Nigeria’s Wealthiest to Face 25% Personal Income Tax Rate Starting in 2025, Says Fiscal Policy Committee Chair

Nigeria’s wealthiest citizens will see their Personal Income Tax (PIT) rate rise to 25% beginning next year. Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, made the announcement at the ongoing #NES30 conference in Abuja.

As a panelist in a session titled “Fiscal and Monetary Policy Reforms: Removing Barriers to Private Sector Investment,” Mr. Oyedele elaborated on the tax reforms currently under review by the National Assembly. The proposed laws, once approved, will be implemented in January 2025, aiming to reduce the tax burden on low-income earners while increasing taxes for the wealthiest individuals.

“Many people don’t like to pay taxes, but they often fail to realize that those taxes will eventually benefit them,” Oyedele stated. He highlighted the government’s deliberate efforts to ease the tax load on businesses. “For instance, today, whatever VAT you pay on assets—whether you’re building a factory, purchasing a laptop, or buying vehicles—is borne entirely by the business. This increases your costs, which in turn raises prices. However, with our reforms, you will receive a 100% credit on services and assets.”

Oyedele also emphasized that corporate income tax rates would be reduced from 30% to 25%, marking a significant change. He explained, “These bills are currently with the National Assembly, and we plan to implement them from January 2025.”

On the subject of personal income tax, Oyedele noted that the reforms are structured to benefit different income groups fairly. “Those in this room may not appreciate this because there are wealthy individuals present. If you earn 1.5 million naira a month, your personal income tax bill will decrease. Those at the lower end will be completely exempt. However, for those earning more, the rate will increase incrementally, reaching 25% for the highest earners.”

The announcement underscores the Nigerian government’s strategy to create a more balanced and equitable tax system. By easing the tax burden on low-income earners and businesses, while ensuring that high earners contribute more, the reforms aim to stimulate economic growth and enhance social welfare. With the proposed changes set to take effect in 2025, all eyes are on the National Assembly as they review the bills and work towards passing them.