PAYE tax reform increases Nigerian workers’ take-home pay, simplifies deductions, and clarifies banking and compliance rules for 2026

Many Nigerian workers have reported improved take-home pay in January 2026 following a reduction in deductions under the Pay As You Earn (PAYE) tax system, officials have confirmed.

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Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, disclosed in a statement that feedback from employees across multiple sectors shows the new tax laws are beginning to ease the financial burden on workers.

“To ensure proper implementation, the committee is organising a session in collaboration with the Joint Revenue Board for senior officials involved in salary administration and tax compliance,” Oyedele said.

The session will target Human Resources directors, payroll managers, chief financial officers, tax managers, and other executives overseeing staff remuneration.

Oyedele also dismissed public concerns regarding alleged new charges on electronic transfers and bank deposits, clarifying that the reforms did not introduce any levy on funds held in personal accounts.

“The new laws did not create a tax on electronic transfers or money in your bank account. Many businesses can now also claim back input VAT on bank charges,” he added.

To guide financial institutions, a separate engagement session was held with officials from the Nigeria Revenue Service, the Joint Revenue Board, the Central Bank of Nigeria, and representatives from fintech companies, commercial and microfinance banks, pension funds, asset managers, and investment firms.

Discussions focused on preventing incorrect charges, ensuring Tax Identification Numbers are correctly used for business accounts, and explaining lawful filing and deduction procedures.

Other reforms covered included the removal of Tax Clearance Certificates as a requirement for foreign exchange transactions and strengthened protections for taxpayers via the Office of the Tax Ombud.

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Oyedele said the overall goal of the reforms is to increase participation in the formal economy, harmonise tax rules, improve access to financial services, and build public trust in Nigeria’s financial system.