The Nigeria Tax Act, 2025, establishes progressive personal income tax rates, with the top rate applying only to chargeable income above ₦50 million annually.
By Wapcodehub9ja LIVE News Desk
A claim by Senator Ireti Kingibe that Nigeria’s new tax laws require every citizen to pay 25 per cent of their earnings has been contradicted by the provisions of the Nigeria Tax Act, 2025, which establishes a progressive personal income tax system rather than a flat rate for all taxpayers.
Kingibe, who represents the Federal Capital Territory in the Senate, made the claim while addressing supporters at a gathering in Abuja. She also alleged that the government had delayed implementation of the tax laws because of concerns about public reaction ahead of the 2027 general election.
However, the legislation provides for different personal income tax rates depending on an individual’s annual chargeable income. The 25 per cent rate applies only to the portion of chargeable income exceeding ₦50 million, not to every Nigerian’s entire earnings.
What the tax law provides
Under the Fourth Schedule of the Nigeria Tax Act, 2025, the first ₦800,000 of annual chargeable income is taxed at zero per cent. The next ₦2.2 million attracts 15 per cent, followed by 18 per cent on the next ₦9 million, 21 per cent on the next ₦13 million and 23 per cent on the next ₦25 million.
Only the portion exceeding ₦50 million attracts the highest rate of 25 per cent.
This progressive structure means that separate portions of an individual’s chargeable income are taxed at the rates applicable to those bands. It does not mean that someone whose income crosses the highest threshold automatically pays 25 per cent on every naira earned.
For example, a person with ₦1 million in annual chargeable income would pay no tax on the first ₦800,000, while the remaining ₦200,000 would attract 15 per cent tax. That produces a tax liability of ₦30,000, assuming the stated amount is chargeable income after applicable deductions and reliefs.
The law also contains provisions for exemptions and eligible deductions. Consequently, actual tax liabilities depend on individual circumstances and the statutory rules that apply.
Has implementation been postponed until after the election?
The claim that implementation has yet to begin is also inconsistent with the law’s commencement date. The Nigeria Tax Act, 2025, took effect on January 1, 2026, according to the Federal Government’s published transition guidelines.
The commencement date is therefore not conditional on the outcome of the 2027 general election.
Kingibe has maintained that the legislation contains the provision she described. Nevertheless, the tax-rate schedule does not support the interpretation that every Nigerian must pay 25 per cent of their earnings as personal income tax.
FACT-CHECK VERDICT
The claim that Nigeria’s tax laws impose a flat 25 per cent personal income tax on every citizen is false. The legislation sets out progressive rates, with 25 per cent applying only to the portion of annual chargeable income above ₦50 million.
The assertion that implementation has been postponed until after the 2027 election is also contradicted by the Act’s January 1, 2026 commencement date.
Understanding the distinction between a maximum marginal tax rate and a flat tax is essential to accurately explaining the financial obligations created by the legislation.
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