We didn’t work with version of tax bill passed by Reps – Oyedele

By Nnamdi Ojiego

As Nigeria inches toward the January 1, 2026 take-off date for its new tax regime, controversy has trailed the laws following claims of discrepancies between what the National Assembly passed and what was eventually gazetted. The allegations have fueled public anxiety, triggered calls for suspension, and deepened uncertainty among businesses already planning for the new fiscal year. In this monitored interview, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, dismisses suggestions of delay, cautions against what he describes as deliberate misinformation being used to stoke fear and panic, and explains the role his committee played in the lawmaking process while urging Nigerians to focus on strengthening legislative safeguards rather than derailing reforms aimed at easing the tax burden on ordinary citizens. Excerpts:

 Before we get into the controversies, what specific role did you play in drafting and processing the tax laws, from conception to assent, before the current issues arose?

 Let me start by saying that when it comes to matters of legislation, particularly tax matters, trust is very important, because taxation in particular is at the heart of the social contract between the people and the government. So, to answer your question directly, my role is the privilege to lead a team of very patriotic Nigerians from all walks of life. I’ve said this a number of times.

At a point we were more than a hundred in trying to look at our tax system to see what’s wrong with it, and a lot of things were wrong, and then to see how we could address those issues with one objective, to make in Nigeria better for everyone. So while I’ll be the one speaking for the committee, this is a teamwork that we have been doing for the past two and a half years, and I’m really proud of the team and their commitment.

Rigorous process

Now what role have we played? So, we were the team that drafted the bills, and while we were drafting the bills, we created this very rigorous process with the understanding that we’ve seen instances in Nigeria where there are different versions of a bill. I remember when they were doing the Petroleum Industry Bill, before it was enacted, there was a lawmaker who said “we’re not even sure which version we’re discussing”.

We had this very rigorous process to guarantee the integrity of that bill. Of course we went through the internal processes, Mr. President presented it to the National Assembly, and from that point forward, our role was really more about just trying to explain the thinking behind those different provisions in the law which many people followed. Now once that was done, bear in mind as well that the legislative process is quite rigorous and elaborate. So, there was the House Committee on Finance that did their work. There was also the Senate Committee on Finance that did their work, and, where necessary, they asked us for an explanation of what they were doing, and then they passed their own versions. Now, because those two versions were not the same, they had to harmonize. And once they harmonized and sent it to Mr. President, my role in particular was about looking at what they’ve asked Mr. President to sign and identify whether there are major or substantial changes to the policy issues.

You want to do tax harmonization, you want to reduce the taxes on businesses, you want to eliminate tax on low-income, and those policy issues were the areas of my focus, such that you want to get to a point where you’re saying to yourself, ‘Has anything in terms of the policy direction been substantially altered as to warrant the President withholding assent?’ Now after that was done, and the law was being gazetted, and I use the word advisedly, being gazetted, we were still very interested in ensuring that the editing issues, referencing, numbering, and definitional problems were properly done. Many people who are watching us will be aware that there was a first draft, let me call it first draft of the gazette, that actually went out, you know, somebody released it when they were not authorized, where we saw some mistakes, and we escalated those mistakes, and many of those corrections were indeed made before we now have what is the final gazette of the tax law. So, essentially, in a nutshell, that is the role that I have played along with my committee members. 

Turning to the disputed provisions, do Sections 25 and 26 of the Nigerian Revenue Service Act, as contained in the gazetted law, reflect exactly what the National Assembly passed?

 Let me help to make some very important clarifications. So, generally, before you can say that there’s a difference between what was gazetted and what was passed, we have what is gazetted, but we don’t have what was passed. So, we don’t have the copy of the official harmonized bills certified by the clerk, which the National Assembly sent to the President, to compare.

That’s a fundamental issue that people need to be aware of. So, only the lawmakers can say authoritatively “this is what we sent”. And that shouldn’t be the House of Reps version, and it shouldn’t be the Senate version. It should be the harmonized version certified by the clerk. So even me, I can’t say that I have it because I don’t. I only have what was presented to Mr. President to sign.

Fake information 

The second important point is that what has been circulating, and also widely reported by a lot of media organizations, is actually fake. So, when I saw those things, you would imagine someone like me would take very keen interest in something like that. So, I reached out to one of the members of the committee that the House of Reps set up, and I said, “Oh, these are some of the allegations”. Meanwhile, let me tell you the reason why I reached out. There’s a reference in one of those materials to Section 41, Subsection 8, that says you have to pay a deposit of 20%. And I know that particular provision is not in the final gazette, but it was in the draft gazette.

So, I reached out and the lawmaker said that they haven’t even met. So, some people decided they should write the report of the committee before the committee has met, and it has circulated everywhere. So, I don’t know whether it’s useful because, to be honest, I don’t want to speculate. What is out there in the media did not come from the committee set up by the House of Reps, and I think we should allow them to do the investigation because, ultimately, I think this is not just about the tax reform laws. It’s about our processes. That’s how we make those processes have those quality assurances, almost like a system that is so tamper-proof, like the way you print your currency or the way you print the ballot papers, that is the way we should take legislation. It matters a lot. I was speaking to a senior advocate who said to me that they went to court and tried to defend their client on something constitutional. So, they were reading the Constitution, and they just said, “but this Section you are reading is not the same as what another person has”.

Even in the Constitution, people print different versions. We saw it with PIA. We saw it with even CARMA. So, I think I’ll leave it at that point. Let’s wait for the findings of the lawmakers. If indeed there were alterations, and if those alterations were substantial, in other words, they’re not editorial, then the next step would be to see how best to address those issues. 

 Given that the bill was signed in the presence of leaders of the National Assembly, what could explain the alleged discrepancies, and where does responsibility lie between the legislative and executive processes?

 I’ll be very honest with you. I do not think that this is a legislative versus executive conversation. I do not think that’s what it is. I think it’s a process and a system issue that has to be addressed. And I don’t think it’s about finger-pointing and looking for who to blame.

What I said is, if you think about the process today, there’s a lot of stages with manual hands-offs that anything can go wrong. So, when you sit to discuss changes to the law as lawmakers, there’s someone who is making notes who needs to go and update. You need to ensure that they’re updating what they have been asked to. You finish that with House of Reps, you do almost the same thing for Senate, and then you harmonize, and then you also need people to update. And then you certify it, you send it, usually through the Ministry of Justice to go to Mr. President for assent. And once it’s been signed, you will notice that the version that the President signs is a different format. You have to then put it in their gazetting format which is also done manually. And then that’s sending from the President after assent for gazetting to the Ministry of Information.

Harmonization law

 So, we have states now, we’ve drafted what we called Joint Revenue Board and drafted a tax harmonization law for the states to enact for themselves and their local governments. Good news. As I speak to you now, Ekiti, Anambra, Zamfara, and Kano states have passed those laws. They’re just waiting to sign. Imagine that we get to a point where all the states have enacted laws to harmonize all multiple taxation, outlaw cash collection, so that you also block the leakages. It’s a win-win for the system, and we should not stall that process for any reason.

There are concerns that the new tax laws increase personal income tax for earners above one million naira. What does this mean in practical terms for Nigeria’s middle class?

 This is also one of the biggest misinformation. If anybody is earning two million Naira or less a month, this new tax law from next year eliminates either their PAYE completely for the lowest income earners, or it reduces what they pay. I’m talking about N20 million a year. We’ll see a drop. So, the people that will pay, you know, people just go to the tax table, and say, “Oh, it’s above 800,000, it’s 15%”. That’s not how the system works.

There’s a distinction between what we call gross income and taxable income. So, the salary that they pay you or they agree to pay you for your employment is called gross salary or gross income. What you have in the tax table is called taxable income. They are not the same. You take the gross income, and you start by making statutory deductions, pension contribution, national housing fund, national health insurance scheme. If you have an insurance policy on your spouse and mortgage interest, when you are done with that, you also take out rent relief allowance up to N500, 000. It is the balance after that process that is called taxable income. The first N800, 000 is also 0%.

Tax calculator

 So, what we are saying is this. A low income earner or an average person, middle class, who is earning 1.5, 1.8 million per month, will see a drop in their PAYE from January next year. We have done a calculator, just because of this misinformation was all over the place, if anybody is interested, they can go to fiscalreforms.ng. They will find a tax calculator there, put in their numbers, it will tell you the tax you pay currently, it will tell you the tax you pay under the new law, and it shows you the comparison whether you are paying more or less. Only the top 2% of earners in Nigeria will pay more, and even that more is marginal for the majority of them.

Before you get to the 25% tax rate in Nigeria, you need to be earning a billion a year. I say this with all seriousness. Even when you earn 200 million a year, you don’t hit the 25%. So, all of these, and the people that even pay a little bit more, are mostly top executives or business owners. Guess what? If they are paying N1 million more in personal tax, their business is getting N10 million more under this new reform, which means even for the high net worth individuals, this is a win for everyone. I do not see any stakeholder that is worse under this reform than the current system.

 Let’s experiment a little scenario for you to help out here. Let’s give an example. Baba Bayo in Surulere is a vulcanizer. He earns, say, N10, 000 and he works six days a week. That comes to about 60,000. So if you do that by a month, we’re talking about 240,000 and around 2.8 million annually. Baba Bayo’s business is not registered, but he has a bank account that he puts his money whenever he’s being paid. 2.8 million comes to his account. How would the new tax laws treat such earnings, and should people in that category fear the tax authorities?

 I’m so glad you asked and the way you analyzed it. So for Baba Bayo, what that will mean is, at the end of the year, remember that amount that Baba Bayo is making is not his money. I don’t know how to put it. That is the revenue from his business. This Baba Bayo will buy different things. He will pay for diesel to make sure that the vulcanizing machine is working. He will pay for the staff trying to carry whatever it is they use to pump it around. He’s probably paying something for even using the space where he’s doing the vulcanizing work. So, there’s a draft regulation we have worked on with the Joint Revenue Board. It’s called presumptive tax. In fact, the threshold we’re working with is anybody earning up to like N40, 000 a day from their business.

So, this is not a salary. That the amount of profit that they make is so small, they shouldn’t have to pay tax at all. So, our plan is for those people to be completely exempted. So, like Baba Bayo, in your instance, will not pay tax from next year if we succeed with all of this reform. Because Baba Bayo’s margin is so small, if he was in the private sector working as an employee, he would be exempted. Why do we punish people who are trying to create jobs? Or they’re just hustling. 

Exemption stickers

 So, under that presumptive tax, in fact, we even identified some businesses where we want government to give them tax exemption stickers. Like somebody is roasting corn by the roadside. They can never make enough money to pay tax, vulcanizers, how can they make enough money to pay tax? Cart pushers, so there are some businesses that if you have customers 24 hours a day, and you are magically not able to sleep and continue to function, you’ll still be a poor person.

We don’t want to leave that judgment as to whether they pay tax or not to the ordinary officer that can decide to make a different decision. We want to protect them. That’s what this reform is all about. So, the fact that money is in the account of Baba Bayo, nobody, nobody, and that’s why the threshold for even reporting under this new reform, threshold for reporting is N25 million a quarter, that means you have to have a 100 million moving around your account before the taxman will even take an interest. Under the current law, there’s no threshold, you can ask anybody to report anything. So again, Baba Bayo is safe and so is everyone else. Even if you have a billion naira in your bank account, and they report you to the taxman, nobody can debit your account. They will ask:

“You have one billion in your account please can you explain if it’s a loan or a gift” and then you will explain yourself. If your explanation doesn’t look tenable and there’s no evidence, the taxman will say “I take it that because there’s one billion in your account, we think it’s your income and your tax is N50 million” and you still have 30 days to object to that assessment to say “I’m not going to pay 50 million”, then that back and forth continues until the taxman says “I refuse to amend” and that’s gives you the opportunity to appeal. You go to Tax Appeal Tribunal, to High Court, Court of Appeal and you go to the Supreme Court.

So, obviously you know that this power is not what the taxman will use when there’s is one billion tax to collect because the process will not justify it and even when there’s a lot of money to collect, there’s due process in the law to be followed and if anybody is trying to harass you, good news. Under the new tax law, there’s a tax law board to protect you.

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