The reforms, which came into effect as part of the government’s broader fiscal restructuring, introduced several changes to the PIT regime. Under the new framework, individuals earning the national minimum wage or less are now fully exempt from personal income tax. Employees with an annual gross income of up to N1.2m—translating to about N800,000 in taxable income—are also exempt. In addition, the reforms provide for reduced Pay-As-You-Earn (PAYE) tax rates for individuals earning up to N20m annually, while gifts are no longer subject to taxation.
While these measures were designed to improve disposable income and ease economic pressures, workers who spoke with The PUNCH on Monday said the increases reflected in their salaries were, in many cases, barely noticeable.
A banker, Adetunji Morgan, said his take-home pay increased by about N5,000 following the adjustments. “Yes, the salary increased. I think it increased by about N5,000 for me,” he said, describing the change as marginal.
For Lagos State civil servant Adedayo Lawal, assessing the actual impact of the PAYE reduction proved more complicated. He explained that a Yuletide allowance paid in December distorted the figures. “We were given a Yuletide allowance in December, but only 50 per cent of it was paid, with a promise that the second part would be paid this month,” he said. Without a detailed review of his payslip, he added, it was difficult to determine whether the tax reform had made a meaningful difference, noting that he was not expecting a significant increase.
Similar sentiments were echoed by workers in the private sector. Tolulope Ifeanyi, who works in financial services, described her increment as minimal. “Mine increased, oh, just a little, sha,” she said.
A media practitioner, Joshua Austin, offered a more pointed assessment, describing his increase as symbolic rather than impactful. “My salary increased, but it is not enough to buy me shawarma for one evening,” he said, noting that a wrap of his preferred shawarma costs N2,500. “As for an increase, yes, it increased, but what is the value of the increase?”
On social media, reactions were similarly mixed. A verified X (formerly Twitter) user, Gabriel Bolatito, acknowledged that while the PAYE reduction was small, it aligned with expectations and resulted in a slight net increase.
“I received my salary last week, and my take-home pay is slightly higher than before. It’s not a huge change, but it helps cover some of the rising costs of living,” said Uchechi Nwankamma, a contract staff member at Access Bank in Lagos earning between N200,000 and N250,000 monthly.
From a broader cross-section of public and private sector employees interviewed by The PUNCH, reported increases in take-home pay ranged from N6,000 and N5,000 to as low as N3,000, N1,443 and, in some cases, as little as N400.
Responding to the feedback, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said the committee had received confirmations from workers who noticed reductions in their PAYE deductions. In a post on his X handle on Monday, he wrote, “We are pleased to note the feedback from workers who have received their salaries for January 2026 and confirmed a reduction in their PAYE tax, resulting in higher take-home pay under the new tax laws.”
Oyedele added that the committee, working with the Joint Revenue Board, would host an engagement session with HR directors, payroll managers, chief financial officers, tax managers and other senior executives responsible for employee compensation and payroll tax compliance. The session, scheduled for Wednesday, is intended to ensure proper understanding and uniform implementation of the reforms.
However, responses in the comment section of Oyedele’s post suggested that not all workers experienced positive outcomes. Some netizens complained of higher deductions and reduced take-home pay. Rasha (@rasha2you) wrote, “Why is my take-home lesser? Stop acting like it’s everyone paying less tax I beg.” Another user, Odogwu Michael, said his tax increased despite earning barely enough to meet basic needs, while High Bee (@ibukun36180571) stated that there was no reduction in his tax and that his salary had declined.
Providing context to these concerns, Partner, Tax Reporting and Strategy at PwC, Kenneth Erikume, explained the implications of the graduated tax structure at the 2026 Nigeria Economic Outlook organised by FirstBank. He noted that income up to N800,000 is now tax-exempt, with rates applied progressively thereafter, and that income above N50m is taxed at 25 per cent.
According to Erikume, assuming no significant reliefs are claimed, individuals earning below N25m annually are likely to benefit from reduced taxes and higher take-home pay. Conversely, those earning above N25m would face higher tax obligations, resulting in reduced net income. He added that organisations would need to manage this disparity carefully from a human capital perspective.
“Staff earning below N25m will retain the benefit, and that cannot be clawed back. However, for staff earning above N25m, the question becomes whether the company will absorb part of the increased tax burden through a payroll review aligned with this change,” he said, stressing that payroll adjustments are an urgent issue that organisations must address immediately.
Developmental economist Dr Aliyu Ilias questioned the progressive nature of the reforms, arguing that early implementation trends suggest otherwise. He pointed to recent charges applied to USSD transactions and other bank services, which he said indicate that a 7.5 per cent levy is being imposed across multiple layers.
“This suggests that the policy may, in fact, negatively affect people,” Ilias told The PUNCH. “Individuals who adjusted their spending in anticipation of reduced costs are now facing higher charges, which could strain household finances and weaken purchasing power.”
Even as implementation continues, questions have persisted around the legal and procedural foundations of the new tax framework. Concerns were earlier raised by lawmakers over inconsistencies between the versions of the reforms passed by the National Assembly and those later gazetted, leading to official clarifications and the release of certified documents to address the gaps. Nonetheless, the Federal Government has continued with the rollout, arguing that the measures are critical to improving disposable income and streamlining tax administration.
Commenting on the situation, developmental economist Dr Aliyu Ilias described the developments as “an unfortunate reality,” noting that the National Assembly retains the authority to amend the framework to correct emerging distortions. He stressed that a closer examination of the current trajectory would reveal areas requiring further review, urging policymakers to pay close attention to implementation challenges. “Overall, however,” he added, “we believe we are doing good work.”