Tax Reforms: Nigerian low-income earners to pay zero tax from 2026 –Executive Chair

*Olaniran Olatona, Executive Chairman of the Ekiti State Internal Revenue Service, reaffirms the provisions in the National Tax Reform Acts are critical to sustaining the Nigerian Government’s revenue, improving economic stability, and promoting Ease of Doing Business

Isola Moses | ConsumerConnect

As Nigerians prepare for implementation of the new tax reforms regime effective from January 2026, the Ekiti State Internal Revenue Service (EKIRS) has clarified key provisions in the National Tax Reform Acts.

ConsumerConnect reports Mr. Olaniran Olatona, Executive Chairman, who stated this Wednesday, December 17, 2025, at a media briefing in Ado Ekiti, the state capital, assured the residents, that low-income earners have nothing to fear as implementation of the new Tax Acts commences January 1 next year.

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Olatona explained that individuals earning below N800,000 annually would be exempted from payment of what is known as Personal Income Tax (PIT) under the new laws.

The Executive Chairman of EKIRS also noted that such an exemption covers both salaried workers and self-employed individuals whose combined income from business, rent or other sources does not exceed the threshold.

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Tax Reforms: Nigerian Low-Income Earners To Pay Zero Tax From 2026 –Executive Chair

He reaffirmed that the provisions in the National Tax Reform Acts are critical to sustaining the Federal Government’s revenue, improving economic stability, and promoting Ease of Doing Business (EoDB) in Nigeria.

Taxpayers under Pay As You Earn (PAYE) scheme

Explaining some other concepts under the new tax, Olatona, however, clarified that only taxpayers under the Pay As You Earn (PAYE) scheme would enjoy the “full exemption” in year 2026.

He stated that taxpayers who earn income from trade, business, and other sources are assessed on the preceding year basis.

By implication, taxpayers under Direct Assessment Scheme would still be assessed with the current tax rates under PITA for income earned 2025, which would be payable next year.

Expatiating further, the EKIRS Executive Chairman said all income earned in year 2025 would still be assessed, based on the current law which has no exemption.

Olatona averred that the full tax exemption for low-income earners other than those earning only employment income, would practically commence in 2027 Year of Assessment when tax for income earned in year 2026 would be due and payable.

EKIRS, he stated, would continue to engage informal sector operators.

The Chairman, nonetheless, reassured petty traders and small business owners that most would automatically qualify for zero tax, as the law effectively exempts those earning below N1 million annually, if allowable deductions are considered.

On bank accounts without Tax Identification Numbers

In regard to certain public concerns about bank accounts, Olatona disproved claims that consumers’ bank accounts without Tax Identification Numbers (TIN) would be frozen.

He described such reports making the rounds in the public space as false.

According to him, TIN would only be required for opening new bank accounts by businesses and income earners while existing accounts remain unaffected.

He equally affirmed the current efforts at the Joint Revenue Board (JRB) at harmonising multiple tax identification numbers into a single Tax ID linked to National Identification Numbers (NINs) of Nigerians.

Olatona also explained the measure is aimed at ensuring every taxable person has a single unique Tax ID, which can be used across all states of the Federation.

Restating the overarching objective of the new tax administration in Nigeria, he said tax reforms exercise was not designed to increase the tax burden on citizens.

The Executive Chairman of EKIRS noted the reforms were designed to “widen the tax base” by bringing high-income earners and previously untaxed individuals into the system in the country.

In respect of what to do, if any taxpayers feel unfairly treated, the EKIRS Chief Executive explained that they could seek redress through the Office of the Tax Ombud, an independent office established under the Joint Revenue Board (Establishment) Act.

He noted the office helps to resolve disputes through mediation, make recommendations to the tax authorities, institute proceedings on behalf of taxpayers when necessary, and protect taxpayers’ rights generally.

Olatona stated: “The era we are in now is voluntary compliance.”

The Chairman as well noted the EKIRS suspended enforcement actions since July 2025, in order to simulate the impact of the new laws ahead of its full implementation January 2026.

Much reliance will be placed on data rather than muscle for enforcement going forward, he assured Ekiti people.

Olatona, therefore, urged residents of the South-West state to remain calm, cooperate with authorities, and take advantage of available tax reliefs.

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