AWC Statehouse Desk
The Presidency has issued a firm rejoinder to a widely circulated opinion piece titled “Bola’s Tax”, dismissing claims that Nigeria’s ongoing tax reforms unfairly target low-income earners as misleading, selective, and arithmetically flawed.
In a detailed response released on Thursday, January 8, 2026, Tanimu Yakubu, Director-General of the Budget Office of the Federation, argued that the essay by Emmanuel Orjih, though rhetorically persuasive, omits critical provisions of the tax law that fundamentally alter its conclusions.
Yakubu clarified that pension and health insurance contributions are not taxes, but legally recognised deductions that reduce taxable income. Pension contributions, he explained, are deferred wages owned by workers and paid into their Retirement Savings Accounts, while health insurance payments are premiums for defined coverage—not compulsory levies for government use.
He further stressed that the ₦800,000 annual tax-free threshold under the new tax regime is the “decisive hinge” ignored by critics. Using the example of a worker earning ₦75,000 monthly—₦900,000 annually—Yakubu demonstrated that only ₦100,000 falls above the zero-rated band. At a 15 per cent rate, this amounts to ₦15,000 annually, or ₦1,250 per month, before deductions.
When pension contributions are factored in, he noted, the taxable income drops significantly—often to near zero—undermining claims that low-income earners are being dragged into a punitive tax net.
The rejoinder also faulted the essay’s reliance on a World Bank poverty line of $4.20 per day, accusing it of misusing a Purchasing Power Parity (PPP) metric as a nominal naira salary benchmark. Yakubu said the conversion of the PPP-based figure into a monthly naira wage was technically unsound and politically misleading.
Addressing broader claims about “widening the tax base,” the Budget Office boss rejected the notion that it automatically means taxing the poor. Instead, he said the policy focus is on improving compliance among high earners, closing loopholes, integrating the informal-but-affluent economy, and strengthening tax administration.
Yakubu also dismissed the argument that allegations of corruption invalidate the tax structure itself, noting that accountability concerns, while legitimate, do not negate the arithmetic or intent of the tax schedule. He argued that sustainable taxation strengthens citizen oversight and reduces dependence on borrowing.
“The outrage being sold depends on omitting the zero-rated income band, mislabelling deductions as taxes, and misapplying poverty metrics,” Yakubu said, adding that the reforms are designed to protect low-income Nigerians while restoring fiscal sustainability.
He concluded that disagreement is legitimate in a democracy, but insisted that debate on tax reforms must be anchored on facts, full provisions of the law, and sound economic reasoning—not “stage-managed arithmetic.”
