Senator Ireti Kingibe, who represents the Federal Capital Territory (FCT) in the Nigerian Senate, has raised concerns about the country’s tax laws, stating that many Nigerians do not know about a policy that could require them to pay 25 per cent of their earnings in tax.
In a post addressing voters, Kingibe reportedly said the National Assembly had already passed the law and that its implementation would begin after the next general election.
She said:
“Nigerians are not aware that a tax law has been passed, which requires everyone to pay 25% of their earnings as tax. The National Assembly has already passed this law, and it will swing into action after the election.”
Under the Nigeria Tax Act 2025, personal income tax is calculated using a progressive system, meaning the tax rate increases as taxable income rises. The rates range from 0% on the first ₦800,000 of annual taxable income to 25% on taxable income above ₦50 million a year. The 25% rate applies only to the portion of income within the highest tax bracket, not to a person’s entire earnings.
For example, someone earning ₦70,000 monthly makes ₦840,000 annually. If the full amount qualifies as taxable income, the ₦800,000 tax-free band means that only the remaining ₦40,000 falls above that threshold, before considering any other applicable deductions or reliefs.
However, Nigerians who earn below the personal income tax threshold may still pay other taxes, including Value Added Tax (VAT) on taxable goods and services they purchase. For instance, someone earning ₦50,000 monthly, or ₦600,000 annually, may not owe personal income tax but could still pay VAT when purchasing taxable goods or services.
This means that although some Nigerians may not owe personal income tax, they can still be affected by the country’s tax system through their everyday spending.
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