The Federal Government has clarified the upcoming tax reforms scheduled to begin on January 1, 2026, assuring Nigerians that the process will be a simple self-declaration of income, not automatic deductions from personal bank accounts. This explanation comes from Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who emphasized that the reforms are designed for transparency and ease of compliance. Concerns about government agencies monitoring or debiting individual bank accounts have been dismissed as unfounded by Oyedele, who stated there are no plans for such actions. He reiterated that taxpayers will be responsible for declaring their income and the corresponding tax due at the end of each tax year, making the system more user-friendly and less intrusive. This approach aims to build trust and encourage voluntary compliance among citizens. The new framework is specifically designed to protect small business owners and those earning modest incomes, moving away from a regressive tax structure that disproportionately affected vulnerable populations. Under the new system, individuals will declare their income and specify what constitutes their taxable earnings. If an individual qualifies for an exemption, they will be able to declare this status clearly, reinforcing the self-declaration aspect of the reform. The government intends to further simplify this process to ensure it is accessible to everyone. President Bola Tinubu has also reaffirmed the commitment to implementing these new tax laws, describing them as a crucial opportunity to establish a fair and robust fiscal foundation for Nigeria. The primary goal of these reforms is not to increase the tax burden but to fundamentally restructure the fiscal system, promote harmonization, uphold citizens’ dignity, and strengthen the relationship between the government and the people. The President urged stakeholders to support the implementation phase, noting that the reforms are now firmly in the delivery stage and no significant obstacles are anticipated that would disrupt the agenda. The tax reform chairman highlighted that the progressive nature of the new system will benefit those who are self-employed or engaged in small-scale businesses. The reforms are geared towards creating a more equitable tax environment for all Nigerians. The assurance is that the process of paying taxes will become more straightforward and less burdensome for the average citizen. This simplification is a key pillar of the administration’s fiscal policy changes. The emphasis on self-declaration is intended to empower taxpayers and foster a sense of responsibility. The government is committed to ensuring that the implementation is smooth and understandable for everyone involved.
