media creators who responsibly educate the public on tax matters for special recognition and training.

“Misinformation spreads quickly, often for profit, but accurate information builds trust,” Oyedele said. “Our goal is to help Nigerians understand their rights and responsibilities under the new tax system.”

Broader Policy Context

The tax relief package comes after President Bola Tinubu signed four landmark fiscal reform bills earlier in 2025 — the Nigeria Tax Bill, Tax Administration Bill, Revenue Service (Establishment) Bill, and the Joint Revenue Board Bill. These laws collectively aim to harmonize Nigeria’s fragmented tax structure, reduce overlapping levies, and enhance digital tax collection efficiency.

Analysts say the exemptions mark a significant step toward a progressive tax regime, where the wealthy and corporate giants bear a fairer share of the tax burden, while low-income Nigerians and productive sectors receive the support they need to thrive.

With implementation set for January 2026, the reforms are expected to strengthen Nigeria’s revenue base, enhance transparency, and promote a fairer, growth-driven fiscal system that reflects the administration’s commitment to inclusive economic recovery.

The Federal Government of Nigeria has unveiled the Tax Reform Challenge, a nationwide competition designed to engage students and young graduates in shaping the national conversation on Nigeria’s new tax laws. The initiative aims to stimulate creativity, deepen tax awareness, and promote youth participation in fiscal reforms that will define the country’s economic future.

Announcing the launch on Friday, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, stated that the challenge aligns with the government’s broader vision of fostering inclusivity and innovation in policy development. Through a post on his official X handle, Oyedele explained that the competition will serve as a platform for students to express their perspectives on the newly enacted tax reforms while encouraging informed public discourse.

According to him, the initiative is part of the committee’s strategy to bridge the gap between policymakers and the younger generation, ensuring that the next generation of Nigerian leaders understands and contributes to the evolution of the country’s tax framework.

Who Can Participate

The Tax Reform Challenge is open to undergraduate students in Nigerian universities, polytechnics, and colleges of education, as well as recent graduates currently serving under the National Youth Service Corps (NYSC) or awaiting mobilisation.

Participants are required to thoroughly study the newly signed tax laws and submit original, creative works — such as articles, podcasts, videos, radio programs, or social media campaigns — that highlight, analyse, or critique any aspect of Nigeria’s tax reform between July 1 and December 31, 2025.

Oyedele emphasised that the submissions should be fact-based, educative, and engaging, while welcoming entries that critically assess the government’s policies. The committee aims to reward originality, clarity, and the ability to communicate complex fiscal ideas in ways that inform and empower the public.

Entries will be evaluated based on creativity, factual accuracy, and public engagement, ensuring that both technical insight and accessibility are equally valued.

Prizes and Opportunities

The competition features a N10 million prize pool, alongside other prestigious rewards and career opportunities for outstanding participants.

• 1st Prize: N5 million

• 2nd Prize: N3 million

• 3rd Prize: N2 million

Additionally, the top ten finalists from each of Nigeria’s six geopolitical zones will receive consolation prizes, including digital gadgets, internship placements, job opportunities, and appointments as Tax Reform Youth Ambassadors.

The Youth Ambassadors will be tasked with promoting fiscal literacy, hosting tax education campaigns, and leading discussions that help citizens understand the implications and benefits of tax reforms. Oyedele noted that the programme seeks to “inspire a generation of tax-literate Nigerians who see taxation not as a burden but as a tool for nation-building.”

Interested participants are encouraged to visit fiscalreforms.ng for detailed guidelines, eligibility criteria, and submission procedures.

Background: Understanding the New Tax Reforms

The Tax Reform Challenge comes on the heels of the enactment of four major fiscal reform laws — the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service (Establishment) Act 2025, and the Joint Revenue Board (Establishment) Act 2025. Signed into law by President Bola Tinubu on June 26, 2025, the reforms represent one of the most comprehensive overhauls of Nigeria’s tax system in decades.

Two of the legislations — the Revenue Service Act and the Joint Revenue Board Act — took immediate effect, while the Nigeria Tax Act and Tax Administration Act will become operational on January 1, 2026.

The reforms are designed to simplify Nigeria’s complex tax regime, reduce duplication across federal and state levels, and enhance compliance. Key highlights include:

• Exemptions for small businesses with annual turnover below N100 million and assets under N250 million.

• Income tax relief for low-income earners making below N800,000 annually.

• Tougher compliance standards, requiring detailed record-keeping, e-invoicing for VAT-registered businesses, and enhanced digital reporting.

• Harmonisation of tax laws to improve coordination among federal, state, and local governments.

Experts believe these reforms could improve Nigeria’s ease of doing business, widen the tax net, and enhance public trust in fiscal governance.

By engaging students through the Tax Reform Challenge, the Federal Government hopes to build a generation of informed citizens who not only understand taxation but also view it as a driver of shared prosperity and national development.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has clarified that Nigeria’s new tax framework does not introduce fresh taxes on cryptocurrency or digital income but instead provides clarity and consistency on how such earnings should be treated under existing laws.

Speaking at a weekend media session with journalists, analysts, and digital influencers, Oyedele addressed the widespread misconception that the 2025 tax reforms were designed to tax crypto traders or online content creators for the first time.

According to him, income from virtual assets, social media content, and other digital activities has always been taxable under the country’s Personal Income Tax Act. The updated legislation only clarifies how such income should be declared and taxed — ensuring fairness, transparency, and compliance.

“There is no new tax on individuals who were not previously taxable,” Oyedele explained.
“What we have done is make the rules clearer — especially for digital income, influencers, and those earning from virtual assets. If you make losses, those will also be deductible. But income remains taxable, as it has always been.”

He also stressed that income received as a gift or donation remains non-taxable, as long as it is not tied to a business or service transaction.

Reducing Taxes, Not Adding More

Oyedele emphasized that one of the central goals of the fiscal reforms is to simplify Nigeria’s tax structure, which currently contains over 60 different taxes and levies.

“We are bringing that number down to fewer than ten,” he said. “This is not about raising taxes but making them simpler, fairer, and easier to comply with.”

He revealed that several unpopular levies introduced by previous administrations have already been reversed or suspended, including:

• The 5% tax on airtime and data

• The cybersecurity levy on bank transfers

• The carbon tax on single-use plastics

• The excise duty on imported vehicles

Oyedele described the new framework as “people-centric and growth-focused”, aimed at boosting compliance and promoting a friendlier business environment.

“Our reforms are designed to make life easier for citizens and businesses,” he added. “We want to promote efficiency, fairness, and trust in the tax system.”

Higher-Income Nigerians to Contribute More

While assuring that low- and middle-income Nigerians will face no new burden, Oyedele disclosed that the top 3% of income earners will now contribute up to 25% of their income in taxes.

Meanwhile, workers earning the national minimum wage of ₦70,000 or below will remain completely exempt from personal income tax under the new laws.

“Our objectives have been clear from the start — reduce the tax burden on ordinary Nigerians, harmonise multiple taxes, and build a fair, globally competitive system,” Oyedele said.

How Crypto and Digital Income Will Be Taxed

To clarify how crypto-related income fits into Nigeria’s tax system, economist Kalu Aja provided simple examples for better understanding:

• If a person receives $100 (₦100,000) as a gift from abroad, it is not taxable, since it’s below the ₦800,000 annual threshold for personal income tax.

• If that money is used to buy Bitcoin and later sold for ₦200,000, the ₦100,000 profit also falls below the taxable threshold.

• However, if profits exceed ₦800,000 — for example, earning ₦1.9 million from crypto trading — income tax applies.

• For registered companies, crypto gains may fall under corporate tax, unless the business earns less than ₦50 million annually, in which case it remains exempt.

This structure ensures that small-scale traders, freelancers, and startups are not overburdened, while higher earners contribute fairly to national development.

Building a Modern, Transparent Tax System

Oyedele reiterated that the reforms are part of a comprehensive fiscal overhaul aimed at boosting government revenue, encouraging business formalization, and simplifying administration.

The reforms — officially gazetted and signed into law on June 26, 2025 — introduce four major legislations:

1. Nigeria Tax Act (NTA) 2025

2. Nigeria Tax Administration Act (NTAA) 2025

3. Nigeria Revenue Service Establishment Act (NRSEA) 2025

4. Joint Revenue Board Establishment Act (JRBEA) 2025

Together, these laws establish a modern tax ecosystem built on fairness, simplicity, and digital compliance.

“This is not about punishment or control,” Oyedele concluded.
“It’s about giving Nigeria a tax system that works — one that supports innovation, rewards honesty, and drives growth for everyone.”