Nigerian Workers See Higher Take-Home Pay as PAYE Deductions Reduce Under New Tax Reforms
Many Nigerian employees who received their January 2026 salaries are reporting higher take-home pay following reductions in Pay As You Earn (PAYE) tax deductions under the country’s newly implemented tax reforms.
The update was shared by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, via his WhatsApp platform. He noted that feedback from workers across sectors shows that the reforms are easing the tax burden.
“To make sure that the people responsible for applying these changes in their organisations fully understand what to do, the committee is organising an implementation session in partnership with the Joint Revenue Board,” Oyedele said.
The session targets senior staff responsible for salaries and taxes, including HR directors, payroll managers, chief financial officers, and tax managers, ensuring proper compliance with the new rules.
Addressing public concerns, Oyedele clarified that the reforms do not impose any new taxes or levies on electronic transfers or bank account balances. He added that businesses can now claim back input VAT on bank charges, further benefiting the private sector.
To ensure financial institutions correctly apply the new rules, the committee recently held a separate engagement with banks, fintech companies, and other stakeholders. The session involved officials from the Nigeria Revenue Service, Joint Revenue Board, Central Bank of Nigeria, and financial institutions, covering topics such as:
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Avoiding wrongful taxation of bank services
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Proper use of Tax Identification Numbers (TINs) for business accounts
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Guidance on filing tax returns and claiming lawful deductions
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Removal of Tax Clearance Certificates for foreign exchange transactions
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Strengthened protections for taxpayers via the Office of the Tax Ombud
Oyedele explained that the reforms aim to bring more people and businesses into the formal economy, reduce confusion caused by overlapping tax rules, improve access to financial services, and build trust in the financial system.
“The overall goal is to make the financial system work better for everyone while ensuring compliance is simpler and more transparent,” he said.
