Many Nigerian workers say the much-publicised Personal Income Tax (PIT) reforms have brought little relief to their finances, with only slight increases in take-home pay that fail to match the rising cost of living. Interviews across the public and private sectors reveal widespread disappointment, as employees describe salary adjustments ranging from a few hundred naira to just a few thousand, leaving many questioning the real impact of the reforms.
The new tax laws exempt workers earning the national minimum wage or less from PIT and remove tax obligations for employees with annual gross income of up to ₦1.2m. They also reduce Pay-As-You-Earn (PAYE) tax for individuals earning up to ₦20m annually and exempt gifts from taxation. Despite these measures, workers say the practical effect on their payslips has been minimal. A banker, Adetunji Morgan, reported a salary increase of about ₦5,000, while a Lagos State civil servant, Adedayo Lawal, said the effect was difficult to isolate due to allowances and staggered payments.
Others were more blunt. Media practitioner Joshua Austin described his increase as “symbolic,” noting that it could not even cover a single evening meal. Employees in the financial services sector echoed similar sentiments, with reported increases as low as ₦400 to ₦6,000. For many, the adjustments barely offset inflation, transport costs, and rising food prices, reinforcing the sense that the reforms have fallen short of expectations.
Responding to the feedback, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said workers’ confirmations of reduced PAYE deductions showed the reforms were taking effect. He announced an engagement session with HR directors, payroll managers and tax professionals to ensure proper implementation. However, reactions on social media suggest uneven outcomes, with some workers reporting higher deductions and reduced take-home pay, contrary to the reform’s intent.
Tax experts say the mixed outcomes stem from the graduated structure of the new regime. PwC partner Kenneth Erikume explained that while individuals earning below ₦25m annually are likely to benefit from lower taxes, those earning above that threshold may face higher obligations, potentially reducing net income. Development economist Dr Aliyu Ilias warned that additional charges on banking and digital transactions could further erode household purchasing power, urging lawmakers to review emerging distortions and refine the framework as implementation continues.
source: punch