Many Nigerian workers have reported only marginal increases in their take-home pay following the implementation of new Personal Income Tax reforms, raising questions about the immediate impact of the policy on household finances amid rising living costs.
The new tax laws introduced changes to the Personal Income Tax regime, including exemptions for individuals earning the national minimum wage or less, as well as employees with annual gross income of up to N1.2m. The reforms also reduced Pay-As-You-Earn tax for earners below N20m annually and exempted gifts from taxation.
Despite these provisions, feedback from workers across the public and private sectors suggests that the gains have been modest. Several employees said their salaries increased by only a few thousand naira, with reported increments ranging from about N6,000 to as low as N400.
A banker based in Lagos said his take-home pay rose by roughly N5,000, while a civil servant noted that it was difficult to assess the real impact due to allowances paid during the festive period. Workers in the financial services and media sectors also described the increases as minimal, with some saying the adjustment barely made a difference to their daily expenses.
Others acknowledged slight improvements but said the relief was insufficient to offset inflationary pressures. A contract worker in the banking sector earning between N200,000 and N250,000 monthly said the increase was small but helped marginally with rising living costs.
Reacting to public feedback, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said the committee had received confirmations from workers who noticed reduced PAYE deductions under the new tax framework. He added that an engagement session with payroll and finance executives had been scheduled to ensure proper understanding and implementation of the reforms.
However, some workers reported the opposite experience, claiming their tax deductions increased and their net pay declined. These concerns prompted explanations from tax experts, who said the graduated structure of the new tax regime means outcomes differ by income level.
A tax partner at PwC explained that individuals earning below N25m annually are more likely to benefit from reduced taxes, while those above that threshold may face higher tax liabilities, unless employers adjust payroll structures.
Economists have urged the government to closely monitor implementation, warning that additional charges and levies could erode the intended benefits of the reforms and weaken purchasing power. They also called for possible legislative adjustments to address emerging distortions as the policy rollout continues.
