The analysis in the referenced widely circulated write-up is faulty, even as the Writer alluded to some unnamed “FIRS officers” that he challenged to buttress his position.
It is important to note that the tax exemption threshold applies to taxable income, which is calculated after all approved reliefs and deductions have been made from the gross salary.
Allowable deductions include contributions to pensions, the National Housing Fund (NHF), the National Health Insurance Scheme (NHIS), and a new 20% relief on annual rent (capped at N500,000).
The specific thresholds for which there would be no tax payment are:
- Annual Salary (Taxable Income): N800,000 or less. Monthly Salary (Taxable Income): Approximately N66,667 or less.
- The new law also specifically exempts individuals earning the national minimum wage or less from paying income tax, regardless of future adjustments to the minimum wage.
- Annual gross salary of N1,200,000 (monthly gross salary of N100,000). In other words, while the base exemption is N800,000 of annual “taxable income”, an individual can earn a gross annual income of up to N1,200,000 (N100,000 monthly) and still pay zero tax by applying allowable deductions such as pension, health insurance (NHIS), and rent relief.
The relevant sections and schedules of the new tax laws (e.g section 58 and fourth schedule of the Nigeria Tax Act 2025) are in the public domain for further checks.
So, it is quite unlikely in most cases that an individual with a monthly gross salary of N75,000 will come down to just N69,000 taxable income after applying all necessary deductions and reliefs provided for in the new laws.
Assuming that is even the case, a monthly N66,667 taxable income (N800,000 annual) would attract zero tax in the new tax regime, so someone who earns N69,000 monthly taxable income will only be paying tax on the balance of N2,333, not the entire N69,000 as the Writer attempts to indicate!
In challenging the “FIRS Officers” to the fact that his cousin would pay tax in the new tax regime as a basis for other far-reaching points or “recommendations” in his write-up, the Writer gave the erroneous impression that:
- “Nigeria’s poor are about to start paying taxes” and “Bola’s tax takes money from poor people like Joseph”. These quotes from the Writer suggest that those categories of citizens were not hitherto supposed to pay tax going strictly by the old law. That is a misrepresentation! Infact, such individuals were not fully exempted in the old system and would actually have been required to pay more in comparison, save for weak enforcement.
- The tax to be paid by his cousin in the new tax regime would be based on the entire taxable income of N69,000 after the pension deduction, and not what is over and above the minimum wage! While this was not explicitly stated, it can be easily implied from the write-up, given the context and the subsequent points he made, tending towards incitement and defiance.
Finally, while citizens have a legitimate right to express concern about the social contract and how our collective contributions are utilized supposedly on our behalf, this should not be premised on deliberate factual misrepresentation with subtle (or not so subtle) incitement.
- Hafiz Bakare is a Consultant and former Bank Chief Executive.
