The Federal Government has moved to calm public anxiety over forthcoming tax changes slated to begin on January 1, 2026, insisting that there will be no automatic deductions from personal bank accounts or intrusive tracking of private transactions.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, dismissed widespread rumours that authorities would begin withdrawing money directly from citizens’ bank accounts once the reforms take effect.
Appearing on a Channels Television programme on Tuesday, December 30, 2025, Oyedele said such claims were “pure speculation,” stressing that taxpayers will remain responsible for declaring their income themselves.
He said, “People have somehow come to believe that from next year, the government will just start debiting their accounts. I honestly don’t know where that fear came from. “No one is going to debit your account because of transfers you make. Whether you move one thousand naira or one billion, it is you who will, at the end of the year, tell government your income and the tax due.”
According to him, the new system is designed around voluntary declaration, rather than automatic monitoring of bank transactions, adding that individuals and business owners will declare what constitutes their income, calculate the relevant taxes, and apply exemptions where appropriate.
“You know what your real income is. You declare it and calculate the tax. If what you earn is exempt, you simply say so. We are making the process simpler, not more difficult,” he explained.
Oyedele added that a key objective of the reform is to correct what he called a “regressive structure” that often leaves lower-income Nigerians and small entrepreneurs bearing a heavier burden relative to high earners.
“If you are a small trader, artisan, sole proprietor, or just trying to survive, the system will no longer punish you,” he said. “The reforms are progressive; those who earn more will pay more”, he said.
His clarification followed President Bola Ahmed Tinubu’s announcement earlier on Tuesday that implementation of the new tax laws will proceed as scheduled in spite of criticisms from opposition groups and labour unions.
Tinubu said the changes are not designed to inflict hardship or introduce fresh taxes, but to modernise Nigeria’s fiscal framework, improve coordination among revenue agencies and protect vulnerable citizens.
He described the initiatives as “a once-in-a-generation opportunity” to build a fairer and stronger tax regime and urged Nigerians to support the reform process.
The comprehensive tax package, signed into law in June 2025, seeks to simplify tax administration, expand the tax net and shield low-income earners and small businesses.
Highlights of the reforms include:
- full personal income tax exemption for individuals earning ₦800,000 or less annually
- progressive tax rates capped at 25 percent for higher earners
- exemption from company income tax, VAT and development levy for small businesses with turnover below ₦100 million
- a reduction of company income tax for larger firms from 30 percent to 25 percent
- VAT retained at 7.5 percent, with reliefs for essential goods
The government also emphasised that exemptions will cover minimum-wage earners, pensioners, gifts, remittances, and Nigerians in the diaspora.
While some suits challenging the reforms remain in court, authorities maintain that the measures will lighten tax pressure on ordinary Nigerians, stimulate small businesses, and create a more transparent and equitable tax system aimed at revitalising the economy.
