The Director-General of the Budget Office of the Federation, Tanimu Yakubu, has rejected what he called “wrong notions and stage-managed arithmetic” surrounding Nigeria’s new tax laws, asserting that claims the reforms would burden the poor are based on selective accounting and misrepresentation.
In a detailed response to a widely circulated essay critical of the reforms, Yakubu argued that branding the policy as “Bola’s tax” deliberately ignored provisions designed to protect low-income earners. He said the critique relied on emotional framing rather than the actual structure of the tax schedule approved under the new regime.
At the heart of the debate, Yakubu said, is a “category error” in which pension and health insurance contributions were wrongly presented as taxes. He explained that pension payments are deferred wages credited to workers’ Retirement Savings Accounts, while health insurance premiums purchase defined coverage rather than being compulsory levies for general government spending.
“A deduction is not a tax, and a contribution you own is not a levy you lose,” Yakubu said, emphasizing that such deductions actually reduce taxable income and protect workers’ welfare rather than exploit it.
Highlighting a key provision, he noted the N800,000 annual tax-free threshold under the new personal income tax system, describing it as “the hinge on which liability turns.” Using the example of a worker earning N75,000 per month, Yakubu explained that the annual income of N900,000 places only N100,000 above the zero-rated band.
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At a 15% rate on that excess, the total tax would be ₦15,000 per year before deductions, and pension and health contributions could reduce the taxable portion further, potentially to zero.
Yakubu also criticised the use of global poverty lines in the critique, pointing out that the World Bank’s $4.20-a-day benchmark is a purchasing power parity (PPP) measure, “not a nominal wage threshold that could be converted directly into naira using market exchange rates,” warning that such conversions turned technical welfare metrics into political talking points.
Addressing the claim that “widening the tax base” would automatically tax the poor, Yakubu called it a false syllogism. He explained that expanding the tax base can target non-compliant high earners, close loopholes, capture affluent segments of the digital and informal economy, and strengthen employer withholding—without impacting subsistence incomes.
He further argued that allegations of corruption and mismanagement, while raising governance concerns, do not undermine the structure of the tax schedule. Instead, accountability should be strengthened through improved transparency, auditing, and enforcement.
“The outrage depends on omitting the very thresholds and concepts that make its conclusion collapse,” Yakubu said, insisting that the new tax structure explicitly protects low-income earners and that contrary claims are driven more by narrative framing than by arithmetic grounded in law.
