PAYE Cuts Increased Workers’ Take-Home Pay In January — Oyedele

 

Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said a reduction in Pay As You Earn (PAYE) deductions under the newly implemented tax laws has resulted in an increased take-home pay for Nigerian workers.

Oyedele made reference to feedback from employees who have received their January 2026 salaries in a Monday post on X.

He noted that early indications suggested that the new tax framework is already easing the tax burden on workers, particularly salary earners whose taxes are deducted at source.

According to him, the drop in PAYE deductions reflects the early impact of recently enacted tax reforms designed to reduce the tax burden on workers.

“We are pleased to note the feedback from workers who have received their salaries for January 2026 and confirmed a reduction in their PAYE tax resulting in higher take-home pay under the new tax laws,” Oyedele stated.

He added that the reforms are particularly beneficial for employees whose income taxes are deducted directly by their employers.

Despite reports of reduced PAYE deductions by workers who have received their January salaries, Oyedele said further engagement is needed to ensure correct implementation.

He disclosed that the Committee is partnering with the Joint Revenue Board to host a dedicated engagement session for key stakeholders involved in payroll and tax administration.

The online session, scheduled for this week, will focus on applying the new Personal Income Tax provisions correctly.

It is targeted at HR Directors, Payroll Managers, Chief Financial Officers, Tax Managers, and other senior executives.

The session is expected to address implementation gaps and clarify compliance requirements for employers.

Oyedele said the engagement would help ensure employees fully benefit from the reforms while employers remain compliant with the updated legal framework.

The development followed the federal government’s commencement of tax reforms implementation aimed at improving disposable income, supporting economic growth, and simplifying tax administration across the country.

The federal government recently began implementing a new tax reform framework anchored on the Nigerian Tax Act (NTA) and the Nigerian Tax Administration Act (NTAA).

The reforms were introduced to simplify Nigeria’s tax system, reduce multiple taxation, and promote fairness across income groups.

The implementation of the new tax laws began in January despite controversies surrounding alleged alterations to gazetted copies of the legislation.

Ahead of the January implementation of the two laws, the government had last year started implementing two other laws: the Nigerian Revenue Service Establishment Act and the Joint Revenue Service Establishment Act, which commenced on June 26, 2025.

 

READ ALSO: Ex-Minister Alison-Madueke’s Corruption Trial Begins In London

Oyedele previously stated that about 98% of Nigerian workers will either pay no PAYE tax or pay lower taxes under the new framework.

He also said approximately 97% of small businesses will be exempt from corporate income tax, value-added tax, and withholding tax.

According to him, large companies will also benefit from reduced tax liabilities under the new laws.

Oyedele maintained that, contrary to public concerns, the reforms are structured to ensure Nigerians pay less tax overall while improving compliance and efficiency.