98% of Workers to Pay Less or Zero Tax Considering New Regime
The Lagos State Internal Revenue Service (LIRS), has said that under Nigeria’s new tax regime, only 1.6 per cent of Lagos taxpayers will face higher tax bills, while about 98 per cent of workers will either pay less or nothing at all.
The agency disclosed that a simulation of 1,494,491 anonymised Lagos tax records from the 2024 tax year, recalculated under the newly enacted tax laws further showed that 54.54 per cent of taxpayers will pay zero tax, while 43.9 per cent will pay less than they did under the old regime.
Special Adviser to the Executive Chairman of LIRS, Tokunbo Akande during a media chat at the agency’s headquarters in Ikeja, described the new tax framework as the country’s most fundamental fiscal reform since independence, stressing it was designed to promote business growth, improve purchasing power and strengthen financial discipline.
“The new tax law is pro-poor, small business and middle class, while remaining neutral at the top. For the first time, Nigeria has a tax framework designed to protect the most vulnerable individuals and enterprises while still supporting large businesses,” he said.
Akande noted that opposition to the reforms was coming largely from groups that stand to benefit from them, including organised labour, adding that a closer look at the provisions shows the law strongly favours workers.
He explained that while the law exempts those earning N800,000 or less annually, it also protects anyone earning the national minimum wage or below, ensuring they remain tax-free even if the minimum wage is increased.
He said concerns around capital gains tax reflect a shift towards fairness between productive investment and speculative income.
“Under the old framework, profits from selling shares or property were taxed at just 10 per cent, even when they matched the profits of factories and other productive businesses that faced much higher tax rates. Under the new law, capital gains are taxed at the same rate as personal or corporate income, depending on who earns them,” he resolved.
Akande urged companies to file their annual tax returns for the previous year ahead of the January 31 deadline, warning that last-minute rushes could overwhelm the electronic filing system.
