Special Adviser to the President on Economic Matters, Dr Tope Fasua, says Nigeria’s new tax regime is designed to significantly reduce tax burden on majority of Nigerians, particularly the youth and small business owners.
The Atlantic Bell reports that the new tax regime being introduced by the present administration led by President Bola Tinubu will take effect from January 1, 2026.
Fasua spoke during a panellists session on “Nigeria New Tax System: What every youth should know,” at the Youth National Discourse Abuja 2025, organised by the Eleniyancares Leadership Foundation in Abuja.
He said that the primary aim of the new system was to ensure that those who should not be paying taxes in the country were exempted.
“For most youths, the President does not want you to pay any tax. That is the aim of the new tax regime for our youths,’’Fasua said.
He highlighted specific tax reliefs under the new system for low-income earners and small businesses.
“The law says that anybody earning one million naira and below per annum should go tax-free.
“That is N800,000, being the allowance you’re given for zero taxes plus N200,000 allowance for your rent.
“So, that is one million and below. So, that means you’re earning about N83,000 or so naira per month for a whole year you’re not supposed to pay taxes.
“It’s only when you have earned more than one million that you now begin to pay a minimum amount of taxation,” he said.
He added that under the new law, entrepreneurial businesses and small business owners with an annual turnover of N50 million or below would also be exempted from all taxes, including the Value Added Tax (VAT).
Fasua said that the government was only interested to collect tax on profits and not turnover and businesses falling within that turnover bracket would not pay any tax whatsoever.
He explained that the government’s tax focus was being redirected toward high earners, particularly those in the informal sector with high turnover who have historically evaded adequate taxation.
“What we’ve tried to do on the upper end for people earning N50 million and above is to take their taxes to about 24 per cent,” from a previous rate of around 18 per cent,’’ he said.
Fausa said that beyond tax reforms, the broader goal of the new regime was to create a new Nigerian economy that leverages innovation, skips outdated developmental stages and focus on adding value.
He appealed to the youths to move away from business models focused solely on buying and selling, imported goods, encouraging them to embrace innovative entrepreneurship by adding value to products and services.
On the various economic reforms under President Tinubu, the special adviser said that the positive economic indicators were evident that the President’s recent, difficult reforms were working.
Fausa noted that the national growth rate was increasing by 4.23 per cent, with a projection to hit 5 per cent by the end of the year.
“Our inflation rate is dropping month by month. In the past six months now, it’s dropping. Now we’re on 18.02 per cent.
“We’re likely to get to 13 per cent by the end of this year. By 2026 we’ll get to what they call single-digit inflation,” he said.
Fausa said that a leader is actually distinguished from followers by his ability on calculated risk-taking and power of visioning.
He described Tinubu as a bold risk-taker, citing his decisions on petroleum subsidy and on the foreign exchange rate.
“He took the risk on petroleum subsidy to say subsidy is gone right from May 29, 2023. Nigeria is beginning to reap those gains now.
“Even the Naira is getting stronger. Our reserves have gone up to 43 billion dollars, going to 50 billion dollars. Our manufacturing exports have gone up 67 per cent year on year. We’re just seeing positives everywhere.
“In fact, it’s unbelievable that in two years, less than three years, we’re seeing the kind of results that we’re seeing,” he said.
Fasua encouraged young Nigerians to engage positively with the economy and avoid “doom-scrolling” for negative news.
“This is the best country to be in the world and the place where the youths can be most prosperous,” he said.
