PAYE cut puts more money in workers’ pockets — Oyedele confirms early gains of new tax laws

Nigerian workers are already feeling the impact of the federal government’s new tax reforms, as reduced Pay As You Earn (PAYE) deductions have translated into higher take-home pay, according to Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee.

Oyedele revealed this on Monday via a post on X, saying feedback from employees who received their January 2026 salaries shows a noticeable drop in PAYE deductions under the newly implemented tax laws.

“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,” he said.

He explained that the relief is most evident among workers whose income taxes are deducted at source by their employers, describing it as an early sign that the reforms are delivering on their promise.

The PAYE reduction is part of a broader tax overhaul driven by the Nigerian Tax Act and the Nigerian Tax Administration Act, recently rolled out by the federal government. The reforms aim to simplify the tax system, eliminate multiple taxation, and ensure a fairer distribution of tax obligations across income groups.

Oyedele reiterated that the changes will significantly ease the burden on workers, noting that about 98% of Nigerian employees are expected to either pay no PAYE tax or enjoy lower deductions under the new framework.

He added that small businesses are also major beneficiaries, with roughly 97% projected to be exempt from corporate income tax, value-added tax (VAT), and withholding tax. Large companies, he said, will equally benefit from reduced tax liabilities.

Addressing public concerns surrounding the reforms, Oyedele maintained that the new system is designed to ensure Nigerians pay less tax overall, while improving compliance, efficiency, and government revenue sustainability.