The special adviser to the president on economic matters, Tope Fasua, says Nigeria’s new tax regime is designed to significantly reduce the tax burden on the majority of Nigerians, particularly the youth and small business owners.
The new tax regime being introduced by President Bola Tinubu’s administration will take effect on January 1, 2026.
Mr Fasua spoke during a panel session on ‘Nigeria’s New Tax System: What Every Youth Should Know’ at the Youth National Discourse Abuja 2025, organised by the Eleniyancares Leadership Foundation in Abuja.
He said that the primary aim of the new system was to ensure that those who should not be paying taxes in the country were exempted.
“For most youths, the president does not want you to pay any tax. That is the aim of the new tax regime for our youths,’’ Mr Fasua said.
He highlighted specific tax reliefs under the new system for low-income earners and small businesses.
“The law says that anybody earning N1 million and below per annum should go tax-free. That is N800,000, being the allowance you’re given for zero taxes, plus a N200,000 allowance for your rent.
“So, that is one million and below. So, that means you’re earning about N83,000 or so per month for a whole year, and you’re not supposed to pay taxes. It’s only when you have earned more than one million that you now begin to pay a minimum amount of taxation,” he said.
He added that under the new law, entrepreneurial businesses and small business owners with an annual turnover of N50 million or below would also be exempted from all taxes, including the value-added tax.
Mr Fasua said that the government was only interested in collecting tax on profits, not turnover, and businesses falling within that turnover bracket would not pay any tax whatsoever.
He explained that the government’s tax focus was being redirected toward high earners, particularly those in the informal sector with high turnover who have historically evaded adequate taxation.
“What we’ve tried to do on the upper end for people earning N50 million and above is to take their taxes to about 24 per cent from a previous rate of around 18 per cent,” he said.
Mr Fausa said that beyond tax reforms, the broader goal of the new regime was to create a new Nigerian economy that leverages innovation, skips outdated developmental stages, and focuses on adding value.
He appealed to the youths to move away from business models focused solely on buying and selling imported goods, encouraging them to embrace innovative entrepreneurship by adding value to products and services.
Regarding the various economic reforms under Mr Tinubu, the special adviser stated that the positive economic indicators served as evidence that the president’s recent, challenging reforms were yielding results.
Mr Fausa noted that the national growth rate was increasing by 4.23 percent, with a projection to reach five percent by the end of the year.
“Our inflation rate is dropping month by month. In the past six months, it’s been dropping. Now we’re at 18.02 per cent. We’re likely to get to 13 per cent by the end of this year. By 2026, we’ll get to what they call single-digit inflation,” he said.
(NAN)
