In a landmark policy shift, the Nigerian government has rolled out sweeping tax reformsaimed at easing the burden on millions of informal workers and small-scale entrepreneurs.
Under the new framework, 97% of informal businesses—those earning ₦25 million or less annually—will now be exempt from all taxes, including VAT, company income tax, withholding tax, and PAYE.
Spearheaded by the Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC), the reforms are designed to boost grassroots enterprise and simplify tax compliance across the board. “Chasing micro businesses to pay tax is wickedness,” said committee chair Taiwo Oyedele, emphasizing the need to let small ventures grow without fear of punitive levies.
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Individuals earning less than ₦800,000 yearly will also be spared personal income tax, while SMEs under ₦100 million in revenue will benefit from simplified compliance rules.
The overhaul of the withholding tax system further exempts farmers, small manufacturers, and traders part of a broader goal to eliminate duplicity and encourage voluntary compliance.
While many Nigerians have applauded the move, experts caution that without strong execution, the reform risks becoming another unfulfilled promise. Still, the new policy signals a potential turning point in how Nigeria supports its struggling informal economy.
