I have found it apposite to reply to the efforts by one Emmanuel Orjih – who claims to be an ex-World Bank staff’s writeup titled ‘The Poor will pay ‘Bola’s Tax’’ – or something to that effect, where the EX-World Banker (who must have spent years pushing regressive tax policies around the world and somehow believes this reform is along the same line – tries to dissemble, rabble-rouse and confuse Nigerians about the intent and purpose of what is actually a fiscal reset, where the burden of financing society leans more on those who are comfortable rather than the poor and struggling.
Already, most Nigerians understand what Orjih has – rather typically – refused vehemently to comprehend as he goes about setting ad-hoc examinations for his intended victims, even as he tries to work to his preferred answers. The story as narrated by Orjih, and the example of his relative ‘Joseph who takes care of his village house in exchange for the sum of N75,000 monthly wreaks of deliberate obfuscation which reveals Orjih’s real intent.
Anyone with a little forensic knowledge will understand that Mr Orjih – who is expected to be conversant with very efficient tax regimes around the world – is only desirous of Nigeria being a perennially financially hamstrung nation, where citizens demand and rightly desire the best of infrastructure and standard of living, but where the resources to finance such do no exist because of the type of cynicism he displayed in his article. Nigeria also deserves good things like other nations we reference. Yes, there are inefficiencies – just as there are everywhere in the world. These inefficiencies in public finance management is being tackled and will be further wrestled down – with the help and scrutiny of Nigeria’s compliant taxpayers. There will not be perfection at any time, as that utopian construct does not exist. Therefore, Orjih, like some other unrepentant cynics, should not ask that everything be in place before Nigeria forges ahead. This situation brings to mind the biblical case of King Solomon, two widows and a child. Orjih’s recommendations, and attempts to scuttle a good policy rather than try and observe how it will work, represents that widow who preferred to split the baby in two.
Now, let me try and break down how the scenario will work even in the instance he has brought up, in the hope that Orjih and his believers will see – if their minds are still open. Note, that the peculiarity of his example of the now famous ‘Joseph’, is of a man who has no responsibilities and pays no rent. If Joseph paid any rent or had any responsibility, he will not pay a dime. Youth Corpers in Nigeria earn N77,000 from the Federal Government plus a little extra from their place of primary assignment. Most of them pay rent, and have to take care of themselves in many ways. They are not the focus of the recalibrated tax system. More so, the new tax regime has now kicked in, and any honest observer will see that nobody has been bearing any larger tax burden. By the end of January, most lower to middle level staff of organisations will actually see a reduction in their tax liabilities. It is important to address the intent of Orjih’s intervention and deal with it at length before diving into specifics. Now, here goes:
The Mr “Joseph” who earns ₦75,000 per month, lives rent-free, and contributes 8% of his income to a pension scheme will benefit from the tax relief targeted at low income earners under the new tax laws.
Contrary to the claim that Nigeria’s poor are “about to start paying taxes,” low-income earners like Joseph were already liable to tax under the old regime, largely due to the regressive tax structure and minimum tax provisions on vulnerable taxpayers. Indeed, there were instances where the old minimum wage earners (who earned just over N30,000), were taxed in some states. This has been abolished under the new framework. Under the previous framework, Joseph would have paid about ₦3,239 per month in personal income tax. Under the new law, his tax liability falls by 90% to ₦350 per month, reflecting a significant reduction in tax burden (because he pays no rent and lives almost free under his relative, Mr Orjih). For the majority of low-income earners who pay rent and make statutory contributions like National Housing Fund, the tax payable will be zero. I repeat, ZERO!
The assertion that the new tax laws “capture” the poor is therefore factually incorrect.
What has changed is not the inclusion of low-income earners in the tax net but providing tax reliefs to eliminate or significantly reduce their existing tax burden so that “they can breathe”.
Flawed Arithmetic and Misapplied Poverty Metrics
The arithmetic that Orjih has applied to argue that Joseph will now pay tax is misleading. Deliberately, because Orjih – who claims to be a former World Bank staff should know but chose to deploy his intelligence in the wrong direction. He relies on the misuse of World Bank poverty thresholds. While the $4.20/day line is often cited for cross-country comparisons among lower-middle-income countries, it is not Nigeria’s national poverty line.
The World Bank’s poverty threshold are measured in Purchasing Power Parity (PPP) terms so conversion using market exchange rates is fundamentally flawed. Using an inappropriate benchmark to redefine poverty and then building a tax argument on it is analytically unsound. This strategy can only be explained on the back of Orjih’s attempt to scuttle a good idea – if he could. Orjih should know better not to triangulate his sources as he tried to cram World Bank’s supposed infallibility down our throats.
Nigeria’s poverty measurement is based on the Nigeria Living Standards Survey (NLSS), conducted by the National Bureau of Statistics in collaboration with the World Bank. The World Bank itself has stated that Nigeria’s country-specific poverty threshold is more appropriate for national policy decisions. Orjih knows this, just that he prefers falsehood.
Minimum Wage Earners Are Explicitly Protected
The new tax laws explicitly exempt individuals earning the national minimum wage. The claim that Nigerians earning ₦67,000 per month will be taxed under the new regime is incorrect. The reforms also remove minimum tax provisions that previously applied even on minimal income. This change directly benefits low-income earners and small businesses.
“Widening the Tax Base” Does Not Mean Taxing the Poor
The assertion that widening the tax base means taxing the poor reflects a deliberate obfuscation of tax policy. It wreaks of voyeurism and schadenfreude. Some folks are only interested in keeping Nigeria backward rather than see us progress. Imagine stating that all the people who are well-to-do are already in the tax net and the only thing left for government to do is to tax the poor, or ‘ghosts’, or ‘livestock’. Orjih is indeed a distasteful writer desperate to manipulate unsuspecting audience. Every Nigerian is aware of the survey that showed that only 200 Nigerians pay more than N20 million in personal income tax, despite us having tens of thousands of big earners in that bracket. Whereas the survey is dated, but not much has changed. The same country where private jets number more than commercial jets, where some people spend equivalents of $10,000 in nightclubs in one night, where ‘money is water’. The government of the day is deliberate in its quest to make taxation a lot more progressive in this country. People like Orjih are only trying to rile the masses in a bid to obliterate the money trail.
For the avoidance of doubt, the tax base expansion under the reform is achieved through:
1. Reducing the compliance gap – fewer than 1,000 Nigerians paid ₦10 million or more in personal income tax as of the VAIDS programme in 2017/18, a pattern that has barely changed.
2. Rationalising distortionary incentives such as discretionary tax waivers, abuse of free trade zones, and opaque tax holidays.
3. Formalising top earning informal economic actors, particularly professionals and high value service providers.
4. Closing avoidance channels used by high-income individuals and firms.
5. Growth-driven expansion, where rising incomes, not higher rates, lead to higher tax receipts under a progressive system.
Under the reforms:
· 97% of small businesses are exempt from company income tax, development levy, charging of VAT and withholding tax.
· The corporate tax rate for large firms is set to fall from 30% to 25%.
· Businesses can now fully claim input VAT on assets and services, reducing production costs.
BROADER BENEFITS IGNORED
The author overlooks several material benefits of the reform:
· Removal of tax barriers to remote and digital work, improving access to global outsourcing opportunities for Nigerian youth.
· Repeal of the 5% excise duty on telecom services, which would otherwise raise communication costs for people like Joseph.
· Introduction of ₦100 million turnover threshold for small business tax exemption.
· Ongoing harmonisation of state taxes, reducing multiple taxation and harassment.
· Creation of the Office of Tax Ombud, providing protection for small businesses against extortion.
· Zero-rating of VAT on food, education, and healthcare, removing hidden VAT costs that previously raised prices of bread, school fees, and basic medicines.
· Statutory funding for NELFUND, which could directly support Joseph’s tertiary education through tuition assistance and stipends.
Rejecting the reform would therefore mean preserving a system that is disproportionately burdensome for low-income Nigerians. That is probably what the gentleman wishes to achieve by the attempt at mass deception, but he has failed woefully.
God bless Nigeria!🇳🇬🙏🏾🇳🇬
